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Are 'travel agent' discounts real or a scam?

AskEd & AnswerEd
by , SmarterTravel Staff
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Editor's Note: This story was originally published on April 20, 2006. To see the most recent SmarterTravel articles on related topics, please click on any of the following links: AskEd & AnswerEd, Ed Perkins.

Someone always seems to be promising you "insider" deals of one sort or another, and you have to question whether they're really good deals or borderline scams. A reader recently asked, for example, "I've come across an invitation to join a program that promises to give me access to prices that are only available to travel agents, for a monthly payment of $29.95. Is this for real or is it simply a scam for ignorant customers?" My overall answer is that it's probably barely legitimate—enough to pass muster with the law—but it's also likely a borderline scam.

Card mill basics

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The industry affectionately describes this type of operation as a "card mill." A travel agency appoints you as an "outside salesperson" and issues you an appropriate ID card. Typically, the agency is fully accredited, with all the usual memberships and affiliations of any large retail agency. It's a "mill" because it signs up—and issues business cards to—as many outside agents as it can sell on the idea.

A few years back, card mill affiliations sometimes sold for thousands of dollars. Quite a few mills charged $495, just $5 under the figure that would invite greater legal scrutiny. Lately, I haven't seen much activity, but at least some mills are obviously still doing business.

The promises

Card mills promise you two basic benefits:

  • As an outside salesperson, you can sell air tickets, cruises, tours, and such to friends, neighbors, and anyone else you can con into buying. You split the sales commission with the issuing agency. By selling travel, claim the promotions, you can easily earn "thousands" of dollars every year. All the card mill brochures I've seen include testimonials—whether real or fabricated, I don't know—from folks who purportedly got rich selling travel as outside agents.
  • Your ID as a travel agent entitles you to huge industry discounts when you want to travel yourself. Although the brochures may harp on the money you can make, the discounts form the card mill's core appeal.

Of course, the card mill folks can afford good lawyers. If you search the fine print, you'll find enough weasel words, exceptions, and disclaimers to keep the promises within the letter of the law.

The reality

Have you heard lately of any full-time, professional travel agents who are getting rich? I sure haven't. Airlines have cut out most commissions entirely, and other suppliers have cut back on them. Your more obvious potential customers are probably finding their own deals online and don't need an agent, outside or otherwise. And anyone who really needs an agent is looking for (1) real expertise in ticketing and booking tricks, (2) in-depth knowledge of destination areas, cruise ships, and such, and (3) 24/7 phone availability in case any problems arise. Filling that bill certainly doesn't appear to offer an easy road to riches.

And as to that "travel like a travel agent" promise, it, too, is—at best—grossly exaggerated. The people who run cruise lines, hotels, tour companies, and airlines aren't stupid (well, maybe the big airlines' managers aren't Mensa candidates); they all recognized the card mill problem years ago and took steps to counter it. Sure, travel agent discounts are still available. But most suppliers have tightened up their eligibility requirements for industry discounts so that they're limited to people who actually sell tens of thousands of dollars worth of travel every year. Even real full-time professional travel agents can no longer "travel like a travel agent" unless they sell travel like a travel agent.

Some suppliers—especially hotels—may still honor a card-mill ID for a 50-percent discount. But, in my experience, those hotels are offering big discounts to just about everyone else, too.

No free lunch

Despite the fact that "there's no such thing as a free lunch" has been one of the most thoroughly validated economics rules of all time, suppliers can still con some travelers into thinking they can get something for nothing—or virtually nothing. Sure, you can theoretically make some money by selling travel, and you can probably find some suppliers willing to give you an industry discount even though you don't sell anything. But as a practical matter, I suspect that most people who buy into the card mill proposition are lucky to find enough good deals to cover the cost of admission to the program.

 
 
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