Frequent flier miles – many people get excited when they heard those words. How many of you have signed up for credit cards or shopped in certain places just to get an extra 500 to 1,000 points? A lot of you, right? But, did you know that even though you have bought and paid for these frequent flier miles, you can not sell these sections.
Surprising is not it? Well, it's even more surprising to find out that, while you can not sell your miles, your favorite airline has been doing just that. Sites like Points.com can purchase miles from you at significantly less than what you would be getting in a free market. And, a lot less than the amount of money that the airlines are making off of their frequent flier mile programs.
Confused? Then, let's get you some background on the subject. The frequent flier mile programs were first created as rewards for customer loyalty. These miles could be turned into discounts or credits for airplane tickets. But, soon this changed from just a customer loyalty program into a commodity that could be earned in different ways, including buying from a certain store or using a certain credit card.
Basically, you began to pay to get those loyalty miles. And, in turn, airlines began to make a profit off of these sales because of their relationships with the vendors. As the profits grow bigger than these sales, the airlines began to put more and more restrictions on how you could use your miles and when. The rise of the blackout periods took over.
So, consumers had a ton of miles that they could not use or were getting ready to expire. Now, with panic setting in, they decided to do the next best thing. Sell those miles, get some cash and finally get some benefit out of their divisions. Frequent flier brokers began popping up to service this segment of the market and help out the frequent flier in need.
Yet, the airline industry could not just leave this well enough alone. Fearing that this simple exchange of goods would threaten them, they be ignorant of their most precious commodity: the consumer. They would disable accounts or take away miles from anyone who dared to sell what was rightfully their.
The right to buy and sell frequent flier dies continues to be made on many grounds, including the courtroom (check out the Delta SkyMiles case from a few years back). There are proponents and opponents on both ends of the spectrum.