DON’T SPEND YOUR MILES THAT WAY!!!

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While I’d argue some uses of miles are better than others, I’m generally pretty libertarian when it comes to redeeming miles. Redeem them however makes you happy, in my opinion. What matters is that you feel like you got a decent value.

The good news is that for the most part I don’t have to observe others redeeming their miles poorly. If you redeem 50,000 American AAdvantage miles for a domestic economy ticket which would have cost $200, I’d of course be sad if I knew about it. But the good news is that I probably won’t — you’ll book the ticket in the comfort of your home, and probably won’t talk about how much you spent on the plane.

But then sometimes you’re sort of forced to witness really bad uses of miles.

I was at the Admirals Club in Phoenix this morning, and as I was at the front desk, the lady being helped at the counter next to me found out that her Admirals Club membership had expired.

Admirals-Club-Phoenix

“If you’d like to renew, I can take care of that right now. It will cost either $475 or 70,000 AAdvantage miles.”

“I’ll use miles, that seems easier.”

Admirals-Club-Fees

That’s right, the lady spent 70,000 AAdvantage miles rather than $475. That means she got a value of less than 0.7 cents per mile. And that doesn’t even account for the fact that there are better/cheaper ways to gain access to the Admirals Club, like through the Citi Prestige® Card or Citi® / AAdvantage® Executive World Elite Mastercard®.

For reference, 67,500 AAdvantage miles is enough for a one-way Cathay Pacific first class ticket to Asia.

Cathay-Pacific-First-Class-777-01

If buying or selling miles didn’t violate AAdvantage terms, I would have jumped up to pay for her membership in exchange for the miles, and would have given her something for the time/inconvenience.

Again, I’m being mildly tongue in cheek here. Ultimately it’s possible that she’s miles-rich and cash-poor. And ultimately I should be grateful that there are people who redeem their miles poorly, because that’s part of what makes these programs sustainable and profitable.

But that doesn’t make it any less painful to be in a situation where you see someone redeem AAdvantage miles for less than 0.7 cents each.

Thanks for letting me vent… I feel much better now!

Has anyone else witnessed a situation where someone redeems miles really sub-optimally and struggled not to say anything?

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Comments

  1. Ben- I feel your pain but not your job and I say that kindly. I read your blog to learn even though I don’t fly for a living. If that lady can’t educate herself oh well. What I would suggest is to get a card with your blog address on it and give that to her. 🙂 “You can lead them to water but….”

    Thanks for giving us your time and expertise

  2. I’m going to just assume that she has a few million miles with no time or need to redeem them for fancy first class flights. I say she made the right choice in saving herself $475.

  3. I could see my wife doing that. She doesn’t manage her miles account like I do for her so she has little concept of what the miles are worth.
    This person could have also just been miles rich like you suggest (a 1%’er ). I have a friend that flies A LOT with Delta and has little chance or desire to use his miles for travel so he is known to burn a few hundred thousand out of millions on upgrades, etc.

  4. all the time. i have colleagues who brag about using MR points to pay for cab rides, transferring UR points for UA Y flights to the midwest, etc etc.

    let them do their thing. keeps more of the good redemptions available for us! 😀

  5. We should all thank her and others like her profusely for helping keep awards we like viable.

    She is smart and doing the right thing.

  6. I have the same feeling when I see someone taking out their check book to write a check to pay for their shopping at Costco. Oh, and they take the time to make sure they do the balance on the back of the check book. Unbelievable!!!!!

  7. I actually like seeing people spend miles at terrible rates for all sorts of stuff. Means less people using miles for awards and hence better availability 😉

  8. My mom once redeemed I think 360,000 Delta miles for a single ticket. After that I instituted a policy where my parents cannot redeem their own miles without my involvement.

  9. @Chris: Well, since it was with Delta redeeming ONLY 360,000 miles was probably an amazing deal. 🙁

  10. @pavel

    I’ve actually done a couple transfers to UA from UR for Y trips to smallish Midwest cities recently. The fares were already $600+ for a nonstop flight (and I was not very flexible on timing or dates) and the same flights only cost 10,000 UA miles. Sure, it wasn’t the best use of miles but I certainly wasn’t going to pay $600+…

  11. Spare the trouble for the old lady, she probably not getting the wrap of counting to pennies. She said it: ““I’ll use miles, that seems easier.” Easier is the keyword here.

    For the rest of us poor souls here, I will calculate CPM vs. EQM vs. EQP vs EQS. (MQM MQP MQS etc). MOve along troopers.

  12. @chasgoose: +1 Agree!!! Delta charges $1,200 for a round trip MSP-OMA or MSP-IND so that would be a good use of miles to not pay that ridiculous amount of money for a 500 mile flight.

  13. @chasgoose – Sounds like a great use of UR to me if the ticket was that expensive to pay for. I have done the same a few times – the 10,000 MP short flights can be a great deal last minute.

  14. I see it happen every day — indirectly — when they pull out cash to pay for something. smdh.

    This is why I said that article had it wrong – we’re not outsmarting the airlines, we’re outsmarting everybody else.

  15. Ha, all the time. Most people view rewards programs as some form of scam: you never seem to have enough points for anything, and when you finally do get enough points for something you want, the airline/hotel/whatever makes sure it’s not available on the date/flight/etc that you want.

    The airlines ruthlessly take advantage of this skepticism by offering low-points awards that are actually a very bad value compared with what you can get with just a bit more effort (the classic 25,000 mile domestic economy ticket being offender #1). Most people won’t put in the effort, or don’t know how, or don’t believe the effort will pay off – so they are just thankful they can use their miles for something.

  16. I see nothing wrong with this approach. I can manufacture 75k AA for $75.45 in about one hour time(all from home). Too bad I can only manufacture 225k per month. I would have done the same thing.

  17. While I agree with the general point of your post, I think it gives people a false sense of hope to tell them that they can just take that 67.5K in AA miles and book an F seat on Cathay JFK-HKG. In theory that’s true, but in reality getting an F partner award seat, God forbid two, is virtually impossible now – either far out or close in. I booked two seats in C 330 days out for travel this past April and checked every single day up until the day of travel and nothing ever opened up. Of course, YMMV.

  18. Every time I see someone redeem miles in a foolish way a little part of me dies. BUT, like has already been said, if everyone redeemed miles for exotic travel there would be less seats to go around.

  19. @travel4b: Thank you for injecting some reality into this situation.

    Here’s my take:

    1) You want to spend your miles. Otherwise, they will continue to be devalued, or, eventually, expire.
    2) Some people can’t travel internationally easily; I cannot, and read your blog because I’m interested in what that travel looks like. The current rules require a certain amount of flexibility.
    3) Even domestic travel might require a lot of planning, say, if you have a family with limited availabilty for time off.
    4) #1-#3 conflict with each other. Spending her miles for this purpose, even though it is low value, is probably higher value than continuing to hold on to 4 million miles until they are virtually worthless.

    Good to get a broader perspective; Ben, you seem to be doing quite well in your profession and many items are entertaining. I appreciate you adding Travis (or Nick?) – whomever travels with their family – but they seem to have a fair amount of flexibility. Useful, perhaps, to highlight someone who had to plan carefully and what that looked like from your perspective as you helped them.

  20. I had convinced a buddy at work to sign up for a 50k sapphire offer and about a month later he thanked me because his wife was really happy cause she got a $500 gift card to some crappy store.

  21. A friend once told me about a friend of his who signed up for two Southwest credit cards to get a TV. He had 100,000 miles and was only 10k away from a companion pass, but he only wanted the TV and was excited when he got it. To each his own.

  22. There, but for a few years, go I.

    Way back in the day, when I was a higher elite, there was no credit-card alternative and I could buy a membership for 40,000 miles or $400. They were giving me well over that amount every year in bonus miles, and so I just used the miles to spare the cash. I was mile-rich at the time.

    The last year I did it, I paid 90,000 miles for two years. When the price went up from there, I flipped over to cash, then the Exec, then the Prestige. The Prestige is only $100 for me, net.

    Now I struggle with scheduling constraints to spend my miles. I made the right decision for me at the time.

  23. Oh Gosh, what a waste. I had a similar situation with a friend the other day who wanted to redeem for a $80 voucher instead of miles, which would have gotten x10 the value. I can see many people doing this as they value more the cash than the points….

  24. @travel4b: I could not agree more with you. When you read travel blogs it seems very easy to fly in international first class or any business class for the lowest level award. Well, good luck with that!!! It is easy for people that all they do is travel using miles and they don’t have dates or time restrictions. For the majority of people that have normal jobs and family with kids in school that is virtually impossible. My point here is that when I read the travel blogs I feel a bit stupid because it seems I am the only one that cannot get those amazing deals. Well, although I am fortunate enough to have a very good job I just cannot tell my boss I am taking vacation whenever a great deal is posted on Boarding Area.

  25. Ignorance is bliss. I have a buddy from college who just got into the points game. He recently spent a “load of miles” on a domestic flight from PDX to SLC. I gave him a hard time about it and immediately told him to start reading your blog, Lucky.

    And travel4b is right, it’s so hard to find a CX First award these days. I’m nabbed one for next year, but it took booking 330 days out, a lot of chanting and a little luck.

  26. Ever since my mom spent 20,000 ThankYou Points to get a mini fridge that holds 2 cans of Coke, she and I do not discuss miles and points anymore.

  27. @chasgoose

    You’re getting 6 cpm and you think that’s a “subpar” use of miles? My J trip from DC – SE Asia and back on CX clocks in at about 6.5 cpm.

    As much as it pains me, if I have a domestic trip that “costs” 6 cpm, I’m either not taking it or paying with miles. ‘Cause 6 cpm means a lot of cash.

  28. A few years ago, I got a snail-mail offering me various magazines in exchange for the few Delta miles I had. Thinking they would probably expire before I could ever use them, I almost bought a few magazines but lost interest when I realized I probably would never have time to read them. Later, I decided to check the expiration date and found out they never expire. Be devalued yes, but not expired. I think I am getting close to a ‘free’ last-class one-way ticket, but, with Delta these days, one is never sure.

  29. What pains me just as much are when people “waste” inquiries on subpar products, particularly with “prime” issuers.

    Take my mother for example… she calls me up not too long ago and says, “hey! After all that talk from you about credit card rewards, I finally listened! I got the Amazon card and saved $30 off my last order! Isn’t that awesome?” Mom, who issued that card? “Chase!”

    Sh!t. I had to tell her it isn’t awesome. While my parents don’t have near the aspirations to travel that I do, I still live 600 miles from them, so saving a few $ on domestic coach airfare is something they “need” to do. They’re not flush with cash, so a few hundred $ saved is a few hundred $ saved.

    Dad at least paid attention and got the UA card when it had a 60k bonus. We’re taking a transatlantic cruise from Europe next year, and 60k is enough to cover their two tickets over the pond. Sure it’s Y, but it still saves them ~$1600. Which is certainly real cash.

  30. People earn miles just like they earn cash. They have a right to spend however they like without any criticism.

    I don’t get all the hate.

    I don’t walk by a nice restaurant and say “look at that fool, they could have gotten a meal somewhere else for a better deal”.

    To each his own.

  31. On this blog and in other enthusiast communities, people like to use miles for aspirational redemptions. However, most people prefer to use miles for more practical rewards – that family trip to Florida (on a the exact date they want it), reimbursing cab rides or hotels, etc. This is why mileage programs are rated so low by customers – it is hard to redeem for what they want, when they want. The customer in the post didn’t want to spend the cash so she used miles. Could she have used the miles in a more valuable way? Yes. Does she necessarily want to redeem Cathay, Emirates, whatever? Maybe not. Maybe she doesn’t get value out of these aspirational trips we like here.

  32. The worst was when I watched my seat mate spend 10,000 miles for LH fly net that would have otherwise cost $25…

  33. Our one could ask why ANYONE would fork out miles or cash to visit ANY Admirals Club lounge as they all offer very poor catering, limited (house) drinks options. Limited competition festers a woeful product.

  34. My parents just redeemed around 250K AmEx MR points for 5 (I think) nights in a nice hotel in NYC. I told them they could’ve both flown to Europe in J for that, but they’re not terribly interested in doing the same thing with their miles/points that I am with mine. And that’s OK – different strokes for different folks.

  35. God bless her heart. Sounds like the beginning of a Preston Sturges movie. Foolish purchases are a main driver of the US economy, and surely buyer’s remorse is among the most common mental tics in America. By rights we should have fireworks and parades for the people whose serial squandering feeds the fine-grinder of profit — which keeps the rest of us in clover. If this had happened in an Ayn Rand novel, everybody conscious at the bar would have broken out in applause.

  36. AA miles are worthless trying to redeem TPAC F class now days.
    I’m sitting on 1 million plus AA miles and now I find myself redeeming for hotels at 1 cpm.
    It’s pitiful.

  37. @ WorldWingedExplorer – wow! I’d be happy to acquire points at 1 cpm… *sigh*

    @ Sam — JAL doesn’t show up on AA site but it’s not impossible to score. I got ORD-NRT and NRT-LAX for next year.

  38. @Dan

    True, and those UA redemptions made it possible for me to visit my sister in CVG many more times than I would have this past year (I literally never saw a nonstop flight from NYC-CVG for less than $400 one way), but I’ve moved spend away from UR recently, so using a flexible miles currency hurt a bit more. I think the thing is ultimately, I always have enough mileage currency to take the aspirational international F trips that I can afford the time off of work for (at most like once a year) so beyond those trips, I pretty much see my extra miles as ways to save money on domestic travel. So yes, while I could have used those miles towards a SQ Suites/LH F extravaganza or something, I wasn’t going to. Once I know I have enough miles for my one big trip, I kind of treat the rest of them as a slush fund to be used at times when the airfare for shorter weekend trips domestically is high enough that it makes me question whether I should be taking the trip to begin with, that is when I often make what Ben would probably see as “questionable” rewards.

  39. Have you considered that there are people like me who do not want to get on another plane (even for vacation) even if its CX F? I fly J or F for work very frequently and there is no charm in another flight and I’d rather spend time at home with my children.

  40. How about this one? My friend just let his 80000 miles in his account expire because he forgot to keep his account active. Poof! 80000 miles gone for nothing!

    At least that lady got $475 worth. All my friend got was a big laugh from me!

  41. Again, what a narrow minded post. You don’t know this woman or her circumstances and yet you proclaim this was a “really bad use of miles”. If she really was miles-rich and time-poor then what she elected to do made perfect sense – she wouldn’t miss parting with those miles and in a tick she’d be on her way. How people choose to spend their own currency, be it cash in the bank or miles in the FF account, really is their own business. Making a huge post about it (and in all-caps for the title no less) is just so crass.

  42. So I guess I am one of those idiots who just decided to use their miles for lounge access. Myabe had I foind the prestige card I wouldn’t have, because I will bank miles – I don’t have 4 million – and the cost was a bit painful. But right now, my flying is such that having a place quiet to crash domestically between the never ending delayed flights and get some food seemed worthwhile. I saw an opportunity to open a card account that gave me 50k after that initial spend, which I know I am about to do, and so I felt it was covered pretty much right off the bat, and then at the end of the year, I can dump the card. I realized that with my status the access on international flights was great, but with heavy domestic at the moment, it seemed nicer.

    Do I take the exotic trips? About once every other year, and I have had the joy of ANA roundtrip to Tokyo on the Dreamliner Business Class ,which is better than most Airlines first these days, including roundtrip domestic to Okinawa, for 90k. I can do that twice once I get my 50k, which will happen in 3 months. In fact, in 3 months, I will have back all the miles I spent and then some.

    At the end of the year, I will decide it is worth it to me, or I prefer the kind of access an expensive credit card gets me. Maybe I will, but considering how much of it is what I already get with Status, I prefer not to spend several hundred dollars a year on a card.

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