The cover story of this month’s Inside Flyer is called “The Ethics of a Mile” and deals with gifting, bartering and selling awards — and the consequences for violating a program’s rules.
In general, most airline and hotel programs will let you gift an award ticket or hotel night to anyone you wish (although some programs will limit you to giving travel to family members).
But going beyond that — sell your miles on Craiglist or through a broker — and you risk having your accounts closed, tickets cancelled, and even being banned from future participation by a travel provider.
Even giving a ticket to a charity for a fundraising auction violates some programs’ rules.
Last month I explained What triggers an airline or hotel program to suspect you, and how to respond if they do.
They’re your miles, though, right? Why won’t programs let you sell them?
Here’s what I told Inside Flyer:
Why are the programs so against their members selling the miles they’ve earned? We contacted frequent flyer expert and blogger Gary Leff from View from the Wing, asking, “Why do frequent flyer programs have rules against their members selling miles?” He responded: There are really three things that forbidding the sale of miles accomplishes for a frequent flyer program.
1) Frequent flyer programs balance their revenue and costs. If members sell their miles, that’s likely unused miles that get used, sooner, and for more expensive awards. That means higher costs. And it means the program is spending money on someone that they don’t have a loyalty relationship with.
2) If miles have a market value–rather than remaining the property of the program, a mere rebate for travel spending, and a reward for loyalty–then there’s a great risk of taxation.
3) And frequent flyer programs want to set the price of their miles themselves–to the general public and to partners. A secondary market for miles undercuts their pricing power and business relationships.
It’s ironic that frequent flyer programs began wanting to reward a loyalty relationship with a customer, and so frowned on commoditizing that relationship–but United and Delta are now moving in the other direction rewarding purely economic transactions through revenue-based programs.
Which still doesn’t answer the ethical question from the start of the piece. Should you be allowed to sell your miles?
My own take is no, because you agree not to as part of program membership. But if you take a dim view of adhesion contracts you may not find that view persuasive…