No award seats? New site offers other options

Got frequent flyer miles? Having trouble cashing them in for a free seat? Wish there were other options for redeeming miles?

If you answered "Yes" to the above—and many would—there's a new website in town that aims to provide an alternative outlet for miles.

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At newly launched LoyaltyMatch.com, consumers with airline miles, or points in a long list of loyalty programs outside the travel arena, can sell or trade them, sidestepping the restrictions airlines place on award seats.

To be clear, what sellers are selling and buyers are buying are not miles. Except for very rare exceptions, the airlines expressly prohibit selling miles or award tickets. What can be sold, though, are non-travel awards that participants can obtain with their miles.

So, for example, elite members of both Delta's SkyMiles and United's Mileage Plus programs can redeem their miles for a range of merchandise awards, as can Mileage Plus Visa cardholders. And that merchandise—cameras, MP3 players, jewelry, home appliances, etc.—can be listed for sale on LoyaltyMatch.com.

Buyers then bid cash or other award merchandise for the listed items. And when both seller and buyer find the terms acceptable, the transaction proceeds.

The fee for trades, at $1.99, is eminently reasonable. And, to encourage trial, there's no fee for the first trade.

The related problems of devalued miles and, particularly, restricted award availability in particular aren't new. And LoyaltyMatch isn't the first company to recognize the potential business opportunity and develop a service that addresses the problem.

Points.com, for example, offers a suite of applications for loyalty program participants, allowing them to swap miles between accounts in participating programs and exchange miles with members in other programs.

Such services succeed or fail to the extent they deliver convenience and value. Points.com scores solid marks for convenience, but it fails miserably on the value scale. Swap 10,000 American miles for 948 Alaska miles? Thanks, but no thanks.

At this point in LoyaltyMatch's early days (the site is still in beta), any such report card would be provisional at best.

For all the many rewards programs that LoyaltyMatch.com supports, the airline programs have by far the most members. But except for magazines, most airline programs don't allow their members to redeem miles for merchandise, or restrict such redemption to elite members of their programs. That limits the utility of LoyaltyMatch to both buyers and sellers, undermining convenience.

That may be a temporary drawback. There's a very real possibility that the major carriers are moving in the direction of making merchandise awards readily available, which would add substantially to the range of LoyaltyMatch buying and selling opportunities.

As for the value consumers can derive from buying and selling through LoyaltyMatch, that will depend on how much buyers are willing to pay for the items on offer from sellers. As in any marketplace, sellers will ask for the stars and buyers will only bid the moon. The final price will be somewhere in between.

We'll check back in the months to come, when there are enough transactions to establish value baselines for sellers and buyers. For now, I'd recommend that mileage collectors add LoyaltyMatch.com to their watch lists. This could be the next big thing.

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