United sells miles paired with the purchase of tickets online at its website. You can buy redeemable miles based on the number of miles flown on the itinerary. On top of that you can also buy elite qualifying miles, too.
Some people do this during the year in order to qualify for elite status more quickly.
Others may do it right at the end of the year when they realize how many miles short they are going to be for status.
In fact, some use this feature just to straight up buy the qualifying miles, without actually flying the itinerary that those miles are sold with. That’s because when you buy the miles, they post right away and are not refundable. But remember that any United itinerary purchased on the airline’s website can be refunded for 24 hours, whether it is a refundable ticket or not. So you can buy the qualifying miles, and then refund the ticket.
United knows this of course, and they know come the end of the year that their customers get pretty desperate to requalify. And miles purchased at the margin that actually push a member over the top for their status are worth more than miles purchased on average, that may or may not be the difference in reaulifying. So they jack up the price substantially at the end of the year — more than doubling, even.
I read through this really useful Milepoint discussion this morning about the way United varies the price of qualifying miles.
Although first, note that this technique will be of a bit less use for many people in 2014 than it was in 2013 and 2012. That’s because starting in 2014 (in order to qualify for status in 2015), there’s a minimum revenue requirement in addition to flown miles to earn status for US residents: $2500 for Silver, $5000 for Gold, $7500 for Platinum, and $10,000 for 1K.
That means buying elite qualifying miles is going to be useful to:
- People who buy expensive tickets, but don’t fly a ton of miles. They’ll meet the revenue requirement but may need more miles for status.
- People who live outside the U.S. because the requirement only applies to people whose accounts have US addresses (and that aren’t military or diplomatic APO/DPO/FPO adddresses).
- People who spend $25,000 a year on a United co-branded credit card or have a Presidential Plus card and are trying to reach Platinum status or lower (that spending exempts members from the revenue requirement for all but 1K status).
(There’s also a requirement to have at least four paid flights on United, United Express, or Copa in order to earn United status, with holders of the Presidential Plus and MileagePlus Club Card exempt from that requirement.)
We know that purchases of Economy Plus count towards the revenue requirement. That generates a ticket numnber. Interestingly, buying miles generates a ticket number as well. So we do not know yet but I am speculating that these purchases might count towards the revenue requirement as well, for purely IT reasons.
Observations are that, roughly speaking, United seems to be selling the redeemable miles at ~ 2.3 – 3.3 cents per mile and then 12 cents per mile for the qualifying miles. The price of redeemable miles seems to vary with trip distance — long international itineraries having the lowest per-mile cost, and short domestic ones being the most expensive.
At the beginning of last year we were seeing qualifying miles for 8.5 cents apiece.
But when you hit the very end of December they’ve been as expensive in past years as 27 cents per mile all-in!
My bet is that there’s not a reason to jump on this now, I’m guessing the price shouldn’t go up above 12 cents for the next 9 months and might even drop a bit further.