Randy Petersen posed an interesting question on Milepoint two evenings ago,
Recently an offer provided through the US Airways Dividend Miles Mileage Mall featuring EasyCGI was found to have had some fulfillment problems and a recent statement from EasyCGI that “EasyCGI has never approved or gave permission to be a part of frequent flyer mile program.” seems to be leading to confusion as to if this offer was legitimate or not. If you have any experience with this offer, we’d love to hear from you. Looking for members whose miles have posted, members whose miles have not posted and more importantly, members who have actually been able to enroll in the services provided by EasyCGI so that officials of these organizations can track down exactly what happened.
Wow, frequent flyer miles don’t usually generate mystery and intrigue! Something going on here, and I admit I had no idea what it was.
I did a little bit of sleuthing and I followed the progression of the thread and it turns out that in June there was apparently one of the most lucrative mileage offers I’ve ever heard of and somehow I managed not to be aware of it at the time. Boy, did I miss the boat (and by extension, a huge apology to my readers for not catching it, because I wasn’t able to share this with you).
On the other hand, there’s a drama here and a lot of members out real money with no miles to show for it, so maybe I’m glad I didn’t participate in a promotion that ultimately has me asking,
- Who is responsible for the offers made on an airlines ‘mileage mall’ site? And
- Which miles program offers can we really trust?
But before I get there, there’s a really fascinating story to tell. At least this my understanding, based on what I’ve been able to piece together.
Back in mid-June, the US Airways mall had an offer from web hosting company EasyCGI for 4,757 miles per purchase. The offer had no restrictions on product specific purchases, length of service or quantity limits. It specifically said there were no restrictions.
Now, this didn’t seem like a mistake — there was a similar offer being made through the Hawaiian Airlines shopping mall for 7,269 miles per purchase with no restrictions.
But even though the Hawaiian mall was offering more miles, US Airways was the bigger deal — both because US Airways miles have more uses with more partners, and because US Airways was offering a 75% bonus on all mileage mall transactions made by Platinum and Chairmans Preferred members through the end of July. And US Airways sells ‘trial’ Platinum status. So it’s not hard to ‘buy up’ to Platinum to get the 75% bonus, and now the US Airways Mileage Mall offer with EasyCGI was 8,325 miles per transaction. (Do enough transactions and the $600 buy up Is worth it.)
The key here was that miles were being awarded per transaction. Members would sign up for an $11 monthly hosting account, and then could make additional transactions of $1.50 for monthly storage (or buy larger storage options for $4.50). And then they’d make additional $1.50 monthly storage transactions. Lots of them.
10 hosting accounts at $11 per month, and then 110 increments of monthly storage at $1.50 apiece would generate 1 million US Airways miles. Assume that you had to keep the hosting accounts open for 3 months, and your cost for the million miles would be ~ $825 (as a US Airways Platinum, or a little higher with Hawaiian, future million mile increments would be even less expensive since you already now have hosting accounts with EasyCGI and can just buy storage).
$825 per million miles just as one example of how this might have worked out. That’s less than 1/10th of a cent per mile. You can imagine that lots of people generated lots of transactions, expecting to earn lots of miles. And you can imagine why I’m disappointed I didn’t know about this!
Now, this isn’t like yesterday’s AAdvantage Mall offer of 83,000 miles for $5, that was clearly a mistake though of course we’ll all wait to see how this works out. This appears to have been intentional, showing up on more than one mileage site.
Instead, this is more like an even more lucrative version of the December 2009 Track-it-Back offer, where I directly managed accounts that earned in excess of 15 million miles — at a cost of under 7/10ths of a cent per mile. Also through the US Airways Dividend Miles shopping mall.
But this one didn’t work out as intended.
Apparently some members participating in this offer were informed that their EasyCGI accounts were all cancelled and purchases refunded. EasyCGI said that the quantity, pattern of purchase (lots of small web storage accounts) and short purchase activity window led EasyCGI to believe it was credit card fraud.
Well, that was one way to get out of paying the miles for the offer. But when it was demonstrated that no credit card fraud was involved, EasyCGI claims that they had never actually made any mileage mall offers and that it was all done by a ‘rogue affiliate’ (a marketer that they were paying per-signup for new accounts).
Some members had miles award through the miles mall, then those miles awards reversed, with both the Hawaiian and US Airways mall sites. The airlines though say they aren’t responsible, and point the finger at a third party administrator for their mileage malls. These online sites offering frequent flyer miles for purchases made using links on their site aren’t run by the airlines, instead they’re contracted out to third parties.
These companies, just like Fatwallet, ebates, and Big Crumbs, are paid a commission or fee for driving sales or signups. Lots of bloggers have the same kind of arrangements with merchants, e.g. get paid a commission on sales or for pushing credit card signups (as I’ve discussed in the past, I happen not to currently have such arrangements). These mileage malls drive business to their sites by kicking back part of the commission to the customer, in the form of miles (which they’re buying from the mileage program) and keeping a small portion for themselves.
Frequently in my experience miles don’t post, although with a few careful steps the odds can be improved. If you have a shopping toolbar installed, those usually divert the commissions, the mileage mall gets nothing and so you don’t either. If you click on a merchant first, or go through a different site after clicking through the mileage mall, you may not receive credit (as some other cookie may trump the mileage mall). Or if you aren’t accepting cookies. And frequently getting customer service follow-up can be a challenge, since they bank on very large volume transactions with low margins (since the margins are already being given back to the customer).
It turns out that both the US Airways and Hawaiian Airlines mileage mall sites are both managed by a company called FreeCause. Apparently FreeCause has been non-responsive to questions about why transactions advertised through the mileage malls they run haven’t generated the promised miles.
EasyCGI cancelled some transactions, and generally claims not to have made any offers in the first place. The airlines point the finger at their outsourced vendor. And that vendor doesn’t respond.
Here’s what’s interesting. The Mileage Mall is really a vendor buying miles from the airline, but it’s portrayed as though the offer is coming from the airline mileage program itself. It sure looks like the US Airways Dividend Miles Shopping Mall is being presented by US Airways, and they’re the ones who are going to give you miles for your transaction.
But it sure looks like they want you to believe that so that you’ll shop and earn miles which they can sell to their vendor, but they don’t want to take responsibility for the actions of their vendor running the site. And if EasyCGI isn’t paying the vendor the commission, they don’t want to buy the miles to give to you.
And who do you follow up with, with everyone pointing fingers at each other?
It’s a fascinating case, and I wish I had been along for the ride, I didn’t know about it at the time. So I can stand back and ask these questions, because I very much love the mileage malls, I’ve long benefited from them. But when things go awry, who takes responsibility? Or is the customer just left out to dry? And if that’s the case, does it make any sense at all to shop through these portals, or at least to take them up on offers except for purchases you’re going to make anyway?
Ultimately I think that US Airways and Hawaiian Airlines, which have been presenting their mileage malls as a part of their frequent flyer programs, need to step up to the plate and solve this for their customers. Their site made an offer – which doesn’t appear to have been a mistake – and they need to make it right. Whether they make their vendor (FreeCause) ante up, or the vendor makes the merchant (EasyCGI) ante up, or they do it themselves, matters not to the customers. That’s all behind the scenes stuff that’s between the parties to figure out. Otherwise all the customer knows is that they can’t trust the offers being made by mileage programs, in this case US Airways and Hawaiian Airlines.