Is it time to regulate frequent flier programs?

by Christopher Elliott on June 4, 2013

Henryk/Shutterstock Henryk/Shutterstock

 


Peter Bauer is mad.

His wife, Susan, a loyal United Mileage Plus member, can’t seem to redeem her hard-earned points for what she’d been promised: “free” flights — or “free” anything, for that matter.

“She has about 142,000 miles, all of which are from actual air travel — not goodwill or credit card charge or other miles,” says Bauer, a management consultant from Portland, Ore. “She has looked into turning those miles into a plane ticket or tickets many times but it has never worked out because she always comes up against a blackout period or other lack of availability.”

Bauer could, of course, hire a pricey consultant to figure out a way to spend those miles. Or his wife could join one of those online frequent flier communities, which offer every shortcut in the book (some ethical, some not) for getting an award ticket.

But unraveling this problem isn’t as simple as that, and it begs a question no one has asked in a while: Is it time for the government to step in and say “enough”?

The case for regulation

Before you answer, let’s listen to the rest of Bauer’s dilemma.

Susan is willing to accept something other than a flight for her miles, and lately she’s received offers from United to cash in her miles for a hotel stay.

“Today she attempted to respond to the email offer to book a room at a Seattle hotel, but was blocked from doing so,” says Bauer. “She called United Mileage Plus and was told that she can not use her miles for any such offers unless she has a United Mileage Plus credit card.”

A credit card? Seriously?

“The situation is aggravating,” he adds. “She can’t use her miles except for future United air travel when and if seats are available. Or for third-rate magazines. Beyond that, nowhere in United’s email offer does it say that you have to have this credit card, or at least not that we could find.”

Bauer doesn’t want or need another credit card.

“On a certain level this appears to be a case of tying, which, as I’m sure you know, has been ruled illegal in many commerce cases,” he says.

Tying is an agreement by one party to sell a product on the condition that the buyer also purchases a different product. In this case, the ability to redeem miles is being “tied” to a “free” hotel night, according to Bauer.

I contacted United to find out the details of Bauer’s hotel offer. The airline did not respond.

Questions from Bauer about redeeming Susan’s miles for a hotel stay were referred back to United’s website. She contacted the airline but — you probably guessed it — it hasn’t offered a response beyond a form acknowledgment.

“I guess they’re trained to not get it,” he adds.

Now what?

Susan’s options are awful. She can either redeem her miles for magazines she doesn’t want or turn to one of the so-called mileage experts. Neither of these options will do her much good. Why read something you don’t even want? And why hire someone who has a vested interest not only in perpetuating this hopelessly complicated system, but may also be getting compensated behind the scenes for promoting one of these useless credit cards? (Read their blogs and click on the scammy affiliate links if you don’t believe me.)

If you’re saying to yourself, “This shouldn’t be legal,” then you’re in for a disappointment. While the federal government is leaning in the direction of regulating frequent flier miles, it is hesitant to commit. Perhaps it’s time to do so before it’s too late and the mileage bubble pops.

“All we want is to book one of the dozens of hotels in Seattle supposedly available under this program for one night in July, using the miles that Susan has legitimately earned, without having to sign up for a credit card she doesn’t want,” says Bauer.

That’s not an unreasonable request. Too bad we have to threaten airlines with government intervention in order to get what travelers believe they were promised.

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Update: Almost one month after I asked United to help me make sense of Bauer’s redemption problems, the airline responded.

The ability to redeem miles for hotel stays is limited to Premier members and MileagePlus Explorer cardholders. This is not a new requirement and eligibility is clearly listed in the FAQ section of the Hotel and Car website and in the terms and conditions page. In addition, all outbound emails are only targeted to members who meet the eligibility requirements.

Also, you are likely aware that the research firm IdeaWorksCompany earlier this month released the results of its latest annual study of frequent-flyer award availability for airlines around the world. As was the case last year, United was one of the global leaders in making seats available for award travel at the lowest, “saver,” levels. In fact, with 80 percent of IdeaWorks searches at united.com offering saver availability, United ranked best among the largest U.S. carriers, more than double other U.S. network carriers.

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  • LotusFlower

    Compared to other airlines I’ve found the united mileage program to be the easiest to redeem for award travel. Everything is clearly outlined as to what is available for the days you are looking for & on which airline.
    In fact just the other day I bought a one-way fare for my sister-in-law to visit us for only 12,500 miles – this was even a direct flight from TX to CA. (I got the one-way not because round trip fares did not exist but because had less than 20,000 miles in my account. A round trip for the lowest mileage award was available & this was all within 2 weeks of travel.)

    In the past I’ve used the UA miles to get trips to Hawaii or even trips to South America. I’m not sure how she is not able find ANY flights unless she is limiting herself to very specific travel times to very popular paid destinations. Or she only wants to redeem her miles for the very lowest mileage awards.

    So based on my own experience I don’t see a need for regulation. Airline miles in the end are kind of silly. I treat them as like “coupons” on future travel. Maybe I can get a free flight, maybe I use it towards an upgrade on a long-distance flight. Either way using it I’ve saved a few bucks but I don’t really expect much else.

  • mapsmith

    Regulation of the Frequent Flyer Miles programs would probably also bring them into view as taxable. So those 142,000 miles could be taxed at the rate determined by the regulatory agency.

  • DJ

    I’ve been all over the world with my airline miles. I just redeemed for 2 tickets to Cambodia. It just takes attention to detail, planning, and time, which most people aren’t willing to do, and then they complain it’s too hard. You know what they say: nothing valuable is ever easy. So either work at it, or stop complaining.

  • ACW

    In two weeks I am taking my family to Europe on six one way tickets using United FF miles at the lowest mileage rate. We obtained these tickets far in advance and got exactly the days, times, flights and destinations we wanted. But you need to plan far in advance (6-11 months).

    My wife travels to Hawaii 3-4 times a year on United FF miles tickets, again getting the dates times and flights she wants by planning far in advance.

  • http://www.sandiegohamptoninn.com/unique-san-diego-neighborhoods/ La Jolla Cove Attractions

    You know what they say: nothing valuable is ever easy. So either work at it, or stop complaining.

  • Mark

    I do not understand her problem? On United, 50,000 miles will get her a ticket anywhere domestically. Unless she is looking for 1st class..

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