US Airways is back with a 100% bonus on shared miles, but two things are different this time.
- They’ve increased the price of transferring miles from one account to another to 1.5 cents a mile.
- The bonus doesn’t all go into the account receiving the transferred miles, half the bonus goes to the mileage recipient and half to the original accountholder this time.
The value proposition is different than before, so let’s talk about what it costs and whether it’s jumping on.
US Airways has long been a fascinating case, their Dividend Miles program sells miles consistently inexpensively through bonuses on purchased miles and also on share miles (where you transfer miles from your account to someone else’s at a cost, and they get more miles in their account than you took out of your own).
Back before 2010 business class awards to Europe were cheaper and miles were cheaper. “These deals aren’t as good as they used to be.”
But a 100% purchase miles bonus, which has been available to most members most of the year, means buying miles at 1.88 cents apiece. Not bad, not at a price I’d stock up my account speculatively (I need to be at ~ 1.5 cents a mile or less for that, though it depends on the currency of course and how many miles I already have — the value goes up as I get closer to having enough miles for the award I want, and goes down as my balance increases).
Share miles bonuses of 100% usually mean buying miles ~ 1.2 cents apiece. I think those are great and worthwhile. Sadly US Airways has raised the price of sharing mile bonuses to 1.5 cents a mile plus a $30 transaction fee and 7.5% tax.
About four years ago US Airways got new targeting and tracking software, and started playing games with these bonuses… like targeting, like variable bonuses, like tying bonuses to being a co-brand credit card holder.
None of those games this time, no need to log in or verify your account before seeing your bonus.
The 100% share miles bonus is back, which is fantastic. The trick this time is that the mileage recipient gets half the bonus, and the person transferring miles out of their account gets half the bonus.
That means it is a bit more complicated, much more likely to be useful in building miles in more than one account than it is for buying miles in one shot cheaply to book an award right away. Very clever.
Limited time offer!
From now until June 30, 2014, share your miles with a friend or family member and split the 100% bonus. That’s 50% for you and 50% for your recipient!
Key facts:
- The offer ends June 30 2014 at 11:59pm Pacific.
- Each account can receive up to 50,000 bonus miles, which would mean two maxed out transfers.
- Bonus miles are split evenly between the giver and recipient.
- As usual, Dividend Miles accounts less than 12 days old are not permitted to share miles or receive shared miles.
- “Miles are shared for $0.015 per mile plus a processing fee of $30 and a tax recovery charge of 7.5%.”
Here’s the math on transferring 50,000 points out of your account:
The cost to share 50,000 + 25,000 Bonus miles is $836.25 (including taxes/fees)
You pay $835.25.
- 50,000 miles go out of your account.
- 75,000 miles go to your recipient.
- 25,000 miles go back to your account.
The net increase in miles is 50,000 at a cost of $836.25 or 1.6725 cents per point. So an increase over the 1.2 cents that shared miles used to cost, and inconveniently for most half the net increase in points go into each account.
As a result I’m not a buyer at this price. But an interesting development. And suggests that the days of 1.2 cents a mile purchases through shared miles are gone at US Airways (which is not surprising since this is still about 25% less than that price at which American generally offers miles ‘on sale’).
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This is a strange promo indeed. Not sure how useful it is toward generating miles. What will US Airways think up next?
I’ve never done this, but it sounds like they’re forcing you to buy twice as many miles (at a higher price!) to top off a given account. Very shady indeed! Thanks for the clear explanation.
To me, the net of it is primarily the price increase.
About the ‘twist’: if two people do a transfer to each other, the net is the same as before. Each account ends up with 50K more than before, just at the higher cost.
So I thought maybe the twist was to avoid people creating accounts solely for this promotion and liquidating them right away, because it’s become harder to get to 90/100K [pick your sweet spot on the chart] in a new account than before. I am sure that could be gamed too, but its just harder than before.
This is a useless promo.
I broke the code on US share in 2009 and generated MMs of miles at 1cpm.
We also did TIB in 2009 Dec and generated MMs of them at 0.4c each.
That gave some protection against devaluation later.
This is at 1.6725c each.
I have a Fidelity cash back card that gives 2c cash back.
I have an spg card that gives spg points back
so 1 spg = 2c =1.25 us miles = 1.6c each
I would never buy speculatively from US at this price, unless to top off an account at once for a fee.
I can use 2c at any time.
To use these US miles, I need award space and a new 5 tier AA award structure that will not give me elite miles either.
Thanks, but, No Thanks.
The reason to buy direct from an airline was to raise cash for the airline and to buy at a low enough price (to protect against devaluation) by the purchaser. This is just an airline being greedy and thinking flyers are all stupid.