Chris Elliott calls loyalty programs a scam… again

Chris Elliott, everyone’s favorite travel “journalist” and “consumer activist,” scribbled some more of his insights onto the interwebs today. I was hoping he’d take a break from his usual ridiculousness after arguing a couple of weeks ago that minibars should be banned by law, not just because they’re overpriced, but because they’re not good for you. Perfectly logical argument, right?

Now, I don’t even know where to start with his article, because it doesn’t really make sense. The problem with Chris Elliott is that he claims to be a “consumer advocate,” but when people are too lazy to hold themselves accountable for poor decisions, it’s suddenly the travel provider’s fault, and the travel provider is running a “scam.”

He also doesn’t seem to understand the difference between the benefits of elite status and the benefits of having a co-branded credit card that accrues points. Or maybe he chooses not to understand that, because it just wouldn’t fit into his argument.

Why are loyalty programs going to hell?

David Deehl, an attorney who lives in Miami, says he feels betrayed by recent loyalty program changes. As an elite-level traveler, he expects preferred treatment from his preferred carrier, Delta Air Lines. But when he missed a recent flight from Miami to London, he discovered his Silver Medallion status didn’t mean much: The airline asked him to pay an extra $3,400 to fly.

Except the issue is that being rebooked on another flight for free isn’t an elite perk. Not for any airline I know of, and not for any status level. Now, usually airlines will accommodate you if you miss your flight so this doesn’t sound totally right, but even if it is, it has nothing to do with elite status… because it’s not a perk! But it seems like some people take the approach that “I have elite status so I should get whatever I want.”

Delta’s revamped program, which, starting next year, awards elite status based on the amount of money spent and miles flown, makes it significantly harder to maintain Deehl’s Medallion status. It represented the final straw, he says. He’s burning the 400,000 leftover SkyMiles in his account and vows to buy future tickets based on price and convenience, not whether he can maintain his elite status or score a “free” award ticket.

I suppose to Chris this is a novel concept, but believe it or not you can be loyal to an airline and at the same time still make “smart” choices. You should never blindly book an airline simply because you have miles or status with them. You should decide what those perks are worth to you, and if your preferred carrier is more expensive, decide whether it’s worth the incremental cost to fly them.

And then Chris goes after me (and other bloggers):

For years, loyalty programs flourished, thanks to a conventional wisdom that everyone should carry a rewards card. The programs grew at a cancerous rate, fed by an unskeptical mainstream media and a small army of bloggers who were generously compensated for endorsing the loyalty lifestyle. They hawked a handful of bank-issued affinity credit cards with excessive point-bonus awards for which they received a generous commission check whenever a reader signed up.

Now again, it would really help if Chris acknowledged the difference between being loyal to an airline as a passenger and using their co-branded credit card. I’m not going to speak on behalf of others, but I didn’t make a dime for the first two years I was blogging, and by connection I suppose have been “endorsing the loyalty lifestyle.”

By “endorsing the loyalty lifestyle” I assume Chris is referring to all the first class trips I’ve taken internationally on miles.

These program apologists will trot out their same tired reasons why you should always be loyal. The programs are free, they’ll say, and look at what I got by being faithful to my airline: a “free” ticket to Hawaii, or a “free” upgrade to business class.

Nobody should be blindly loyal, and I think most people are smart enough to recognize that. Yes, I do believe you should always accrue miles in some program when you fly. That’s different than being loyal to that program.

These arguments are too easily debunked. Loyalty programs aren’t free. At a minimum, members fork over their valuable personal data and spending history, which is shared with a company’s marketing partners.

Are we talking about using credit cards or joining loyalty programs? Because I’m not sure what “spending history” you’re forking over by signing up for a frequent flyer program. If you’re talking about credit cards, are you suggesting people forgo using rewards based credit cards altogether so they don’t have to give out their data? Even the ones that get you 1-2% cash back? Because those programs also track your spending history and you’re giving them your personal details.

And here’s the real crux of his argument, and I think what sums up his approach to this stuff perfectly:

Here’s what is true: A few people are benefiting from loyalty programs, including top-tier frequent fliers, usually traveling on their company’s dime, and hobbyists who spend their free time figuring out a way to game the system.

He claims to be a consumer advocate. But he’s only a consumer advocate for people that don’t put the effort into understanding the programs. Anyone that puts a bit of effort into understanding the programs or benefits from a loyalty program is a “gamer.” Here’s an idea for a future article, Chris — why don’t you interview people that have “legitimately” accrued hundreds of thousands of miles through credit card spend (not “gaming” the system) and redeemed them for a vacation where they flew in first class and stayed at five star hotels? If you’re interested, Chris, please email me, because I’d even be happy to send some people your way that would be delighted to share their “success” stories.

Anyway, the rest of the article is equally ridiculous, but I won’t continue to rant. It’s going to give us all headaches. So instead let me offer some constructive advice (perhaps to Chris and his target audience, because I assume you guys already all know this):

First some thoughts on elite status. Chris is absolutely right that elite benefits are decreasing and the difficulty of getting elite status is increasing. Everyone needs to decide for themselves whether the benefits are worth it. Nobody should blindly be loyal. About a week ago I even wrote a post entitled “I give up on elite status.” But there are huge benefits to be had, and in many cases it can make sense to pay a premium to fly your preferred airline.

Next, unlike Chris I don’t think there is any downside to joining a loyalty program. If you take a flight, always credit the miles to some program. If they end up expiring then so be it. You spent nothing additional to accrue them so you lose nothing by having them expire (though there are plenty of ways to keep them active with minimal cost).

Lastly on the elite status front, understand your benefits. Understand what you’re entitled to, and don’t expect things you’re not entitled to. If you’re a Silver Medallion you’re not entitled to free flight changes. If you have a certain level elite status you’re not entitled to upgrades a certain percentage of the time. And when you don’t understand the benefits of a program, the only one you can blame is yourself.

As far as credit cards go, I actually agree that it’s rather frustrating that loyalty programs own the points and can change them however they want at anytime. That’s especially true because there’s almost always an opportunity cost to accruing points. But in a way I look at loyalty programs as benevolent dictatorships — devaluations happen and we have no say in it, but if it’s a program we can “trust” they’ll usually give us advance notice and at least be somewhat reasonable.

And it’s true that to some degree accruing miles vs. cashback is a gamble. And like any gamble in life, each person has to determine what’s most valuable to them. Rather than using a credit card that accrues a certain percent cash back I’d rather accrue points that give me the chance of redeeming for international first class, a ticket that would retail for $20,000 and I could otherwise never afford (then again, perhaps Chris would argue that the government should ban international first class as well, since it’s overpriced and the food isn’t good for you).

But not everyone should use a credit card that accrues miles. Everyone needs to decide what their rewards “goals” are on a credit card, and plan based on that. If you have a family of five and want to redeem points for flights to Disneyland, you’re almost certainly better off accruing a points currency with fixed value rewards, like the Barclaycard Arrival, which accrues the equivalent of 2.2% cashback towards travel.

Meanwhile, I’m happy using a card like the Chase Sapphire Preferred for my everyday spend, which accrues a traditional points currency that’s still very flexible based on how many programs the points can be transferred to.

Anyway, I think it’s time for a drink…

Comments

  1. When I first found his site, I found it interesting. After about two weeks of regular reading, I gave up as it seemed it was nothing more than a “I messed something up and don’t want to be held accountable” blog.

  2. Chris Elliott is unreadable, likely because A) He can’t write, and B) He can’t seem to escape the dome of envy under which he lives.

    Please, never speak of Chris Elliott again.

  3. I agree with you Lucky. Only thing I would argue is that low-mid tier status is getting easier to obtain. Top level is getting much harder.

  4. Interesting. However, I’m pretty sure all of his readers come from bloggers defending loyalty programs after he has a post to be controversial. So I prefer not talking about him too. :-p

  5. From a selfish perspective, he is doing us a favor. The miles and points game would be better if there were fewer participants. To the extent he scares people off, he is actually helping the rest of us. Sort of like people not moving to Seattle because the weather is supposedly so bad. If not for that fear, Seattle would be even more crowded that it already is.

  6. Spot on analysis as usual, although I’m surprised no one has mentioned the sheer and utter hypocrisy of his own website, Elliott.org, which is littered with CC ads!!! The very same ads that presumably earn him a referral when he piously states that: “They hawked a handful of bank-issued affinity credit cards with excessive point-bonus awards for which they received a generous commission check whenever a reader signed up.” Is this guy serious? Really? I counted no less than 6 different CC ads on his website. What a clown.

  7. I too wish we wouldn’t give him the satisfaction of talking about him. I honestly think we are the incorrect demographic he’s trying to market at. I think he thinks he’s the peoples voice for the middle-class who only travel on a recreational basis. I think it’s a big game in order to be loyalty-savvy, if you just walk around flashing FF cards…you’re not going to automatically get king treatment. But, this is why I always say people like Lucky do well at these blogs (that are better than any article I frequently read) because he grew up from the travel industry…industry knowledge. I wouldn’t be surprised if Chris Elliot has some fancy-schmancy degree of Journalism without growing up with industry knowledge, but, like he keeps saying, it always seeing it from a consumers eye. That’s why I always say, they have Journalism/Communication degrees majoring in politics, law, media, sports, linguistics etc, but they don’t have a major in Tourism (and I haven’t seen any in Aviation. So we get travel journalists who basically ‘sleeps’ their way to the top. Anyway, that’s my vent. I would suggest Ben gets a permanent position with the LA Times, or Travel & Leisure buuut… it would mean he wouldn’t get to write about what he wants. I think slowly but surely, industry bloggers are out-smarting many consumer-grown journalists…. and it’s peeving them off, heehee.

  8. Chris Idiot is an Elliott, and vice versa.

    I too find that you and Gary give him far too much publicity. The less I hear about him, and his published dis-information, the better.

  9. Maybe Chris would like to join my husband and me on one of our three overseas flights this year on United 903 out of SFO in United Gobal First class – with those double miles we earned as 1k members.. And then I will tell him how horrible it was for me to be able to call the 1K line and get rebooked on a later flight a couple weeks ago when the Denver airport was closed for a few hours because of fog – as soon as our plane landed to refuel in Colorado Springs thus avoiding those long lines at the customer service desks once we arrived in Denver. And I will also let him know that my miles are on my dime – as one-half of a commuter marriage no one else is picking up my tab.
    But hey Chris hope you thin the ranks – those of us who fly out of SFO would appreciate shorter Premier lines.

  10. Lucky, I applaud you for taking the high road with this guy. I don’t know that I could have. I really do appreciate that about halfway through this post, you suggested we leave some constructive advice, rather than continue to whine about how wrong this guy it.

    The way I see it, I am paying an airline to get me from point A to point B, faster than I can get there by driving. That’s their job. Anything extra that I get (occasional upgrade, redeemable miles, half a can of Coke, whatever!) is above and beyond what I’ve paid them for. The end.

    I follow this blog and others to get some tips on making the extras a little nicer, but fundamentally, I just need to get from A to B.

  11. I don’t game the system with manufactured spend and am just a leisure traveler, but I’ve managed several great first class trips, five star hotel stays, and the ability to fly family and friends to see us…..all on credit card bonuses and typical spend.

    Oh, and my credit score has gone up!

  12. Sadly I’m starting to agree with him more than you.. All you do is tout credit card links nowadays. You even had to throw one in this article…. It’s like you are addicted. Has it become physically impossible for you to write one whole post without selling out for part of it?

  13. I agree with what you present.
    I am Lifetime Gold on AA, and fly 25-50K/ year on AA. I question the wisdom of no longer offering Preferred seats as of 1/1/14 and giving most Citi/AA cardholders the same percs as elite members. Why should one aim for Elite status?

  14. @Tyler- How much did you pay to access the information on this site? Are you the one paying for the site maintenance and bandwidth? If Lucky can make a few bucks to offset those cost, why do you care one iota? The information you receive has got to be worth the excruciating pain of seeing a CC link without having to comment on it.

  15. @Tyler – Who cares if Lucky makes a few cents/dollars off putting a referral link in his posts? He needs to make a living and pay for the site, and it doesn’t hurt us by him recommending a few cards. And I don’t understand how Lucky putting referral links affects who you believe more — at what point did the idiot refer to referral links in his piece? Your logic is poor, to say the least.

  16. I am not so sure Elliott is totally wrong here. I agree he is an idiot in general, but he has some valid points. I used to be caught in the rat race for Platinum or Cryptonite level, and now I fly almost anybody. Funnily enough, now airlines throw status at me. Don’t let your hate or anger for Elliott miss the truth and there is some in his article

  17. Personally, who cares.

    If he wants to spout crap about programs having no value and whatever his argument today is, let him have it. For many people these programs make no sense. For some, they do.

    Why give him more ink space?

  18. i don’t understand the hate towards this guy… he is doing us all a great favor. the more people he discourages from ff programs, the more awards seats will be left for us and the harder the airlines will try to entice customers by having more promotions we can take advantage of.
    this is truly great for us all, i hope the word of his blog spreads to all the sheeple willing to believe him. then the rest of us can continue flying in f without much competition for the seats from them.
    he deserves a medal… or at least a bj.

  19. timmer1001 said,

    “Don’t let your hate or anger for Elliott miss the truth and there is some in his article.”

    ^ I’m tempted to see this debate in a similar fashion. I don’t consider either side to be unbiased and both sides seem to be influenced by emotion. Haters gotta hate I suppose.

    So far as I can tell most Americans are not able to evaluate and use loyalty programs and kickback credit cards in a responsible fashion. That’s why these programs are willing to throw around so many points in the first place. They’re banking on you to get caught up in a lazy cycle of careless loyalty and debt.

    More often than not the loyalty programs and kickback credit cards get back more than they give out. If they didn’t they wouldn’t exist. American programs give out more points than most other regions, not just because we expect more, but also because we have fewer protections to help us avoid getting burned in the process.

    Harsh penalties with limited recourse may be the American way, but it’s also a real threat to our financial well being. And yet you rarely see loyalty and credit blogs discuss what happens when you start falling behind on your payments.

    It’s as if they think every person who signs up is inherently responsible and won’t be tempted to spend more than they have when they lose their job or suffer an illness or injury or legal complication that serious enough to set them back financially.

  20. @Dax: Smart, intelligent points made here. I’m a ‘live and let live’ guy. There are far too many people spouting untruths or twisted info that singling out one I’m not sure really is that constructive.

    On the other hand, this could be seen as a threat to lucky’s business/job (in a way), so lucky felt compelled to respond. Might I suggest reaching out to Chris and taking him to lunch and having a broader discussion to see if you can enhance each other’s lives rather than angst? Maybe, but merely a thought nonetheless. Still, I applaud lucky for systematically taking Chris to task on his points and addressing/debunking them.

    But Dax makes another great point, and one I’ve always mentioned to my friends when it comes to using any affinity card. I boil it down to one word: Discipline. A key ingredient that if you don’t got it, don’t get the card or you’ll end up in the laziness Dax speaks of.

  21. Elliot is right that “free” doesn’t mean “free” (for instance, loyalty credit cards have annual fees), but as soon as you understand this, you realize, as you’re drinking your champagne in business class somewhere over the Pacific Ocean, that you’ve spent less than the cost of an economy class ticket to fly in style and comfort.

    If that’s a scam, it’s the kind of scam I like. Certainly I don’t get my business/first class awards by gaming the system, but by making judicious choices. Anyone can do this. The mantra that “frequent flier programs are all a scam” applies only to those who haven’t spent more than 5 minutes thinking about how to take advantage of them.

  22. Managed to get two referral links in…nice job, I love how you can always add these links into even the most mundane posts

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