Reaping rewards from unused loyalty programs
By Jennie L. Phipps • Bankrate.com
You've racked up 50,000 frequent-traveler points, but you're going nowhere because they are in 10 different programs.
Worldwide, members of frequent-traveler programs with airlines, hotels, car rental companies and credit card providers earn more than 650 billion miles and points per year, according to stats on FrequentFlier.com. About 75 percent of the accumulated travel rewards, notes the Web site, are never redeemed.
That's easy to believe because companies don't make it simple to cash out.
To claim a free flight, you need at least 25,000 miles. Free nights in hotels and free rental car days are less, but you accrue those points more slowly. The obvious answer for a frustrated traveler is to merge or exchange points with somebody else. But this kind of horse trading is a sticky subject with the airlines, hotels and other companies that bestow the points. And when it appears possible, easy even, there are rules against it.
But rules are made to be broken. Faced with that reality, the travel industry is bowing to the inevitable and cooperating, grudgingly, with people who want to stack their points until they have enough to earn a reward for their troubles, er, travels.
If you have lots of points and no reward, here are some ways to go about claiming one.
Find a partner
Airlines, hotels, rental cars, phone and credit card companies all buddy up with one another to offer member rewards. You may have accumulated more points than you think when you merge partner points. And partners at least can make it easy to earn more points with a minimum of effort and expense.
There's no central marriage bureau for travel partners, but FrequentFlier.com lists all the U.S., Canadian, Latin American, European and Asia-Pacific Airline frequent flier programs, as well as hotel, rental car and credit-card plans. These sites list their partners, and the more you study the partnerships, the clearer the possibilities for converting unwanted points to more useful ones.
For instance, American Airlines partners with Hilton Hotels and will allow you to convert a minimum of 5,000 air miles to 10,000 HiltonHonors points; that will get you within 2,000 points of a free night at the hotel chain. You can pick up the additional points by collecting 2,000 MyPoints, another Hilton partner. Earning MyPoints requires little more than reading emails and taking online surveys.
Go with a middleman
Check out Amtrak Guest Rewards. It's the most flexible plan around. The program allows you to move around miles among Midwest, Continental and United Airlines, which partners with USAir. You also can combine a host of frequent guest miles from hotel partners Hilton, Marriott, Ritz-Carlton and Starwood Hotels, which includes Sheratons and Westins, as well as rental car partner Hertz. There are some restrictions, but generally you can merge miles and points from these programs one-for-one to accumulate a nice little points pile.
If you still don't have enough to travel anywhere, you can trade lesser accumulations for gift certificates at a diverse array of retail partners, including Home Depot, Macy's, Bloomingdale's, Barnes & Noble, Sports Authority and Olive Garden. Joining Amtrak Guest Rewards is free and you'll get 500 initial miles for your trouble.
Diners Club Rewards, Starwood and Hilton reward programs also let you do some merging, but the exchange rates are not as good. Plus, joining Diners Club costs $95 per year. Still, it's worth taking a look because each of these plans have different partners; you may discover that you can use some orphaned miles or points that you were ready to write off.
The middleman of last resort is Points.com, which works with an array of frequent customer programs, as well as more than 3,000 retailers. You can merge miles or points or turn what you have into gift certificates. It's the only independent company offering this service, says Christine Vandaele, vice president of consumer marketing.
It's free to join, but there's a fee for each exchange unless you upgrade to the flat-fee version. The big drawback is that you lose a lot of value when you trade. For instance, 5,000 U.S. Airways miles can be exchanged for 500 American Airlines miles. Unless you are desperate for time and can't be bothered to look, there are better deals for this same exchange out there.
On the other hand, if you have only a few miles or points in any one program, Points.com will let you gather them up like spare change under the couch cushion and convert them to a small gift certificate. In a case like this, something may be better than nothing.
Creative non-travel rewards
Then there are people who have a lot of travel miles but don't really want to use them. Staying home is the luxury to which they aspire. If that's your dilemma, here are some suggestions.
Some companies provide unique opportunities for their good customers. For instance, Continental Airlines came up with a novel way to reward frequent fliers and unload its closets. The airline auctions promotional items -- an evening in a Yankees luxury suite, tickets to the Grammys, a walk-on role in a Chicago play -- for miles on its Internet site.
The items are perks the company got by sponsoring events and organizations. Continental used to give them to big-spending customers, but auctions get them into the hands of people who actually want them. The winner of the Grammy tickets (and a pre-show party) paid 310,000 miles to take his daughters, says Kevin McKenna, managing director of electronic marketing for Continental.
Make a charitable donation
MileDonor.com allows you to pick either an airline or a charity and then links you to the procedure for making a donation. Charities happy to take your excess miles include the American Heart Association, CARE, the Arthritis Foundation, Junior Achievement, UNICEF and the United Way. Gifts of miles are generally not tax deductible because, in the eyes of the Internal Revenue Service, they have no monetary value.
Give them to friends or family
Occasionally, airlines set a limited period of time in which they allow you to transfer miles to someone else's account. Airlines periodically allow point holders to transfer miles to accounts of other members who also are enrolled in the airlines' programs.
Continental, for instance, lets its OnePass members transfer (within a time period established by the company) any amount of miles to the account of another OnePass member. The transfer costs $5 for each 500 miles, but if you're trying to help a friend who needs to make a trip, this is a good way to top off your pal's account.
Finding out when these grace periods take place is the trickiest part. Official Airline Guide Frequent Flyer Magazine offers a free e-mail newsletter that does a good job of keeping up with loyalty programs. Enroll or, if you don't want to add to your e-mail box clutter, just read the issues online.
Sell your points
There is a brisk gray market in loyalty program points and miles. While selling them is illegal only in Utah, most loyalty programs don't allow it and do their best to put the kibosh on such transactions. When someone is caught selling points, the programs publicize it widely and confiscate the seller's membership and accumulated points.
The rules do, however, allow use of the points to buy tickets for traveling family members and that's how the transfers are accomplished.
The exchanges are pretty clandestine.
Amy Crippen, the wife of a Minneapolis businessman who travels widely, has sold her husband's accumulated miles on a couple of occasions. She contacts a Web-based broker with the number of miles available. The broker finds a customer and calls back with names and dates. Amy buys the tickets for the traveler -- a "family member, should the airline ask" -- and overnights them to the broker. The broker overnights the check to Crippen, including any expenses.
While this involves lying about the relationship of the traveler, Crippen doesn't feel guilty. "We earn these miles by buying these tickets," she says. "So why can't we do with them as we wish?"
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