Can I Sell My Frequent Flyer Miles?

AskEd & AnswerEd
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Editor's Note: This story was originally published on July 21, 2008. To see the most recent SmarterTravel articles on related topics, please click on any of the following links: AskEd & AnswerEd, Ed Perkins, frequent flyer.

Given the increasing difficulty of finding award seats, it's not surprising that lots of you would like to kick the frequent flyer habit. Especially if you acquire most of your miles through your credit card or other non-airline source, it's tempting to get what you can from your accumulated miles and move on to some program that offers more useful awards or cash. One reader recently asked:

"I only have 17,375 flyer miles and am looking to sell them. How much are they worth and where can I sell them?"

The short answer for this reader is, "Those miles aren't worth much; selling them is against airline rules, and you don't have enough to interest the resale market." Some airlines do allow you to transfer limited amounts of miles from your account to someone else's account. But you generally have to pay a fee of at least 1 cent per mile plus an additional transaction fee, and in small quantities, each mile is generally not worth more than 1 cent.

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But some of you have far more miles built up than this reader—enough that you might want to consider your alternatives.

Sell through a broker

Why buy and sell miles? You sell because you have more miles than you can use or you want some extra cash. You buy because buying miles often costs less than paying for the ticket you could get with miles. And whenever you have willing buyers and sellers, you find someone trying to make a buck off bringing buyer and seller together. With frequent flyer miles, those folks are mileage brokers.

The first rule of the exchange system is that brokers don't deal in miles; they deal in awards. You can't sell your credit as miles. And you can't deal in any fewer miles than you'd need for at least the minimum-level award.

Let's say you are sitting on a pile of miles and you want to unload some of them. Here's how the system works:
1. You contact a broker, tell the broker how many miles you want to sell, on which airline(s), and agree on price(s).
2. You then wait until the broker lands a customer who wants a specific award you can provide.
3. The broker notifies you of the customer's name and the specific award the customer wants; you request that award from your airline in the customer's name.
4. After the transaction is completed, the broker pays for your miles. As far as I can tell, brokers pay a range of 0.8 cents to 1.6 cents a mile—miles on some airlines are worth more than miles on others, and the larger your block of miles, the higher the per-mile price you get.

As a customer, it works in reverse. You notify a broker of the award you want and agree on a price. The broker then notifies a seller with the necessary miles and starts the process, as above. You generally pay something like $2,000 to $4,000 for a business-class round-trip from the U.S. to Europe or Asia, which means you're paying at least 2 cents a mile and probably closer to 3 cents.

Sell on your own

Rather than go through brokers, some hopeful mileage sellers try to find buyers and deal with them directly. Right now, I didn't find anyone trying to buy or sell miles on eBay or craigslist, but I've seen such offers in the past. And, of course, you can always ask around in your work or social circles.

Against the rules

Most large airlines allow frequent flyers to transfer awards, but program rules generally limit transfers to family or friends. As an award donor, the airline might require that you show up at an airport counter with the recipient to make the transfer.

Buying and selling awards—through brokers or directly—is against the program rules of all the major airlines. And, one way or another, the big lines have used the courts and fraud laws to shut down what was once a thriving mileage broker marketplace.

Airlines have also taken action against travelers they think have violated those rules. At the least, airlines have confiscated improperly issued award tickets; at worst, they've cancelled the travelers' frequent flyer accounts and all their accumulated miles. I have no idea how frequently this has actually happened; only that airlines routinely threaten it and carry through at least occasionally.

Brokers still operate

Despite airline opposition, a few agencies still advertise that they buy and sell awards. Among them:

It's not clear to me how these agencies manage to keep going in the face of vigorous airline opposition, but they seem to manage.

Premium seats only, please

Virtually all of the mileage broker business concentrates on business- and first-class travel—especially for international business and first class. That's because each mile is generally worth a lot more when used for premium-class travel than when used for economy class. A few brokers say they sell domestic coach awards, but most don't deal in rear-cabin seats at all.

One important upshot is that credit blocks of fewer than 50,000 miles are generally not salable, at least through brokers. And brokers prefer to deal with sellers who have much larger amounts of credit they want to sell.

Low-mileage options

If you want to unload a small handful of miles, such as the reader who asked the initial question, your options are limited.

  • Presumably you could find someone who would pay you something in addition to the fee for transferring your few miles.
  • On some lines, 17,000 miles is enough credit for a one-way upgrade, for which you might find a taker.
  • You can convert some airline miles into points in hotel programs—which may or may not help in any individual case.
  • A few online "point exchange" programs claim to exchange miles for credit in other loyalty programs, some of which you can convert into cash. However, when I've checked, I have found that you generally lose at least 75 percent of the mileage value in these exchanges.

Most travelers with small mileage balances would probably be better off using those miles for some minor offer the airline is promoting—many, for example, offer low-mileage magazine subscriptions.

Should you sell—or buy?

Certainly, SmarterTravel.com does not recommend buying or selling awards. Nor do I; in fact, in general I'd recommend against it:

  • You can't discount the risks.
  • Frequent flyer seats—especially in premium classes—are so hard to find that a purchased award is worth much less than it once was. It could even wind up worthless.
  • You can generally find other ways to get comparable discounts that don't violate airline rules.
 
 
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