Thanks! You're all signed up.

X

With Frequent Flyer Programs, Keep up or Lose Out

SmarterTravel

When airlines add routes or redesign their first-class seats, their corporate P.R. machines shift into overdrive, churning out fact sheets, backgrounders, and news releases to squeeze every last bit of exposure from the news.

But when the news is neutral, it’s stop the presses. And when the news is incontrovertibly bad, the airlines’ cheerleaders are nowhere to be found.

Sure, a token notice is published to meet legal disclosure guidelines. But then the communications tap is squeezed shut and consumers who missed the initial communique are left to ferret out the information on their own, and make sense of it as best they can.

This an especially acute problem for members of the airline and hotels’ loyalty programs, because the schemes are in a continuous state of flux. And the changes, which tend overwhelmingly to be negative, can have a real impact on consumers’ financial wellbeing.

Where Are My Miles?

Among the most visible of such changes—and the most irksome if it takes you by surprise—is the change to mileage expiration schedules.

In 2007, most of the major carriers cut back the lifespan of miles in their programs from an industry-standard three years to either 18 months or two years.

We’ve now come to the end of that shortened period, and inactive program participants who failed to heed the airlines’ policy change notices are discovering their account balances reduced to zero.

The losses can be considerable. I have heard from several program members who were shocked to find that they’d lost as many as 300,000 miles due to the new expiration policies. Assuming those miles were redeemed for domestic tickets with an average market value of $400, the expired miles would be worth $4,800.

The airlines claim they met their obligations in getting the word out regarding the new rules. Technically, perhaps they did. But the substantial number of frequent flyers who lost substantial numbers of miles suggests that the communications effort was less than a success.

Snooze-You-Lose Promotions

The most generous frequent flyer promotion of the past few years was also the most elusive.

In November 2009, British Airways offered an unprecedented 100,000 bonus miles for signing up for their program-affiliated credit card and charging $2,000 during the first three months.

Within a month, the promotion was discontinued, replaced by an offer of pedestrian proportions. Then it was on again in January, only to be terminated yet again within weeks.

It turned out, according to British Airways’ version of events, that the offer had been intended only for a select sub-group of its Executive Club members—a significant restriction that the airline failed to note in any of its marketing materials.

No More Miles on Aisle 2

With an extensive portfolio of brands (Vons, Dominicks, Pavilions, Randalls, Tom Thumb, and Genuardi’s) and more than 1,500 individual stores in every nook and cranny of the country, Safeway is a behemoth among the nation’s grocery giants.

And the company embraced loyalty marketing, awarding frequent flyer miles for purchases in one or more of its store brands in the programs of a number of airline programs, including Alaska Airlines, American, Continental, and United.

But at the end of the day on February 28, Safeway is putting the kibosh on mileage-based marketing in favor of a “low everyday prices” pitch to customers.

Who’s Your Mileage Buddy?

All but the smallest travel rewards programs have grown into extensive networks of companies awarding miles and providing rewards to program members. But the partner rosters are ever-changing.

Late last year, Continental quit the SkyTeam airline alliance, anchored by Delta, and joined the competing Star Alliance, alongside United.

Long-time marketing partners Delta and Singapore will be parting ways on May 15, after which members of the two airlines’ programs will no longer be able to earn or redeem miles in each other’s programs.

On a more modest scale, Southwest will no longer allow members of the American Express Membership Rewards program to exchange their points for credits in its Rapid Rewards program, effective from July 1.

The breakup is especially perplexing against the backdrop of Southwest’s recent moves into the business travel market. American Express is a major player in that arena, and continuing the tie-up, not ending it, would seem to be the logical move.

Not only do you need a scorecard to keep track of who’s with whom, you have to continually check to verify that it’s an up-to-date scorecard.

That Free Trip Costs How Much?

The gradual ratcheting up of award prices is a fact of life for frequent travelers.

But charging more for awards now, in the midst of a global economic meltdown? The timing is off, if not downright perverse.

Nevertheless, Hilton on January 15 rejiggered its award chart, adding a new tier and recategorizing many hotels as higher-priced awards. The bottom-line effect: The average number of points required for a free room night will rise significantly, resulting in a 20 percent devaluation of Hilton HHonors points.

Some HHonors members who had planned on a free stay are now planning to stay home instead.

To Keep Pace, Run Faster

So, how to keep from being blindsided by nasty program changes?

John Dewey’s maxim comes to mind here: A problem well defined is a problem half solved. If the problem is being taken unaware by new loyalty program policies and rules, at least half the solution is to pay strict attention and act promptly on the latest information.

At a minimum, that means opening each and every email from each and every program you’re invested in. And reading the fine print, not just the headlines.

The other half of the solution is harder to pin down. But there are some general lessons to be learned from the first half of the solution.

While it’s not often recognized as such, the time and energy required to keep abreast of such changes, and their ramifications, is one of the most significant costs of participating in travel rewards programs.

And that certainly adds weight to the argument in favor of picking a primary program and sticking with it. It’s simply that much easier to stay current with a single program than it is to keep up with multiple programs.

So pick a program and follow it the way you’d follow a stock you bet your retirement on.

Because what you don’t know about your loyalty program can hurt you.

Top Fares From

Comments