Whether you’re the most frequent of frequent flyers or someone who is more likely to have miles expire, understanding the real value of what you’ve earned is the key to making the right choices as a consumer.
With miles programs constantly being changed and consumers’ loyalties challenged, those with frequent flyer miles have to decide when it’s worth trying to accumulate more and when it’s time to cash in. And even when you want to use your miles for a flight, it might not be that easy.
“Miles are worth less and less all the time — that seems to be a constant,” said Jason Cochran, editor of Frommer’s and author of several travel guidebooks.
“The airlines have given so many (miles) out, partly in the pursuit of loyal business travelers, that they can be incredibly hard to redeem. It used to be that you could find a decent seat many months ahead, but now the market is flooded with points and seat inventory is down, so you may find you can’t find a free direct flight on miles almost immediately after schedules are published.”
There’s no one-size fits all answer for consumers, but having some perspective before using your miles should help to make a wiser decision — wiser, certainly, than letting them expire.
You know you’re an infrequent frequent flyer when you get that notice in the mail about converting your miles to magazine subscriptions or to donate or to redeem for some sort of gadget. For many, choosing one of those options might well be the best way you can use miles when you aren’t close to getting an upgrade or earning a free flight.
First, before you react to the notice that your miles are expiring, often sent by magazine subscription companies, be sure that they really are.
“Lots of outfits will warn you that your miles are expiring, and it’s true that some airlines do allow your miles to expire if your account doesn’t have any activity on it,” Cochran said. “But that takes a long time, and notice that those outfits don’t always tell you when your miles will be expiring. Look at your balance page yourself. It might be a year in advance, and if you should take another flight between now and then, the deadline will bump further in the future.”
Tim Winship, editor and publisher of FrequentFlier.com, said for most consumers the ideal use of miles is, well, on airplanes.
“The best use of frequent-flyer miles is almost always cashing them in for flights or upgrades. The economics are straightforward: the cost to the airline of giving away a seat that would have gone unsold anyway is negligible. As a result, a ticket with a published price of $500 can be had for 25,000 miles. That amounts to getting 2 cents for every mile redeemed.”
When airlines offer frequent flyer club members the opportunity to redeem miles for any number of different goodies, from golf clubs to electronic gadgets, they have to pay for them. That means the consumer ends up being charged more miles than they would to get the same value in airline tickets or upgrades. “For example,” Winship explained, “members of United’s MileagePlus program would have to pay 56,400 miles for a Callaway X2 Hot Driver golf club, widely available online for around $330. That’s less than 1 cent per redeemed mile. A Roku 3 media player, available from Amazon for $89, costs 18,200 United miles, delivering less than half-a-cent per mile in value.”
That doesn’t mean that you shouldn’t get the golf club if your goal was to not have to use any money out of your own pocket. “It’s nice to have options, of course,” Winship said. “But in the great majority of cases, non-flight awards are simply lousy values.”
As for using your airline loyalty bounty for hotel stays, Cochran said a similar rule applies. And it’s worth some pause before going in that direction.
“What’s worth more: what it would cost you to get that room on your own, or how much it cost you to accrue those miles to begin with? Given how easy it is to get a discount on a hotel room these days, the answer is almost never in favor of getting rid of miles for that purpose,” he said. “Yes, it takes a little homework, and not everyone wants to price-check the street value of what they’d be using their miles for — and that’s exactly what these pitches are about. They want you to spring for the convenience of the redemption for something other than an air ticket, and they know you’re unlikely to take three minutes to figure out if you’re actually getting a deal.”
That leads to an exception to the rules. It’s the one thing that consumers who truly have accumulated hardly any miles can take advantage of it. Magazine subscriptions.
Winship said using miles to buy subscriptions is actually a good deal. “In pure dollars-and-cents terms, cashing in miles for magazine or newspaper subscriptions can deliver a solid return on investment,” he said. “But really, how many magazines do you want in your mailbox?”
If you miles really are expiring, however, and you’re at the low end of the miles spectrum, at least it’s something. And least you know it really can be a good deal.