Delta SkyMiles Limiting Membership Rewards Points Transfers

There’s no denying that Delta has been trailblazing the way for the US airline industry when it comes to frequent flyer programs. They were the first to introduce a revenue requirement for status, and are taking it a step further in 2015, by awarding redeemable miles based on how much you spend as opposed to how much you fly.

There are some positive changes to the program as well. For example, they’ll begin allowing one-way award tickets for half the cost of a roundtrip starting in January. As someone that doesn’t actually fly Delta but accrues their miles through other means, I’d actually say the new program may be a net positive.

Delta

Changes to SkyMiles transfers from Membership Rewards

American Express has just announced a change to the Membership Rewards program which I didn’t see coming, however:

Effective January 1, 2015 Delta is making a program-wide change limiting the number of points that can be transferred into a SkyMiles account from any partner loyalty program, including the Membership Rewards program. As a result, there will be 2 important changes that will limit the total number of Membership Rewards® points that you can redeem for Delta SkyMiles: (1) the total number of Membership Rewards points that can be transferred out of any Membership Rewards account into one or more Delta SkyMiles accounts will be limited to 250,000 points per calendar year, and (2) the total number of Membership Rewards points that can be transferred into any individual Delta SkyMiles account will be limited to 250,000 points per calendar year. (A “calendar year” is 12:00 am MST Jan 1 through 11:59 pm MST Dec 31).

In other words, starting in 2015 you can only transfer 250,000 Membership Rewards points per calendar year to Delta SkyMiles.

SkyMiles-Membership-Rewards

From one extreme to another

The two extremes we’ve seen with Membership Rewards transfers to Delta SkyMiles is kind of hilarious. Going back a few years, there were almost always transfer bonuses from Membership Rewards to SkyMiles. Heck, I remember there being a 50% transfer bonus, plus they’d give you 25,000 elite qualifying miles if you transferred at least 100,000 points. They were literally begging you to transfer points.

The last transfer bonus we saw was in 2011 (boy, time sure flies!). So it’s not just that we’re going from huge transfer bonuses to no transfer bonuses, but now this is the first airline where the number of points you can transfer is being limited.

Why is this change being made?

There are a couple of ways this could be interpreted.

One way to interpret it is that Delta is actually trying to improve the value proposition of the SkyMiles program. They’re awarding fewer miles through flying, so they’re kind of screwing over their members that earn miles primarily through flying when people can transfer in an unlimited number of points. So could it be that they actually want to improve the usability of SkyMiles?

Of course there’s another way to interpret it, which based on Delta SkyMiles’ track record is probably more accurate. There were lots of people transferring in points and then booking mid or high level award tickets, that cost 300,000+ miles roundtrip. On one hand you’d think Delta wouldn’t be losing money on those kinds of transfers, but at the same time if those miles are being transferred and redeemed in place of a last minute paid business class ticket, or if those miles are being used to purchase the last business class seat on a plane, I can see how they wouldn’t be happy about that.

Those are the only two explanations that make sense, in my opinion.

Are airline/credit card relationships becoming less influential?

Now that airlines are actually making money by flying planes (as opposed to essentially running profitable frequent flyer programs which just happen to come with a fleet of hundreds of jets which exist solely to promote that business), could it be that airline and credit card partnerships are becoming less important?

Earlier in the year Delta began limiting the number of guests those with American Express credit cards could bring into SkyClubs, and now they’re doing this. It makes you wonder.

Bottom line

I guess this answers whether or not we should expect to see any Membership Rewards transfer bonuses to Delta SkyMiles soon. Personally this doesn’t really impact my earning or redemption strategy with Membership Rewards or SkyMiles, but I’m sure this change will be frustrating to many that frequently transfer points between Membership Rewards and Delta SkyMiles.

How do you feel about these changes? If you’re a Delta flyer, are you happy that fewer people not flying Delta will be able to book awards? And if you’ve transferred points from Membership Rewards to SkyMiles, will this change your behavior?

(Tip of the hat to Gary)

Comments

  1. Ouch. The two limitations together means they’re trying to put the screws to you both ways.

    “There were lots of people transferring in points and then booking mid or high level award tickets, that cost 300,000+ miles roundtrip.”

    Of course, partner miles only have access to DL’s lowest award level.

    So Ben, care to revise your previous statements that DL miles are easy to accumulate?

  2. What about the thought that Delta is charging Amex more to be a transfer partner, thus Amex is limiting the amount that can be transferred in order to cap any (potential) losses? It would be interesting to see if this is the case as one of Delta’s most profitable areas is the selling of points to amex and other credit card issuers to hand out to individuals who use Delta’s cobranded CC’s.

  3. Maybe Delta is jealous that some MR cards (like the Gold Rewards Plus card) offer a potentially better way to earn DL miles than DL’s own credit cards do, so DL wanted to encourage customers back onto its own cards? Seems more likely this will just encourage those with big MR balances to look elsewhere to use their miles.

  4. From what I’ve read, the transfer limitation is applied to ALL partners, not just Amex. So SPG, Mariott, Hyatt, etc. will all be subject to the same limitation. What I haven’t heard is whether the 250,000 limitation is cumulative or per transfer partner (eg, if you transfer 250,000 MR points to you SkyPeso account, does that preclude you from transferring more from your SPG account?)

  5. Why on earth would anybody want to transfer over 250k MR points to delta anyway? Just saying. 🙂

  6. 250,000 seems like a pretty low cap. For example if you wanted to book a single low level roundtrip for two people to Europe in business class, that is 250,000 miles. You couldn’t book two people on trips to Asia, Africa or Australia by transferring from a MR account. You would have to transfer to two individual accounts and then book the tickets on separate PNRs (and lose out on any elite benefits such as free cancellations for platinums).

    One other idea: maybe lots of Delta AMEX holders have been jumping ship to the PRG or other MR earning cards and transferring miles to delta instead. This rule will force big spenders to open up a Delta credit card again to earn miles rather than transferring miles.

  7. With such amazing “enhancements” from Delta, I don’t believe people will be unhappy to see their stock price plummet to over 3% in the last few weeks!

  8. This is clearly aimed to fix the flip-side of the revenue-based earning that starts next year. When that was announced, the consensus in the FF community was that only fools will be earning SkyMiles by flying now that credit card spend will get you so many more. This move drives people towards DL-branded Amex cards, which have no bonus categories except for spending with Delta, on one hand, and limits potential accumulation of SkyMiles via non-Delta channels (I’m sure they’d love to eliminate point transfer from MR or SPG altogether but that would piss of Amex way too much). Now, the most you can transfer in is enough miles for low-level Business Elite redemption US-Europe. You have kids/friends/family that need to come along? Too bad.

  9. I agree with Aleks. This is being done to fix the imbalance currently favoring credit card spender vs Delta fliers. If you’re going to benefit from being a credit card spender and not a Delta flier, Delta wants you to at least use THEIR card–presumably they make more per dollar spent this way than by Amex outright purchasing DL points via transfer.

  10. AMEX and Delta seem to see eye-to-eye with regards to utilization of flexible point programs. Both continue to take away benefits from its customers. With exception of Everyday cards, every AMEX product has become crap. If Citi has better transfer partners, then Citi and Chase, here I come.

  11. @Lantean,

    Agreed. I’m not sure why Delta just doesn’t end SkyMiles, they are so awesome in their own minds that they don’t need to compensate their loyal fliers – those users are lucky and should be grateful to be flying Delta!

  12. @ Benjamin Perley — this is unrelated to point-selling by brokers as MR rules were adjusted recently to only permit transfers to your own FF account.

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