When American Airlines ran a holiday promotion in conjunction with Mastercard on their joint venture SimplyMiles website, I went all-in. They offered sextuple miles on all offers, and the most lucrative was unlimited 40 miles per dollar donating to Conservation International – a charity Mastercard was raising money for.
That meant earning 240 miles per dollar, or buying miles at $0.0042 apiece. I did 7 million miles. That’s hardly ‘the most’ anyone went for. I know of several readers who did more than me. One reported earning 12 million miles with this promotion. I wonder if anyone went bigger than that?
Someone said in the comments to one of my posts that the 7 million miles I generated meant ‘a lifetime in business and first class’ but it really doesn’t. Current pricing for a business class roundtrip to the Maldives in Qatar Airways QSuites is 140,000 miles – 420,000 miles for a family of three. To be sure, we can do that 16 times. But award prices will rise, and we aren’t going to get that kind of value on all our redemptions.
I think back to Dave Phillips (‘The Pudding Guy‘) immortalized by Adam Sandler in Punch Drunk Love whose 1.2 million miles seemed like so many when I first got into miles and points, until I’d quickly amassed my first million across several programs. Now it just doesn’t seem like that many miles at all (indeed, I had more American AAdvantage miles than that before this promotion.)
So what does 7 million more American AAdvantage miles really mean? Here’s how I thought about what I wanted to get out of the promotion, and how I decided on the level to shoot for.
- I haven’t seen my family in Australia in two and a half years.
- These are tough awards to get, and historically I’d book trips based on premium cabin award availability and go through backflips to get the best deal possible
- But these 7 million miles mean the freedom to see my family on my own schedule
A saver business class award seat between the U.S. and Australia runs 80,000 miles. That can be tough to find on Qantas and even tougher to find on American Airlines.
But take a 195,000 mile ($819 with this promo) business class award on American which has much greater availability. That’s 390,000 miles roundtrip, or 1,170,000 miles roundtrip for a family of 3. Seven million miles lets me do this six times.
In all likelihood I won’t spend all the miles this way. I will still search for saver awards, and fly first class on the Qantas A380 whenever possible. I’ll use miles to fly places besides Australia.
But ‘half a dozen trips to visit family in Australia, whenever it makes sense for us to go (unconstrained by saver inventory)’ was my basic rubric.
This isn’t the most miles I’ve earned through a promotion. I generated more miles through the 2009 holiday shopping promotion, and miles were worth more then. But it’s my biggest score in over a decade. Part of me thinks going even bigger made sense but there were risks and hassles and I decided against giving myself actual sleepless nights until the promotion worked out. It’s only now that it has – in hindsight – that chasing even more miles is something I’d consider.
Reader Fernsie got the deal at 939am on the 14th. So, neither you nor anyone else denied any person the opportunity to participate. The offer ended at 10am that day and AA is honoring transactions prior to that. No whining.
Hi, I’m not following. Even at a six times multiplier you need to spend over $1. 1mm on your credit card to get seven million miles. That’s a huge amount of spending for most people.
I thought track it back would never happen again. I was wrong.
Agree with Reno joe.
I did 1.5m miles and of course now I wish I had done more. I’m very similar to you in my situation (family of five with all of my extended family in oz). I’ve snagged 3 seats in qf f before (week before Christmas 2019). 330k points = $1400. Amazing value. I will say average award of 65k (averaging over Europe, Asia etc) means 2-3 roundtrips for the family for my $5500.
I also have been thinking about paying 180k points. But prob won’t.
Some of the non save awards are still amazing at that price. Eg 95k ord hnl. Even 150k points for a flat bed hnl to ord is good value. But only if I had 10m miles. At 0.0042 there is a lot of room. Even 375k to aus biz isn’t the end of the world. But the opportunity cost is high.
Hoping to q suites to Africa.
My goal was a measly 1 million…. But didn’t have that offer on my account despite multiple different credit cards. Oh well
Lol. This is what you call a backdoor deval, Gary.
But yeah, you keep saying this doesn’t move the needle while people are already talking about the “value” of 100k domestic awards.
You spent $30K on these points. That should probably be a part of this story (yes, those funds are going to be used for travel you would have bought anyway) but that is not an ordinary stack of cash.
Jeff M – thanks for pointing out how much money was spent acquiring these points. That is indeed a very “relevant” point that a reputable journalist (but not a blogger) would have clearly stated.
Lol @Mick
Nope, points aren’t being devalued due to a spike in available miles from this. Just a dude giddy for 150k domestic awards.
Bwahahahahahahhaha
Most of us probably don’t have $29,000+ lying around to spend on an advance purchase of what would be years of future travel.
I donated $1k to a charity and got 240k miles.
I’m happy.
Just because you can doesn’t mean you should. The large amounts spent on this promo by a small group of folks determined to see who could get the most will have aftershocks of less offerings like this (as evidenced by the early end of the promo) to your regular guy who had been scraping to accumulate enough miles for 1 ticket in economy now having a devaluation and not getting to go.
Really disappointed in those who participated to an excessive degree.
Congrats! Please explain exactly where you found the offer, and how it worked.
It may come around again and I’d like to be prepared.
Thanks!
Agreed with other posters- the amount of cash up front is worth noting. $30k on airline points is a big spend, even with the big discount.
Those claiming that Gary shouldn’t have taken this deal should also remember the risk involved in the transaction. Both the upside, 7 million AA miles, and the downside, that the offer wouldn’t be honored. The United states is a free county, and he has the freedom to take a calculated risk in legal transaction. Nice win Gary.
I’m a bit grumpy because I never got the Conservation International offer. I made the decision to wait a couple of days and see if it came up, rather than using my available MasterCard credit on some of the other offers that were well worth doing, but not nearly as good as CI. But the promo ended and I lost out. So it was a big plus for some, a minus for those of us who will be competing for seats with the lucky ones and living with the inevitable devaluations.
@ BookGirl305 — There is NO devaluation, so why are you complaining exactly?
I understand not everyone has that kind of money to “buy miles”, but there are people who do donate that kind of money to charities every year. Has anyone asked Conservation International how they feel about the promotion? I missed this opportunity, and had never heard of Conservation International, but I’m guessing they were pretty happy with the Frequent Flyer community’s participation (donations) since they hit their target well ahead of schedule (thus pulling the promo early”). I donate money to my University and get better seats at football games. You donate money to Conservation International and get better seats on airplanes. What’s the difference?
The devaluation has already happened.
TATL on American metal usually over 300k one way for travel in June or September
Convinced by all of the eloquent and compelling arguments, I’m now trying to determine the measure by which participating in the offer makes a person evil. I’m not certain if crossing a certain number of points triggers “evil” status and staying one point below that number retains “goodness.”
Alternatively, I’m not certain if one point alone triggers “evil” status and each successive point purchased makes a person increasingly evil. I would ask the person duly authorized to determine these matters to assist me on this. Thanks in advance for your help.
@LoeFlyer – Conservation International did not pay for the miles. They got money. (Mastercard keeps an administrative piece.)
I agree that the cost of $30,000 shouldn’t be left out of the equation. If your benchmark is 18 (3 x 6) future business class r/t tickets to Australia then, in effect, you prepaid about $1,600 per roundtrip. That would be an excellent price if you were buying the tickets for use soon but it’s far from free, it’s more than the commodity price of transport, and you definitely have to factor in opportunity cost, devaluation (will you only get 5 trips in the end?), and the intangible loss of flexibility in availability.
Oink -Oink, 1 million would been have enough which would leave another 6 million for those not having $30,000 sitting around.
Post hilites why this promo ended so much earlier than advertised for “normal” donators
@devalutionstation. Just saying, these miles are so cheap I’d consider 150k for the right seat. But I probably won’t because there is still plenty of saver availability out there if you’re flexible. I’ve flown royal jordanian, etihad, Qantas, JAL etc on aa miles.
Incidentally how impactful is this on the total pool of miles? I’d imagine there are billions of miles generated per day from flying and spending. You think this is going to ruin all of the one world programs? Doubt it. Remember airlines can’t sell a ton of their os biz space to non business travelers. They need to burn this space and prob don’t mind doing it even at 0.0042 per point.
Interesting thought – In theory, the “donation” to Conservation International is tax deductible. Depending on marginal rates, that $30K donation really only costs $22.8 K to $20.4K (or less, if you’re really raking it in.) That makes the cost of the miles even less. But IRS rules require you receive nothing tangible in exchange for the donation. As I understand it, Conservation International isn’t providing anything tangible, but the donor is receiving something by donating.
If people claim this as a charitable donation, are they asking for trouble from the IRS? (And no, I didn’t partake.) I’d be asking my accountant or tax lawyer about claiming this one before I claimed it.
Congrats Gary!
@CM: It’s quite common that only part of a donation is tax deductible — a typical donation to public radio, for instance, where you get a coffee mug or cook book is like that. You can get a “tax substantiation letter” from the charity which breaks out the value received and the portion of the contribution that’s tax deductible.
In this case, it’s more complicated because the non-taxable portion is not contributed by the charity (or maybe some is and some isn’t) and they may not know how much you got, and miles are subject to valuation anyway. The safest thing to do is not take any deduction at all (since, inarguably, you got more value than you gave). The next safest would be to request the tax substantiation letter and follow what it says in there. The third is just to deduct it. The complexities of this transaction are such that that IRS is unlikely to concern themselves with the value received.
But also note that recent changes to the tax laws have made itemizing deductions less attractive. If you don’t itemize your deductions you can still deduct charitable contributions but only a tiny amount (I think $600 per couple?) so the deductibility issue is not of concern for most tax payers.
@LarryIn NYC – I appreciate all that, but if you’re able to afford a $30K charitable deduction, you’re probably itemizing and looking to take advantage of it. If you gave $1K, not something that’ll trigger the IRS, unless they start flagging donations to Conservation International, which wouldn’t be hard once they get wind of it. It won’t happen right away, but in a few years, maybe.
If you got this deal, you got a pretty good deal. Trying to make it an even better deal is something those who got it are going to have to decide for themselves. Just pointing out that there is some risk here, so be careful and consider the downside if you get called on it.
The tax man cometh. Because Gary can’t shut up about it.
In the blink of an eye AA can claim you abused the system and close your account.
If you claim a deduction to a charity when in fact you made money off the charity then the IRS might start thinking tax fraud.
Maybe Australia will keep it’s borders closed for the next 20 years and you can use your miles at 500k a pop for a saver award from AUS to DFW.
@Alphons – if Australia keeps its borders closed, I just give tickets to my family to come visit me (Australians are now permitted to leave the country)
Will you claim a $30K tax deduction for your charitable contribution?
@BookGirl305 :
Just what is “an excessive degree?”
Whatever you decide?
In business, “buying more” is good, not bad. Donating more is even better.
Perhaps you’d like to ask the charity to refund the money because your greedy perception of YOU not receiving good mileage offers in the future is more important that conservation.
You’ve made it clear you care only about yourself.
FOCUS.
Nice to have $30K burning a hole in your pocket! At least the charity got a nice cash donation…. in the name of AA who gets the tax write-off! So who really got the “great” deal?
@loungeabuser1 my comment has nothing to do with a charity or donations made to one. It has to do with enough people making donations/purchasing amounts in excess of what the normal and expected practices would be that the promo was pulled early because the sponsors of the promo didn’t expect that level of play. That’s not a good look on anybody involved from any side.
Gary, I am very happy for what you have achieved here, and I thank you for sharing this deal with all of us as well. This is a a tremendous score, and is a great moment in miles junkie history. Happy new year to you, and enjoy your travels! Not having to sweat finding low-level award space is real freedom!
@BookGirl305 The issue is what you view as excessive is different than other people. We were in for $500, but if I had done $1,000, my P2 would say that is excessive. People that have a need for large amounts of miles may not even consider $5K or even $30K excessive. Companies should really just put limits in the terms to avoid this exact issue (to stop what the company views as excessive). Chase does this with the $1,500 Freedom bonus limit per quarter. Amex just did this with the recent Marriott Paypal promo (I think at 5K). However, some of these large companies don’t want to pay people to run the rewards programs to stop issues like this coming up. This happened with IHG a few years ago with the classic 3×5 Mastercard Priceless promotion. Basically, it’s hard for companies to have it both ways (i.e. I don’t want to pay people to run the program, and at the same time, I want the program to behave exactly the way we thought it would when we drew it up on the whiteboard).
Some of the commensts talk abotu the risk and the downside. ZERO risk. If they reneged on the offer shown the buyer swould have demanded a refund/reversal or disouted the charges like any transaction would. Remember these are credit cards. Now there might have been some back and forth but the charges would have to be reversed and credited back. The only risk is the award charts keep changign and make his Aistralia trip cost 50-100% or more than what it does currently.
Hey, I have an idea. If you read about a deal and have reservations about it, or it’s not something you’re comfortable participating in, how about passing on it, moving on, and refrain from deciding how others should or shouldn’t act.
Here’s to a healthy 2022 for all, and thanks for allowing me to receive almost 1/4 million miles for my $1k donation. I’ve had a repeat of track it back on my Christmas wish list since forever. I must have been a good guy this year.
@BookGirl305:
AA through Simply Miles made an offer. Gary and other accepted that offer.
That’s all.
“Normal and expected” puts the result before the act of purchase. It requires individuals to say, “you know, maybe I’ll cause this offer to not be available for others, or worse yet, maybe if I and others take advantage of the offer in large amounts, this type of offer won’t be available again.”
You’re imputing to the purchaser a responsibility to have perfect knowledge of the present and future. The purchaser has no such responsibility nor should she.
Is everyone charged with the responsibilty of self-policing which offers are “too good” and then limiting their participation to some unknown amount?
Stuart says: The tax man cometh. Because Gary can’t shut up about it.
Not true. If you get the miles for the donation and deduct a large donation like this, it will get scrutiny and be disallowed. Why? Becuase they gave you something for it. The miles.
That charity must have raised a lot!
@Bill American Airlines didn’t make the donation. Individual AAdvantage members made donations through Mastercard’s portal (Mastercard is the one raising money for this charity). Mastercard keeps a portion of the donation for administrative costs and passes on the rest to the charity.
The individual making the gift needs to decide whether or not to deduct their gift. Ordinarily the market value of items received in exchange for a gift reduce the value of that gift. If you make a $500 donation and get concert tickets that sell for $100 as a premium, you’d only be able to deduct $400. Here I believe the value of the miles is greater than what you’ve donated. Not tax advice, I’m not a CPA. But I do not believe there’s a viable deduction.
Congrats on your (totally legit) miles heist, Gary! You and other folks who scored millions of miles made out like Oceans Eleven! I only put in $150 for 36K miles, which is hopefully good enough for a cheap economy ticket on AA (womp womp).
Used a few hundred thousand AA miles to score First Class A380 tickets on Qantas to/from Australia in late 2016 (booked almost a year earlier and shortly before AA’s huge devaluation). I don’t expect to ever be able to do that again, but the windfall you scored obviously makes that possible. Like Matt Damon says in the TV ad, fortune favors the brave. Live the dream!
For the past three weeks, it has been pointed out time and time and time and time and time and time again that this donation is NOT deductible. It is not deductible for two key reasons. First, for a donation to be deductible, the donor MUST have an acknowledgement letter from the recipient charity stating a) the amount of the donation AND b) the value received by the donor in exchange for the donation. IF YOU DO NOT HAVE AN ACKNOWLEDGEMENT LETTER FROM THIS CHARITY, YOU WILL BE UNLAWFULLY CLAIMING A DEDUCTION. Second, the value of the gift MUST be in excess of the value received by the donor in exchange for the donation. IF YOU HAVE SUCH A LETTER, THE LETTER WILL STATE THAT THE VALUE RECEIVED BY THE DONOR IS IN EXCESS OF THE DONATION. YOU WILL BE UNLAWFULLY CLAIMING A DEDUCTION BECAUSE IN THIS CASE THE VALUE YOU RECEIVED IS IN EXCESS OF YOUR DONATION. Everyone is on notice.
@Josh – lots of articles about this but this was not just on credit card spending alone. It was a 240 miles per dollar for a donation. So a $1K donation earned 240,000 miles. $10K earned 2,400,000, etc.
As far as I’m concerned, the donation just paid for itself in multiples. I just did a summer US to Japan booking. Cash cost in Economy was ~$3,500 RT each, but there was a 70K AA web special available for a family. My recommendation is to book now before the other AA millionaires do while there’s availability.
I don’t begrudge Gary for going big; I do take issue with him breaking the golden rule by calling the airline when the offer was still live.
This deal was only honored because of the public commitment AA made to Gary after the time Mastercard wanted to pull it. if AA had remained quiet only transactions through Saturday would have been honored.
Nice comment Rich. I agree with you.
They kept it live for like 3-4 days. Maybe the publicity is worth it. Same with the mistake fares. I reckon they know what they’re doing most of the time. They’re not losing $10k by mistakinglu selling an Air France f fare for $1k. That person wasn’t going to fly anyway lollll