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On Frequent Flyer Miles
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Editor's Note: This story was originally published on May 10, 2001. To see the most recent SmarterTravel articles on related topics, please click on any of the following links: airfare, frequent flyer, On Frequent Flyer Miles, Payless, Tim Winship.

When Points.com (http://points.com) launched on April 2, it purported to address a longstanding and deeply felt need of mileage aficionados: the ability to readily transfer miles among different accounts. While Points.com is a step in the right direction, most frequent travelers are likely to feel that fulfilling their dream of exchanging miles will have to wait.

Consolidation: Better Late than Never

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While it is generally accepted that the sensible approach is to consolidate mileage-earning into a single account (to maximize awards, reach elite status, and simplify record keeping), that's often impossible advice to follow. The result is a dispersion of miles and points across multiple unrelated accounts, with diminished chances of reaching meaningful award levels and attaining elite status.

That all-too-common conundrum always begs the question: How can I convert those miscellaneous orphan miles into a single currency—preferably that of my primary program,—and still achieve the benefits of consolidation?

In the past, knowledgeable mileage-accumulators used the Reward Exchange feature of Hilton's HHonors program to convert miles from one program into miles from another. And more recently, Diners Club Rewards added miles-to-points to its venerable points-to-miles conversion feature, giving would-be exchangers yet another option.

But a simple, straightforward mileage exchange (like a currency exchange) was just a gleam in the eye of mileage junkies.

Enter Points.com

What a traditional currency exchange is to dollars, deutsche marks, and yen, Points.com endeavors to be for miles and points from loyalty programs (online and offline, travel-related, and not).

The centerpiece of Points.com's service is pointsxchange, which allows members to exchange miles and points among a variety of programs (see table below), including those of five airlines. Here's how it works:

  • Establish a Points.com account by entering the required member information (name, e-mail address, etc.) on the Points.com website.
  • Enter program information into the pointsfolio section. Users will be asked to provide their membership number and PIN, and to give Points.com limited power of attorney to access account information and buy and sell their miles. (This is similar to setting up an account with any of a number of online "account aggregation" services, which consolidate data from multiple accounts (frequent traveler, brokerage, checking, etc.) and deliver a single comprehensive statement.)
  • Lastly, members enter the names of the programs to exchange between and the number of miles or points to convert. The Points.com calculator then determines the number of miles the conversion will yield. According to points.com, exchanges take between 24 and 72 hours to complete.

As you would expect, there's a price to be paid for this convenience—conversion loss. In effect, you pay a commission for the transfer, resulting in a conversion rate of less than 1:1. Taking an exchange between American miles and Midwest Express miles as an example, 10,000 American miles convert to only 1,046 Midwest express miles; and, reversing direction, 10,000 Midwest Express miles convert to only 1,465 American miles. And, over and above the cost of the conversion loss, you'll pay either $5.95 per transaction, or $14.95 for a year's worth of unlimited transactions.

Alternative Conversion Options

Points.com may be the only dedicated mileage exchange, but it is not the only way to exchange miles. The first was Hilton's HHonors Reward Exchange. Diners Club Rewards followed this, more recently. Both are two-step processes: first, convert miles into points (HHonors points or Club Rewards); then, convert the points into a different type of miles.

Exchange Costs

As with the Points.com exchange, users of HHonors and Diners will pay a price for the exchange in the form of conversion loss. The following table shows the beginning and ending miles when 10,000 American AAdvantage miles are exchanged for Midwest Express miles, and vice versa, using each of the three conversion programs:

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