Frequent flier programs are a scam - here's why you should quit yours now

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Reggie

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From Christopher Elliot

"If you're like 90 percent of business travelers — which is to say, if you drive everywhere but only board a plane occasionally — I need to warn you about an unusual sales pitch you'll probably hear when you fly home for the holidays.

Look for a fast-talking salesman lurking near the gate or a flight attendant trolling the aisle before landing, hawking a credit card that comes with enough bonus miles for a "free" ticket.

My advice? Don't just say "no," but, as an old coach I knew at the Naval Academy would put it, say "hell no!""

Link to full story below


http://www.linkedin.com/today/post/...e-a-scam-here-s-why-you-should-quit-yours-now
 
Could it be that frequent flyers get more benefits out of a "Frequent Flyer" program than occasional flyers? Surreal!!!

Sent from my HTC Desire using AustFreqFly
 
The person who wrote the article - Chris Elliot - is a consumer advocate (and it's not like he keeps it a secret). That's not to say he doesn't have a point, but he addresses the article from the point of view of the every day person, that is the person who may be tempted to sign up for FF programs hearing the words "free flights" without realising that you also need to put in the BIS miles to take advantage of any such things, and who may not realise the full T&C's which come with that shiny piece of plastic, and more importantly have no interest in learning about them or how to make them work.

Personally I believe FF programs are not for everyone, but that said I don't see the problem with someone who was going to do a few flights a year anyway signing up to a FF program to collect points even if there is no real goal given most FF programs do not require any additional payment to receive FF points. (JQ fares and non earning discount Y fares excluded).

I think that some of the advertising of FF programs does go overboard. There is no way you'd ever be able to get a free J or F seat on a transpac flight without doing some serious BIS miles first, something that a person who does a discount Y SYD-MEL vv every few months and doesn't have a massive CC spend would no doubt see in the promotional material, but would have little chance of ever affording without some serious saving of points.

In any case, as was mentioned at the top of the article, there is a small group of people (aka us) who can make these programs work, and thus we shouldn't be reading the rest.
 
Who's going to redeem the toasters?


Very likely to be posted via iPhone or iPad :)
 
FF programs only really benefit FFs.

If I only flew a few times a year I wouldn't care about them and would just buy the BFOD.

Trash-TV like ACA and Today Tonight love to run stories about how much of a rip-off these programs are - for most of the morons who watch these programs they are. They love to point out how much CC spend you need to redeem on QF - i.e. you have to spend $16,000 to get a flight MEL-SYD which is only $100 to buy on sale.

My argument is always, yes, you might have to spend a lot of money to get a flight but its a free flight - if you spend that money on a debit card instead you don't get anything for it.

1 thing I have learnt from this site is that SG and WP status is really only attainable if a) you have a job that requires travel that your employer pays for, or b) you can afford to spend a LOT on leisure travel.
 
Christopher Elliott - self-proclaimed consumer advocate - has been a long time opponent of frequent flyer programmes, particularly in the USA, but all and all in general, and against the idea of both earn-and-burn as well as elite status.

I remember an article a while ago that proclaimed that the idea of elite levels is pointless, in that the benefits which are being given to elites should be given to customers, since supposedly every customer is valuable to the airline, or why should the frequency of which a certain customer patronises an airline be the basis of them getting special treatment. For example, lounge access, which is only available to certain elites and not passengers who may not fly as often as elites. The fact that a non-elite passenger can't access a lounge but an elite can, despite they may have the same kind of air fare for the same seat on the same plane, is a form of unfair discrimination.

His article (not really an article, it's just a post up on his LinkedIn, so not really published, and not much different to a blog entry - or a forum post for that matter) holds some merit, but it needs to be dissected carefully. Not to mention his language is anything but diplomatic, and seems to demand a confrontational solution rather than an organised one.

I've got a bit of time running simulations so let's dissect it a bit. Go get a coffee or tea first, this might take you a while.

Frequent flier programs are like pyramid schemes in at least two important ways: First, only a few people at the top of the scam benefit in any meaningful way. You see these elite-level cardmembers perched in their first-class seats, sipping their mimosas, while the rest of us do the perp walk to the back of the plane, where we wedge ourselves into those ridiculously small economy class seats.

One serious problem in America with the unlimited upgrades for elites. But even then, that has no relation to the pyramid scheme argument. I suppose Elliott is old enough to remember the Economy class from the days of yore, with more pitch, but we'll probably never get those back again. (And no, Economy seats in the old days were no wider than now! And probably a little bit more uncomfortable.)

And second, many of those elite program apologists will do anything to defend the system that has rewarded them, the chosen few who excel at the mileage game. They argue incorrectly that loyalty programs are good for anyone. When that line of reasoning fails, they backtrack and claim that if you're a frequent traveler, you'll benefit by belonging to their little club (also almost always wrong). Finally, when they're cornered, they resort to ad hominem attacks against anyone who criticizes their beloved frequent flier programs.

To be fair, at least on Flyertalk, the last part is sadly true in part. Especially if you check out the Mileage Run discussion forum, you'll find many people who even try to raise concerns about certain frequent flyer mistakes (not necessarily a polar negative argument - just raising concerns) are often shot down ad hominem. That, and/or they are usually then ignored with the forum function. Not conducive to diplomacy and certainly Elliott has a point there.

In a way, the first part of the argument is also somewhat true. Those at the top enjoy certain benefits, and even here we make it well known what some of those benefits are. People are frequently divesting a bit more to achieve top status for these reasons. But when the number of people who have top status increases, what happens? Now everyone seems to be on the same level with the same elite benefits. And it also seems that those who earlier were at that top status feel slighted because now everyone has the same benefits. It may not happen here as much, but there is certainly that entitlement in Elliott's home country.

Finally, there aren't a lot of reports or a lot of assistance / advice on any frequent flying forum that I've seen which guides those who cannot possibly obtain top status to obtain a satisfactory outcome from their status. This is where Elliott's challenge is most prevalent - it seems the game is almost a "all or nothing" proposition (save for things like US DM and AA buy-ups) - you either go for top status or don't go at all. There's not a lot of advice, comfort or solace for those in the middle. Most of them seem to content themselves but never have evaluated the entirety of their value proposition.

It's a bait and switch. Reward programs promise you a "free" flight after just a few trips or by signing up for a scammy credit card filled with hidden fees. But what they don't advertise is the fact that it's based on scarce (in many instances, nonexistent) seat inventory. On some popular routes, there may only be one or two seats available for people who want to redeem miles, but I hear from too many loyal frequent fliers who complain that they couldn't find any seats at all. Even if you stumble across a "free" seat, airlines forget to mention that you might have to pay extra fees for the privilege of redeeming the miles.

I'm not sure in Australia and New Zealand whether there are still big signs and words saying that you can build up points to redeem for free flights. (I think they keep the same words there but drop the "free" descriptor). I know in America it's quite common to hear the moniker "free flight" (e.g. 25k AA points = a free flight within the USA).

Definitely there has always been that contention of auxiliary charges on redeeming points for a flight, and outside of USA there is YQ to consider. That contention has been compounded by falling ticket prices in Economy (and in other classes to a lesser degree), which makes the real economics of redeeming Y flights very, very marginal (after including auxiliary costs).

There is still a good proposition in premium cabins, if you can get the seats. Redeeming for miles (assumed earned non-artificially, e.g. through flying as needed, credit card spend etc.) for Business or First class, plus auxiliary charges, will frequently do better than if you had purchased that same ticket in cash. Buying miles for premium awards (e.g. US DM) gets a bit different, but people rationalise it as travel they would want and normally pay Y or a little more and get the same thing in J or F.

The only validation on Elliott's part would be if frequent flyer programmes were abolished, would the costs of Business and First class seats drop substantially? Maybe they would drop, but I wouldn't bet the house on "substantially".

It completely short-circuits your common sense as a consumer. Normal people book airline tickets with the most convenient routing and best price. But card-carrying frequent fliers don't. They think about the miles first. This irrational loyalty leads to all kinds of stupidity, like the end-of-year mileage runs designed to help them achieve "elite" status. By the way, they also spend a boatload of their employers' money on overpriced flights. Someone needs to look into that.

Mileage runs stupid - can't argue that one. Some people like to do it, and some don't. Just like any other vocation (or avocation). And everyone has a different view on the value proposition of a mileage run.

Flying indirect follows the same thought process. In fact, there can be more that feeds into the decision of an indirect than just merely more miles. Sometimes it really is cheaper, sometimes the reliability of that indirect is better than the direct, or sometimes it results in better timing (irrespective of whether that means more or less time in the air, or arriving earlier or later). For those that merely fly indirect for the miles, again, another value consideration. Is it not normal? Maybe not.

I don't know about most people here, but I'm sure when most of us travel on the company dollar (unless it is our company so literally our dollar), we are responsible in routing and costing. We don't make overt scenarios or excuses just to chase more miles. I know some who force meeting times to obtain normally unobtainable flights or airlines (due to cost), but routing is much harder to forge in this manner. Could be a different thing in the USA. But generally overcharging the company for travel which is not necessarily productive is employee dishonesty; little connect back to frequent flyer programmes.

You get nothing in return — literally. Take a minute to review the terms and conditions of your frequent flier program. Buried in the fine print you'll find rules that say the airline can change the terms of its program for any reason, and it doesn't even have to tell you about them. But worst of all, the miles don't even belong to you. That's right: They're not even yours. An airline can, and sometimes does, arbitrarily confiscate your miles and expel you from its program. So you're working hard to earn something that doesn't belong to you. Come on. If that's not a scam, then what is?

Kind of funny. I suppose FFPs could do a "house clean" once in a while, close the programme, discharge all points, then reopen again with new conditions. Why don't they do that? (Well, in some cases there has been this, but more or less the new programme was similar to the old one, and most kept their points balances, so that doesn't count).

I had a look into my wallet and apart from my FFP cards, I just realised my credit cards, my drivers license, my university ID cards, my Medicare card... hell, it doesn't fit in my wallet, but let's include my passport... I just realised that all of those are actually not my property. I can use them in various ways, I can even use them to prove my identity, but none of those belong to me. Gee... that's a lot of scams I'm participating in!

FFPs are a one-sided affair, yes, and there are little to no legal protections over it, unlike, say, credit cards and the credit system behind them. So yes everyone who participates in the programme always takes on an inherent risk (perhaps a substantial one, or rather one with currently little probability but very high consequences). So far, for most part, I'd say most are doing OK. The risk is about the same as being hit by a bus, I'd say.

Oh, and the linked article to the underlined phrase was a cellist who had bought a seat for his cello every time he travelled, registered a FF account with Delta for the cello (that's right, a cello owned a FF account), and then was discovered years later and had both his and the cello's account cancelled. Harsh, but in a way, deserved.


In the end, being part of a FFP is definitely some sort of gamble, as someone else holds all the rules, and we're all just trying to play the game and get what we can out of it as the rules may change. That may qualify under the definition of a "scam"...

In case you're wondering, here's Chris's LinkedIn: Christopher Elliott ([email protected]) | LinkedIn

And here's his latest book released about a year ago: Scammed: How to Save Your Money and Find Better Service in a World of Schemes, Swindles, and Shady Deals: Christopher Elliott: 9781118108000: Amazon.com: Books

Again, I can't help feel that he's trying to appear as a hero who is leading a fight in a very confrontational matter rather than trying to be diplomatic. As if this is Hunger Games, we are the poor populace and The Capital represents all of the big businesses, who we must all rise up against, wage war and punish until there is not one single business man left - peace is no option, we have been oppressed long enough.
 
Yawn, what a boring and mostly senseless blog entry. I suspect someone here has bad self esteem issue because he's in the back of the bus while enduring to see some more successful alpha-males "sipping their mimosas" more up the front.
 
Meanwhile, folks across the planet continue to wonder with bemusement on why their neighbours are continually traveling, often in the pointy end across the globe, despite living what seems a very frugal lifestyle, with the Australian travellers eating a lot of Tacos or tomato based foods while feeding their pets "Select" pet food or getting nominated for RSPCA's donor of the year for foodstuffs!

bash-head.gif
 
Any FF program is going to benefit people wanting/needing to fly in the first place more than someone with a fear of flying.

1 thing I have learnt from this site is that SG and WP status is really only attainable if a) you have a job that requires travel that your employer pays for, or b) you can afford to spend a LOT on leisure travel.

I would disagree with the last bit. Because we're currently based on opposing sides of the planet we have a need to travel. However we both use cash more often than points... just like points you can be smart with cash based fares too. We might be the poorest WP's out there but I still flew past the 2400 mark.

markis10 may be on to something. I do plan to use the generous WP baggage allowance to move a few large boxes of Taco Seasoning up to BNE in a couple weeks. I could stash some in the J-lounge if anyone wanted some. Now that's the real scam.
 
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