Thousand-Foot View of Air Miles
Many collectors are upset that their Air Miles are set to expire and choices for cashing them in are slim. Boomer and Echo’s open letter sums up the current situation well. Ellen Roseman has even started a petition calling on LoyaltyOne to help collectors save their Air Miles. Sadly, this conflict was quite predictable.
Air Miles resemble a currency. In many ways it’s as though LoyalyOne minted their own money, and they control the exchange rate of cashing in Miles for flights and other goods. Collectors of Air Miles got used to one exchange rate, but it was inevitable that as the Air Miles “money” supply grew, LoyaltyOne would have a growing incentive to tinker with expiration rules and change the exchange rate.
In some ways, this reminds me of when my son was young and held onto cheques, thinking they were as good as money. I had to explain that cheques sometimes bounce and that they expire after about 6 months. It’s best to deposit them as soon as possible. Similarly, collectors of points of any kind need to think about cashing in points when possible is avoid the inevitable devaluation or expiry.
Now, it may seem that I’m building up to saying that Air Miles collectors were foolish and deserve their fate. I’m not. I hope the petition effort succeeds in embarrassing LoyaltyOne into doing the right thing. The fact that the current battle was predictable, at least in broad terms, does not make it right.
The important thing for points collectors to understand is that this is not the first time this has happened and it’s likely to happen again. Take Aeroplan as an example. The number of miles needed to get free travel has risen over the years, miles began expiring, block-outs grew, and travelers began having to pay taxes and other fees when using miles.
Don’t get fooled again. The best plans give cash back immediately. Next best is cash back within a year. After that is any points plan where you know you can use the points within a year or so for something useful. It almost never makes sense to let points affect where you shop and what you buy. Above all, don’t collect any type of points for years expecting them to hold their value.
Air Miles resemble a currency. In many ways it’s as though LoyalyOne minted their own money, and they control the exchange rate of cashing in Miles for flights and other goods. Collectors of Air Miles got used to one exchange rate, but it was inevitable that as the Air Miles “money” supply grew, LoyaltyOne would have a growing incentive to tinker with expiration rules and change the exchange rate.
In some ways, this reminds me of when my son was young and held onto cheques, thinking they were as good as money. I had to explain that cheques sometimes bounce and that they expire after about 6 months. It’s best to deposit them as soon as possible. Similarly, collectors of points of any kind need to think about cashing in points when possible is avoid the inevitable devaluation or expiry.
Now, it may seem that I’m building up to saying that Air Miles collectors were foolish and deserve their fate. I’m not. I hope the petition effort succeeds in embarrassing LoyaltyOne into doing the right thing. The fact that the current battle was predictable, at least in broad terms, does not make it right.
The important thing for points collectors to understand is that this is not the first time this has happened and it’s likely to happen again. Take Aeroplan as an example. The number of miles needed to get free travel has risen over the years, miles began expiring, block-outs grew, and travelers began having to pay taxes and other fees when using miles.
Don’t get fooled again. The best plans give cash back immediately. Next best is cash back within a year. After that is any points plan where you know you can use the points within a year or so for something useful. It almost never makes sense to let points affect where you shop and what you buy. Above all, don’t collect any type of points for years expecting them to hold their value.
Sensible advice, I agree totally. It's PC points for groceries all the way for me :).
ReplyDelete@Greg: If the retailers associated with PC points suit you, then that's a good program. We tend to buy groceries elsewhere and use a different points program. But the key is to use up all the points frequently and not get locked into thinking we have to shop at particular stores.
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