Travel Agent Booked Biz Class - turns out he used his points and took cash for himself

[RoMambai]

Not “preying “ on some unsophisticated individual who is unaware of the implications of their alternatives.

I'm not convinced these sellers are unsophisticated or unaware - you just have to read the rich discussions on the classifieds on ozbargain to see that. For many points sellers, particularly those on struggle street, who have slowly accumulated a small holding of say 36,000 points over the course of several years, $360 is much more valuable to them than potentially a return flight from MEL - PER which they would not necessarily take otherwise.

While this scenario will take a way a redemption out there for some poor chap, the $360 that it has generated could help pay for a child's next term fee. I might be a bleeding heart, but to me I know which is the lessser of the two evils.

 

[MEL_Traveller]

Many thanks for the replies...I think that Jack3193 picked up the intent of the point I was trying to make.....Some people buy points with the specific intent of making a profit by reselling points or re-allocating (after booking) potential reward seats that wouldn't necessarily be taken by normal redemption's..and this in turn surely reduces availability to people who abide by the points rules....family transfers are (in my opinion) specifically allowed by the airlines to allow families (and potentially non-commercial friends) to redeem rewards (be they tickets or goods)..I basically consider it a gross misuse of points to allow brokering of points..unless allowed by airlines (..although how airlines detect and stamp it out is beyond me...but they obviously know the major players as they are quite public about their intent???).....trust I'm not out of line here.

The bigger threat is the credit card sign-ups and all sorts of other deals sweetened by points. 100K for a new card. 110K just for switching health insurance. Together those bonuses equal 1 QF return business class to LA taken out of the system just there. And there must be hundreds of people just doing those two things alone.

And most people don't even need a broker. I'm guessing here but I don't suspect a broker is going to sell me a return first class ticket from Australia to Europe for AUD4400.

If people are collecting points through everyday purchases and shopping at woollies they're going to have a long and possibly fruitless wait to ever redeem premium awards, even if you took mileage brokers out of the system.

 

[Jack_OC]

Agree if perhaps you had 100 people each with a 1000 points that would otherwise have gone to a gift card, I suppose a points broker could make 100 transactions, buy all the orphan miles, and sell them as a single package available for an award. But that's a lot of work, and a lot of transactions for a single seat.

I'm not talking about 1000 points here or there. I know lots of people who quite frequently cash in tens of thousands at a time for gift cards, or use their points on economy awards between MEL and SYD, and so on. I have given up telling them how bad a use of points this is - they just don't listen. IMHO, the whole reason FF schemes are so profitable is that the vast majority of people waste their points like this.

To make it worthwhile I'm guessing someone might have 20, 30, 40, or 50k + they want to sell in a single transaction. Now points at that level could be used for family or friends just as easily as selling them to a broker.

Used in what way? Most people have never flown in business/first class, and it wouldn't even occur to them that it might be possible to do so. In any case, even balances of 100k+ aren't of much use if your aim is international J/F redemptions, especially if you have a partner/family travelling with you. If someone offers cash for points - e.g. 1c/pt - some people are going to take that rather than redeem for a gift card of lesser value.

Bartering/selling? I'd say it's not uncommon. Family member A might have points in velocity which they use to buy family member B an award on Singapore Airlines. Family member B returns the favour with a ticket on Qantas or Oneworld. Or Friend A has a stack of points on an airline and pays for the tickets while friend B buys the hotel at the destination and tickets to the game.

Outside of AFF types, I'd say any scenario like this is very uncommon.

 

[Jack_OC]

I must say I find myself agreeing with MEL_traveller. I do not believe these shoddy dealers are manufacturing significant additional demand that would not be there otherwise. In fact, and if I can channel Milton Friedman, they are possibly making the system more 'efficient' by connecting buyers and sellers and leading to less waste.

I'm afraid you are contradicting yourself here. "Waste" means points not redeemed at all or redeemed for something other than premium awards. I believe you are correct that the brokers reduce this waste, but that means more points are being diverted towards redemptions for premium awards instead of being wasted.

As I said before, I agree it's unlikely to be a significant problem (yet), but that doesn't mean it's having no detrimental effect.

 

[Jack_OC]

The bigger threat is the credit card sign-ups and all sorts of other deals sweetened by points. 100K for a new card. 110K just for switching health insurance. Together those bonuses equal 1 QF return business class to LA taken out of the system just there. And there must be hundreds of people just doing those two things alone.

That's true in theory, but in reality, the majority of people will never book a J rtn to LA, they will simply blow their points on items that are freely available, but poor value.

Conversely, if acquired by a broker, those same points will undoubtedly be redeemed for premium awards. That's why the brokers are a (potential) problem.

 

[RoMambai]

I suppose we'll have to respectfully agree to disagree. I think this is a small problem, relative to the airlines' continued flooding of points on to the market without corresponding increases in supply. These brokers absorb a tiny fraction of points out for a tidy arbitrage but I don't think it's leading to a major spike in demand for redemptions.

Where there is value there will always be opportunists to exploit it. We shouldn't sweat the small stuff.

 

[MEL_Traveller]

Used in what way? Most people have never flown in business/first class, and it wouldn't even occur to them that it might be possible to do so. In any case, even balances of 100k+ aren't of much use if your aim is international J/F redemptions, especially if you have a partner/family travelling with you. If someone offers cash for points - e.g. 1c/pt - some people are going to take that rather than redeem for a gift card of lesser value.

...

That's true in theory, but in reality, the majority of people will never book a J rtn to LA, they will simply blow their points on items that are freely available, but poor value.

So if most people don't have enough points for premium redemptions, and another bunch never consider premium, and another bunch more redeem for toasters. What's the problem? One or two people who have saved for years and can't get an award seat because a broker/person legitimately buying points/someone who's signed up with a credit card have taken the seats that are there?

At least two top tier airlines release large numbers of first class seats in the couple weeks before departure (CX and LH), and yet cabins can still go out empty or close to empty. Others release large numbers of seats outright - BA and TG to name a couple. And those seats remain available right through the booking period (look at BA transatlantic - masses of space every day on every flight). SQ and EK are also fairly easy to redeem. If mileage brokers were taking all the seats we wouldn't be seeing that type of availability.

 

[Jack_OC]

I suppose we'll have to respectfully agree to disagree. I think this is a small problem, relative to the airlines' continued flooding of points on to the market without corresponding increases in supply. These brokers absorb a tiny fraction of points out for a tidy arbitrage but I don't think it's leading to a major spike in demand for redemptions.

Where there is value there will always be opportunists to exploit it. We shouldn't sweat the small stuff.

We're not disagreeing about that. You have pretty much said exactly what I have said on this point - I have already said twice that I don't think it's having a significant detrimental effect (yet). However, that is not the same thing as no detrimental effect, which is what MEL_Traveller originally said. The reason this is (potentially) important is as follows: if there is a continual increase in the practice of selling points to brokers, that will ultimately make it harder for the rest of us to find premium redemptions.

Both yourself and MEL_Traveller have expressed concern about airlines flooding the market with points. It's odd that you don't recognise that this only becomes a problem if someone helps the masses use those points for premium awards. It makes no difference to anyone else when people get 100k points fro a credit card and then redeem for Myer gift vouchers, which is about the best use of points that most people are capable of finding.

So if most people don't have enough points for premium redemptions, and another bunch never consider premium, and another bunch more redeem for toasters. What's the problem? One or two people who have saved for years and can't get an award seat because a broker/person legitimately buying points/someone who's signed up with a credit card have taken the seats that are there?

My concern isn't the occasional person who have saved up for years - to be blunt I'm concerned for myself! Just to reiterate, the (potential) problem is that brokers will directly compete with me for the awards that I want, whereas the vast majority of the population will not. As such, I would strongly prefer if all of those points stayed in the hands of Joe Public, and per the T&Cs they are required to do so.

At least two top tier airlines release large numbers of first class seats in the couple weeks before departure (CX and LH), and yet cabins can still go out empty or close to empty. Others release large numbers of seats outright - BA and TG to name a couple. And those seats remain available right through the booking period (look at BA transatlantic - masses of space every day on every flight). SQ and EK are also fairly easy to redeem. If mileage brokers were taking all the seats we wouldn't be seeing that type of availability.

I'm guessing you don't have a lot of experience of trying to find 4 x J award seats on the same flights to the EU? I have managed to make this work so far, but just about, and there has only been one occasion (out of 6 or 7) when I managed to get award seats for all of us in both directions. Every other time I've had to pay for one person, despite having plenty of points. And that's despite searching every major airline as soon as they start to release seats. In other words, the current level of availability makes these trips just about doable - any reduction at all could be the straw that breaks the camel's back.

BTW, many people (myself included) can't wait until 2 weeks before departure to make holiday plans - both myself and my wife have to book leave and therefore lock in dates a long way in advance.

 

[MEL_Traveller]

It makes no difference to anyone else when people get 100k points fro a credit card and then redeem for Myer gift vouchers, which is about the best use of points that most people are capable of finding.

Except that the way the public finds out about these cards... either through blogs, bulletin boards, bank marketing, advertising from the airlines... most of the time those offers include suggestions to redeem those points, such as upgrades or premium travel. I've never seen an offer for 100K bonus points promoting a gift card for redemption.

So the general public probably has a reasonable idea that they can use this bunch of points for seats.

 

[Jack_OC]

Except that the way the public finds out about these cards... either through blogs, bulletin boards, bank marketing, advertising from the airlines... most of the time those offers include suggestions to redeem those points, such as upgrades or premium travel. I've never seen an offer for 100K bonus points promoting a gift card for redemption.

So the general public probably has a reasonable idea that they can use this bunch of points for seats.

IME most of the ads about bonus points refer to economy awards, which are (a) in plentiful supply and (b) a waste of points. Few cards offer enough bonus points for an international J award in the first place.

In any case, whatever the ads say, only a tiny percentage of the general population redeem points for premium awards in practice. I don't think I personally know anyone else who has done so. Most people are openly shocked if they hear we travel internationally in J, and they seem to find it hard to believe if I tell them how we manage it - as a result, at this stage I generally try not to tell anyone other than those who I know well. Even my boss, who has been P1 with QFF for years, and must earn an astonishing number of points, firmly believes that you can never redeem them for anything worthwhile other than domestic upgrades, and he still travels in Y when he takes his family on hols overseas. I think it's easy to fall into the trap of thinking that people on AFF are reasonably representative of the general population - but we're not!

This is the whole reason why points brokers are managing to turn this into a viable business - if the average punter had even a vague understanding of this game, the brokers' business model would be redundant.

 

[MEL_Traveller]

This is the whole reason why points brokers are managing to turn this into a viable business - if the average punter had even a vague understanding of this game, the brokers' business model would be redundant.

I agree with this. But I'm not sure the market is the same? People with points, and the US market I think is very mature in that respect, there's enough people 'in the know' to take the few seats that are available, regardless of the impact of points brokers. UA/AA/DL premium TATL and TPAC award space is snapped up as soon as booking windows open. That's not down to brokers, just folk with large number of points using them.

The Aussie market may not be that mature. But we are changing with the huge CC bonuses now in the market. 100K is more than enough for a J class one way east coast AU to West coast US.

Maybe there are different circles of points users. Many people at my office are now looking at premium awards, they don't see it as particularly daunting. Why the change? Perhaps one reason is that they've never had access to these huge numbers of 'free' points before.

 

[JohnK]

I'm not talking about 1000 points here or there. I know lots of people who quite frequently cash in tens of thousands at a time for gift cards, or use their points on economy awards between MEL and SYD, and so on. I have given up telling them how bad a use of points this is - they just don't listen. IMHO, the whole reason FF schemes are so profitable is that the vast majority of people waste their points like this.

I'm not sure I understand some of the logic that is used by people trying to justify that premium travel is the most beneficial way to redeem awards.

Is 8000 points + ~$38 not a good return for a $177 airfare? That's a net gain of ~$140 for 8000 points.

And assuming people don't plan travel to faraway places they don't need to go to but instead use 120,000 points + ~$500 for a business class return to Thailand. What value would you place on that award? Take note a peak economy airfare is ~$1100 return or off prak economy return of ~$600.

I can get ~$2100 value for 120,000 points (15 x one way SYD-BNE) used on domestic awards. That would make the 120,000 points used for business return to Thailand valued at $2600 including the ~$500 fuel surcharge.

Personally I don't think that's great value. The business class experience is certainly not worth $2600. And yes I do realise there could be some sweet spots where premium travel could make sense but not everyone needs to go to those places.

Domestic redemptions can also be good value.

 

[MEL_Traveller]

I'm not sure I understand some of the logic that is used by people trying to justify that premium travel is the most beneficial way to redeem awards.

Is 8000 points + ~$38 not a good return for a $177 airfare? That's a net gain of ~$140 for 8000 points.

And assuming people don't plan travel to faraway places they don't need to go to but instead use 120,000 points + ~$500 for a business class return to Thailand. What value would you place on that award? Take note a peak economy airfare is ~$1100 return or off prak economy return of ~$600.

I can get ~$2100 value for 120,000 points (15 x one way SYD-BNE) used on domestic awards. That would make the 120,000 points used for business return to Thailand valued at $2600 including the ~$500 fuel surcharge.

Personally I don't think that's great value. The business class experience is certainly not worth $2600. And yes I do realise there could be some sweet spots where premium travel could make sense but not everyone needs to go to those places.

Domestic redemptions can also be good value.

How many people need to do 15 x SYD-BNE? And out of their own pocket (as opposed to their employer paying).

How many people are happy to fly economy for 1 hour SYD-BNE, but would rather have the fun and excitement of 9 hours in business class on their holiday to Thailand rather than stuck in the back of the plane with no legroom and someone reclined to within 10 inches of their face?

The value of 'enjoyment' is hard to price. Everyone has different needs and puts a different value on it.

 

[JohnK]

The value of 'enjoyment' is hard to price. Everyone has different needs and puts a different value on it.

So the best value redemption is not always a premium award and those redeeming domestic awards do happen to know better?

 

[MEL_Traveller]

So the best value redemption is not always a premium award and those redeeming domestic awards do happen to know better?

Well... anyone needing to redeem 15 domestic tickets should be getting their employer to pay for the fares and saving the points for premium travel

I have actually redeemed for a domestic award last week. A 70 minute flight in the USA, non-stop, commanding a fare of AUD740 for economy. One way! I could have flown a connecting service taking 5+ hours for AUD250.But this was a case of a sweet 12k redemption.

 

[JohnK]

Well... anyone needing to redeem 15 domestic tickets should be getting their employer to pay for the fares and saving the points for premium travel

Why would employer pay for wife and daughter? They won't even pay my airfares.

And we're now getting way off topic for this thread.

 

[Ozfrequentmileageredeemer]

Hi all, wanted to ask... is this stuff legit or should I take the agent for a shakedown? We paid good price (cheap, not insanely cheap) for 2 biz class tickets AU to EU and back and when we went to SingAir to find out where the points are were told that the flights were booked using points.

It maybe legit for agent to book points via SQ Krisflyer for you. However the issue for you is:

-Did the agent tell you upfront that he is booking these flights for you using points?
-Did he give you the impression you are purchasing a 'paid ticket'
-Were you under the impression you can earn points from this flight
-Did the agent tell you that you CAN NOT earn points from this flight??

If the agent did NOT disclose any of the 4 points above, I would first ask him, why this wasn't disclosed to me, and if your not
happy with his response etc, make a complaint and case to Fair Trading....www.consumer.vic.gov.au/products-and-services

 

[Jack_OC]

I'm not sure I understand some of the logic that is used by people trying to justify that premium travel is the most beneficial way to redeem awards.

Is 8000 points + ~$38 not a good return for a $177 airfare? That's a net gain of ~$140 for 8000 points.

Yes it's ok value - your points are worth 1.75c each in that example. However, a J return from MEL-LHR, for example, costs 256,000 points and saves perhaps $7k compared to a revenue fare, which values the points at about 2.73c each. 2.73c is 56% more than 1.75c, so in purely objective financial terms, the J award to LHR is substantially better value than your example.

Clearly that's irrelevant if you don't want to travel to LHR, or if you're as happy to travel in Y as in J, but by the same token, a lot of people redeem for gift cards etc as they have no interest in flying anywhere.

FWIW, the value of long haul J rewards for me is even greater than the hard financial value. The reason is, in the absence of points redemptions, myself and my family simply would not be able to travel long haul in J at all, so the points are not just saving us money, they are enabling us to do something that we would not otherwise be able to do. The same is not true of domestic flights in Y. Anyway, each to their own, and I'm certainly not going to complain when others choose to use their points in ways that don't compete with me!

 

[Jack_OC]

Something interesting just happened to me. I recently travelled on a JQ flight (with Plus Bundle) but had not received QF points, so I submitted a missing points claim. Today, the flight appeared on my activity statement, but with zero points and SCs. I called up to query, but the agent said I'm not entitled to points or SCs as the flight was an award, booked with points. That is definitely not the case - as it happens, I booked directly with JQ and paid cash (and paid extra for the plus bundle), and to my knowledge it's not even possible to use QF points when booking directly with JQ.

I explained this and the agent said they will investigate .... but anyway the point of the story is that maybe the OP's flights were not actually booked using points after all! It would be interesting to know, if the OP is still around.

 

[pjm99au]

I booked directly with JQ and paid cash (and paid extra for the plus bundle), and to my knowledge it's not even possible to use QF points when booking directly with JQ.

It is possible to do a points plus pay booking on the JQ website. About half way through the booking process it asks you for a QF FF number. I almost got caught by this in a making a booking this week. It was only at the end where the slider came up that I realised what it was doing