My story isn't nearly as extreme, but I'm still pretty proud of it.
Three years ago, there was a LivingSocial deal with a headline to the effect of "$10,000 for one night in the SF Fairmont Penthouse Suite." In a moment of "who would buy this?!," I of course read the whole thing, and the offering was impressive -- it included monogrammed Tiffany table settings for 20 or something, and the suite had a helipad accessible via bookcase-door -- but nothing I'd ever spend my money on.
At the bottom of the blurb, LS mentioned an alternative offer -- "$2000 for a night in the Presidential Suite." In reading that, the last bullet point read "plus Fairmont Platinum Status for Life." Now that, I thought, might actually be a good deal.
Fairmont Platinum gives you a night free, 10 nights of suite upgrades, 10 nights of room upgrades, $100 in spa/dining certificates, and a few other things each year. I'm a young guy, so the math is fairly compelling when you add this up over a lifetime. So I redeemed the deal and posted the opportunity on the frequent flyer forums for Fairmont, where many of Fairmont's best customers lurk, and they quickly snapped up dozens of the deals, leading to Fairmont/LivingSocial putting a freeze on it.
Apparently the "for life" bit had been an error, and they meant "for one year." But now they had some of their best customers, people who often earned their Platinum status anyway, encouraging them to honor it. After taking a weekend to think it over, Fairmont decided to honor the deal, and I've been a Fairmont Plat ever since.
I used the actual night in the suite to throw a surprise engagement party, and it was pretty amazing. Since then, my wife and I have stayed in suites on the cheap in Sonoma, Boston, Chicago, Seattle, and we actually spent 5 nights in an oceanfront suite on Hawaii for $129/night (the AAA rate for the suite was $1200/night). And we get lots of nice perks along the way.
Like I said, it's no 4MM miles for $4000, but for doing next to no work, it'll be a nice perk that my family and I will hopefully take advantage of for decades to come.
Cool that Fairmont stuck with the erroneous promise. It would've been easy for them to say no and "well, sue us if you dare!" you, without any significant loss-of-sales effect on the bottom of their end-of-year Excel sheets. Implies some long-term thinking or just plain decency (which I wager are the same thing).
At the level of customer that the Fairmont deals with, losing any Platinum customer would be a major deal for them.
They also realize that one negative customer experience in their line of work gets retold over, and over, and over. Taunting customers with "go ahead, sue us!" would be a P/R disaster of even larger magnitude if it got public. Didn't we just see an HN discussion on how rage spreads faster than good news?
It was cheaper for them to honor the deal in the long run. Upgrades are one of the cheapest things hotels can give away, when you think about it.
And yet, many companies choose to act that way. The RIAA and MPAA companies come to mind, in particular. You might argue that they're just protecting their products from piracy, but when it comes to things like the blank CD-R tax and DRM keeping you from backing up your own files, they definitely are that bellicose in my opinion, and I think they've destroyed their goodwill.
That's a little different, though, as "unlimited flights in first class" is something that has lots of opportunities for abuse and it was only a matter of time before they 86'd it. It's harder to abuse something that has defined benefits, like 10 upgrades a year.
Meanwhile, for years, AA has offered lifetime Gold and Platinum frequent flyer status for those who have accumulated one and two million miles, respectively.
It used to be an unpublished thing, but as of recently AA started prominently displaying it as a benefit you can attain.
A few weeks ago I attended a party in that penthouse as part of Puppet Conf, which was held at the Fairmont. It is an incredible place, but the advertised rate of $15k/night made me quite certain that would be my only visit.
Unfortunately the "secret door" in the library was locked so it was not possible to take a look at the helipad.
$2k for lifetime membership to the Fairmont Platinum club is a good deal, nice one!
If it's only a dozen people or so, it's a pretty minor expense for them. The cost to the company is easily offset by the urban legends circulating among business travelers about knowing some guy that got free upgrades for life. That's a lot of persistent, viral PR for the quality of your customer service for very little outlay.
My favorite story of this sort happened a few years ago: The US has never been successful at getting the public to accept dollar coins. As a result, the dollar coins -- some with presidents on them, and some with Sacajawea depicted -- were sitting in the US Mint's warehouses. The Mint, in order to get rid of these coins, offered people the chance to (a) order them by mail, (b) have them delivered for free, and (c) pay for them on a credit card.
Some people (very cleverly) did the math, and ordered ridiculous numbers of dollar coins on their airline-affiliated credit cards. When the dollar coins would arrive, the buyers would take them back to their bank, depositing the money in their account.
In other words, these people were getting thousands of dollars' worth of frequent flyer miles each week, for absolutely free. The Mint found out about this when banks started sending them enormous numbers of dollar coins, unopened, for storage, and that a very small number of customers were ordering a very large number of dollar coins.
The full (and very entertaining) story was done by NPR's Planet Money podcast:
> Some people (very cleverly) did the math, and ordered ridiculous numbers of dollar coins on their airline-affiliated credit cards. When the dollar coins would arrive, the buyers would take them back to their bank, depositing the money in their account.
Effectively, this works around the usual restrictions on using credit cards for cash advances. Even if you just had a standard cash-back credit card (1-2% on purchases), you could make a huge reward without actually spending any money, and on top of that you'd be able to get a month's worth of cash advance up to your credit limit; you could make a significant amount on the float that way.
However, most credit cards have fine print that explicitly excludes the direct purchase of negotiable financial instruments, so they'd have every right to cancel the rewards and charge a cash-advance fee if they found out.
It was a PITA to get banks to accept large amounts of coins. I had a coworker that was doing this, but he had to keep switching banks -- most would let him do it once for free.
I actually find stories like these rather sad. People are wasting valuable time, money, fuel, etc. just to take money they haven't earned. To me, it's no different than Wall Street: a legal way of taking value from someone else in a negative-sum game. Just because something is legal, doesn't mean it's ethical.
You can still do this, but the mint imposed limits on the number of coins they'll sell you per week, effectively making this scheme not worth it anymore.
However, to me it is still the best way of getting all those bonus miles when you sign up for a new credit card, without actually spending any money.
The typical redemption estimate of a mile is 1 cent. Often $250 tickets are 25,000 miles, $500 tickets are 50,000 miles, etc. When you find a $1000 ticket for 25,000 use miles. I've seen $600 tickets for 125,000 miles. That's a bad use of miles.
Many credit cards give you about 1% bonus (points, miles, whatever) and miles cards give you a mile per dollar spent. 1% of a dollar is 1 cent. So this math makes sense.
He got 1000 miles for 2.50. If each mile is worth 1 cent, that's a 4x benefit. Great, but not amazing. He got a tax deduction too, so maybe it was a 5-6x benefit. Sounds like a bit of a hassle, but the other perks sound great.
Anyway, the article should say $15,000 worth of miles. The airline might sell them to you for $150,000 but that's why you should never buy miles unless there's a tiny gap in what you have/need for a flight. For example, United will sell you 50,000 miles for $1881.25 which you can then redeem for a ~$500 ticket and not earn miles on that flight.
Reaching a gold status for life is worth more than the miles alone. You pretty much always fly first class for free, and you get 2-5x miles on every flight. Also, all tickets effectively become like full fare tickets. Want to extend a trip by a few days? Just call the number and it will be taken care of.
He now has 4M miles, by taking advantage of the status.
American Airlines gold status (the lowest frequent flyer status level) is not actually that generous. It's basically priority boarding, a little bit of priority on the upgrade queue (if you want to pay for the upgrade with upgrade vouchers or cash), and that's about it. Lounge access doesn't even come until platinum, one level above gold, and then only on international flights.
I'm sure he makes lots of good things happen by paying for them with his copious of miles, but it's not from the gold status :)
Eh most elite status programs have been severely nerfed. AA doesn't do unlimited upgrades (like Continental and now United) except at the highest tier. (Upgrades are only mostly domestic AFAIK.) Gold level bonuses on miles are like 50%, and it depends which fare class. Lounge access on United only happens if you're Gold and going International.
They reduce or eliminate the fees for certain things like award booking, and same-day flight changes. Changing tickets still also depends on the fare class of the ticket. If you buy a low-end restricted fare, you'll pay heavily to change it. They aren't magically turning your tickets into full fares.
Depending on where you work, a great benefit of status is that you can expense economy tickets (Y/B fare) but have a near 100% chance of upgrading.
Personally, I would think you are using miles incorrectly if you're getting a 1 cent value for them. It depends on the airline, but 1.5+ cents per mile is a more reasonable value.
If you are flying intercontinental, to Alaska/Hawaii, or anything but economy the value can be much, much higher.
If you only fly economy flights within the continental US, you're probably paying peanuts for flying anyway.
$0.01/mi redemption is pretty bad. Save your miles for international flights where the redemption value is higher, especially for business and first class.
Right, there's an average around 1 cent (across all domestic and international travel) and you're suggesting that you should save them for when it's to your advantage. I agree.
Personally, I've never seen a flight where redemption matched the article at around $0.10/mi, e.g. a $5000 ticket for 50,000 miles. Let me know when you see one and I'll book a ticket and we can discuss this over coffee.
International first class flights can cost $15-20,000+. Granted you're probably not willing to spend that much so you may value it at less than face value but the actual redemption rate is way higher than 1 CPM.
This was the first (maybe only) Adam Sandler movie where I felt like his unique blend of quirky, quiet persona played very well in to the character. It's worth a watch.
This reminds me of a story: For a certain time in recent theory you were able to legally "print money":
A couple of years ago when Germany got the Euro currency there were put a few regulations in place for the banks. If you came to them with 100 Deutsch Marks in your hands (old currency) they had to convert the 100 Deutsch Marks to euro by using the ratio 1:1.95583. The banks had to round up if needed. So in theory you could give them 1 Pfennig ( = 1/100 of 1 Deutsch Mark) and demand that they exchange that to Euro. If you do the math 1 Pfennig ~= 0.5 Euro Cent. Since the banks had to round up you ended up with 1 Euro Cent. That is a 100% return of investment. Now in theory you would have to give your bank 50 million 1 Pfennig coins (separately) and you would have gotten back 100 million euro cents = 1 million euros. But you would have only invested only 0.5 million euros. And so on…
I am not sure if this is an urban legend. It was told to me when I was a kid.
The reference is to an episode of Seinfeld where the Kramer sub-plot is about bottle deposit returns. Kramer notices that he can get 10 cents instead of the usual 5 cents for a bottle deposit return if he can return it to Michigan. Newman says that it can't be done, he's crunched the numbers and you blow all of your profit by transporting the bottles (remember, Seinfeld is set in NYC). However, Newman (a postal worker) finds out there is an overflow mail truck that only happens on Mother's Day due to all the cards that are sent and that they can have the USPS essentially cover the transportation so he signs up to drive the truck. Of course nothing goes the way it's supposed to when the Elaine/Jerry plot merges with the Newman/Kramer plot and Kramer is forced to abandon the attempt mid-quest (after throwing Newman out of the postal truck) to recover JFK's golf clubs.
The picture is of Newman drinking a soda so he can get the deposit on it.
There's a somewhat similar actual occurrence. It turns out that retailers get something like 7 cents a can for soda bottles, but the way the deposit law is set up they only have to pay 5. I guess it's to encorage them to collect the cans. Anyway there's one store in Brooklyn that started offering 6 cents instead of the usual 5. Apparently there are lines around the block and people using the machines 24/7.
Around here (SF Bay Area, California) we pay the "deposit" but none of the stores (I'm aware of) actually buy cans and bottles back. I'm not sure how much the per can price is at the recycling places you have to take them to.
I was very surprised one time on vacation in Oregon when there was a can/bottle recycling machine right at the entrance of a grocery store. I walked back to it with an empty can from the car I had and fed the can into the machine. I was a little disappointed that all it gave me was a receipt to use toward my next purchase at that store. But if it was a store I went to regularly, it would totally make sense.
I live in Oregon and you can get cash from the store for that receipt. Some people (homeless, poor, frugal) collect bottles and cans from public trash bins for this exact purpose. Sometimes schools have fundraisers where you drop off bags of cans and then they take them in and get the cash value for them.
Yes, well... Funny story, but a slightly mentally unstable guy in Queensland insisted on paying for a bag of mushrooms at his local supermarket mushroom by mushroom. They disallowed it, so he left and entered the store 40 times.
The reason? The scales weren't terribly accurate and rounded down. Each mushroom came to 0.48 cents, which because they rounded down came to nothing. He got a bag of free mushrooms. And a lifetime ban from the store.
My friends and I got a few round trip plane tickets once. Wendy's had a deal where their largest drinks had coupons to cut off their sides. I think 60 coupons got you a one-way domestic ticket on AirTran and 120 got you round trip. We were kids so we went dumpster diving at a couple local restaurants, found hundreds and hundreds of cups, and walked away with 3 or 4 round trip tickets. Not nearly as amazing as 1.25 million air miles, but we were pretty proud of ourselves.
When I was a child, there was some promotion with general mills cereal and free airline tickets for children.
We had a basement full of a year's supply of cheerio's, because my parents calculated the amount of cereal they had to buy was still significantly cheaper than the ticket would have cost, at that point, for our yearly visit to the granparents in florida.
Sure. What I was getting at is that they don't care, they are using the name to sell things, not making a promise.
And they probably sort of deliver, I bet they put fiber and 'mouth feel' agents in it that make it have a lot less calories (there are some hand wavy arguments against food science products, but I bet for lots of people that slight risk is a good trade off for the calories).
I think this guy should apply to YCombinator. In particular, there's a question about the time where you have "hacked" the system, or something to that effect.
I met a retired guy during a trip in Peru who was travelling the world using airmiles acquired by signing up with free credit cards.
Credit card companies would offer a few hundred air miles when he signed up. He would then simply cancel the cards a month later. He said that often when he called to cancel cards, he would be offered additional air miles incentives to prevent him from cancelling. He would keep the card an additional month when that happened.
I've read about this before. My primary question, however, is wouldn't this put some big dings in your credit rating? The average age of accounts would go way down, the credit checks would go up, and your allowed debt to income ratio would be all over the place. Or does none of that happen?
That's very common. It's one of the first things travel hackers do when they get into it. Card signup bonuses are worth $500-1000 and generally require a minimum spend of $2000-5000. Not much effort for free money.
That's a great article. I find it really troubling how the insurance agencies responded. He may or may not be responsible for the criminal charges regarding fraud, but those should be considered separately from the contractual loopholes he legally exploited, since none of those allegations are required to have been true for his idea to work.
In some kind of strange coincidence I read about this exact story last night on Quora [1]. Perhaps someone else did too :)
Anyway this is a fantastic story of a man gaming the system. In the Quora thread I've linked to there are some other fantastic examples. Particularly the ATM bug! I'd heard of that one before but just in case you hadn't...
Cash points have a feature whereby if you don't take the dispensed cash within a time limit, they take the money back, and re-credit your account. However some affected ATMs did not count the cash on the way back in. Now the exploit should be obvious - take the majority of the cash carefully and allow the ATM to swallow the rest. The cash you've taken is yours and the money you were supposed to get goes back into your account. No doubt it would be easy to track down customer's who had been involved in this exploit, but it's a fun story nevertheless.
I programmed ATMs some 10 years ago, and the way they worked was that retracted cash would not be recycled, but stored and tagged with the withdrawing account, which would get credited only after a manual counting (or maybe immediately, but counted and confirmed afterwards)
They quickly banned buying coins and money after figuring this out, but the program still had many aspects which allowed quick multiplication of rewards, bonuses, etc. I also achieved 1mln miles using the Starwood card and just made it before my airline decided to no longer allow CC earned miles to count towards lifetime status.
Airports aren't cheap to run, and they take up an extraordinary amount of real-estate, something the municipality involved would surely like to benefit from in some capacity.
Not to mention the amount of noise and air pollution planes in general generate.
The tax is simply an offset to this.
The problem here is prices are not advertised tax-in.
"The problem here is prices are not advertised tax-in." - and this can be trivially fixed; it's just a matter of requiring truth in advertising.
In EU (I believe all of it, but maybe not all), the airline prices (as others) are always advertised tax-in. I mean, otherwise it's just a bait and switch - if you advertise "Go to London for 50 EUR", then you'd better have an offer that does exactly that.
Huh? All prices I see are priced 'tax included'. The breakdown is available to look at, but the core price - in my case, $720 - is what came up when searching/comparing. It was only after I purchased that I looked at the breakdown - $400/$320.
Someone was willing to cart my body and luggage 24 hours around the planet for $400. Amazing, really.
This is only a major issue if you fly a premium cabin out of the UK. Elsewhere the taxes are minimal.
In college I racked up 135k United miles through credit cards and then used them for a first class ticket to Thailand and Singapore after graduation. The taxes came out to less than $100.
The taxes really depend on the airport involves during the flight. On a recent return flight from Dusseldorf->London Heathrow->Dubai->Melbourne, on FF points, the tax was 1/3 cost of the full price tickets, (around 450EUR).
Airport taxes in US must be quite low, relatively.
It's that way in Canada. Both Aeroplan and AirMiles make you pay taxes and fees. Depending on which airports you cross that's probably $50-$75 a head each way.
This reminded me of the Hoover free flights promotion [1] in the UK back in 1992.
Hoover's UK division tried to clear excess stock by offering free air tickets for purchases of over £100. The promotion was so popular that Hoover was unable to supply the tickets to all the participants, resulting in years of legal actions.
Hoover UK eventually admitted that the exercise had cost it £50 million. Three executive directors were dismissed and the business was sold to an Italian company.
I've worked on a few loyalty programs of Forbes-500 type companies, and the short answer is yes, definitely.
I clearly remember one company actively monitoring points collection to identify outliers (i.e. people who went through the trash collecting barcodes for points, etc..) to ensure they weren't becoming unprofitable program members. If the person crossed that threshold, the program would take actions to slow down or limit their redemption (i.e. limit the number of points redemptions which one account can do in one 24 hour period, etc...). They usually wouldn't kick the person out of the program as that action had the potential to generate bad press, and it was usually relatively easy for the person to just sign up again using different information. Limits, on the other hand, actually limited or prevented the "abuse" activity without hurting the "good" program members.
BTW, my favorite part from the article:
David approached the local Salvation Army with an offer; if they gave him a bunch of volunteers to peel off all the bar codes on his pudding, he’d donate the pudding to them. But here’s the beautiful part, doing this counted as a considerable charitable donation, which let David claim just over $800 back in tax deductions at the end of they year.
I work with a guy who obsesses over air miles. This year he took his family to Europe for free (including hotels). So it is still doable, but it takes a lot of work. He has about 20 credit cards and is constantly cancelling and applying for new cards. I would argue that my coworker is probably spending way too much time and if you take into account opportunity costs it probably isn't worth it for him. But I suppose if he enjoys it and sees it as a hobby, why not?
I would say that a lot of the financial business does something similar; exploit a loophole to make a windfall[0]. The benefits your friend gets might or might not be worth the time, but my ideas about this are pretty much: you shouldn't take from the system more than you put in. A lot of people work to make this well oiled machine work the way it does; and if you don't do something productive, you're kinda just leeching off it.
I earned 1.25 million miles easily at http://hackthesystem.com using credit card bonus tricks. It'll last me maybe 5 years economy, 2.5 years business class --- but I fly every couple weeks.
The real benefit is the hotels, biz class, upgrades, amazon GCs, and more.
It's relevant. It's a major part of an engineer's job to impart efficiency gains to whatever he's working on. And miles per dollar is definitely a valid efficiency metrics.
They say that 1.25 million air miles allow him to travel free, implying he can do it forever. But, at 60,000 miles for a flight from the US to Asia, and a family of 4, you can burn through the miles in 2 years.
The article mentions that he keeps earning more miles by paying attention to every promotion out there, and has over 4 million now. I also wouldn't be going straight from US to Asia; I'd be hopping locations gradually for an extended vacation to get the most out of the miles.
There are still good deals available by using credit cards. My wife and I took several trips (and sent other people on trips) by using a British Airways Chase card and a Southwest card. We only had to fill out an application (no pudding cup peeling required). Nothing in comparison to this guy, but very doable.
When i was a teenager, there was a deal where if you bought a box of cheerios, you got a pass to any Cineplex Odeon theatre.
So for a few months, we would buy boxes of cheerios at walmart for <$3 and then go see a movie (~$8) and eat our cheerios out of the box in the theatre.
apparently, they tried.. :
"I became doubly worried when they failed to send me the miles on time ... saying they had no record of my order! This seems pretty incredible given that I mailed the package registered and someone on their end signed for the package... Thankfully, I made copies of everything, and took photographs just in case. When I sent them proof, they quickly sent me the miles."
So, he took advantage of a promotion in a way the manufacturer did not intend, lied to grocery store employees to explain why he was depriving hundreds of other customers of delicious pudding while concurrently ruining pudding as a treat for his children, and caused his wife to physically harm herself peeling product codes from plastic packaging which he then I guess sent to a single landfill? Just so he could travel for free? And we're lauding this accomplishment?
That's awfully negative. Lying to the store employees isn't important. The packaging would have gone to landfill anyway. The wife presumably benefited from the flights. Ruining pudding for kids hopefully means they ate less junk food afterwards. A promotion for a manufacturer is a cheap marketing trick, they'll be betting that the conversion rate is low, but it's their risk and it sounds like they delivered. It's a story of a man beating the system.
To me, hacking a device is quite different than hacking a promotion. When you hack a device, there's usually no victim. However, when you hack a commercial transaction, there typically is a victim because most transactions are zero-sum (or at least the transaction surplus is zero-sum).
It made me laugh too, and I got the sarc, but I think it's the last bit which really killed the karma... And we're lauding this accomplishment? Or maybe add a </sarc> next time just to make it clear for everyone :)
If it was indeed sarcasm then it was too subtle for HN. I mean if you had posted that on 4chan then it would be blatant sarcasm, but people on HN take themselves a little to seriously so it's a lot harder to tell.
Thank you for adding to the discussion. It's interesting to find out how empathetic people are toward corporations. There is apparently quite a bit of variance.
No, that's why it was at the Salvo's in the first place he was getting them to peel off the thing of value he bought, bar codes that give flyers miles.
They wouldn't need to believe he was buying it for just the pudding. They would need to believe that the donated pudding had a certain monetary value, that this guy then donated. And that value would be natural to assess against the cost of acquiring the pudding when the donation was made to someone for the benefit of the food..
That he could extract additional value through the work of removing the bar code does not implicitly reduce the value of the pudding itself.
It is not unusual for it to be possible to extract more value by splitting up a product and selling or taking advantage of parts separately. A lot of businesses are even built on buying lots and separating them to extract value as people are often willing to pay over the odds for a smaller part, or parts of the lots may have been undervalued (as clearly was the case here).
In the UK, any promotional 'tokens' like this have to have a monetary value on them - normally it's something like 0.0001p.
IANAL but perhaps this minute monetary value is the legal value (i.e. effectively nothing)?
Bar codes have no intrinsic value. The value is in the promotion. Think of it as a "reimbursement" not for the product, but for the activity of purchasing it.
i might be wrong but if it's a tax deduction, doesn't that just reduce his tax liability by some percentage of the $800, so more like 20-30% depending upon his tax bracket? That way the $800 is only worth maybe $200 - $300.. A tax credit would be a full dollar for dollar comparison.
Unfortunately, people like this are also the reason frequent flier programs have become heavily devalued over the past two decades.
While this isn't probably as egregious as manufactured spending for credit card points (to later be converted into airline miles), his family (and others like him) are taking free seats and upgrades from frequent fliers who have actually earned their miles from BIS (butt-in-seat) flying over the years. And they're not even generating any useful amount of revenue for the airline.
Same can be said of startups. There are people who get lucky off of an incredibly simple/clever concept that has little actual value (instagram?), while many other teams fail while toiling away on difficult problems that could be world-changing. It's not fair, but it happens, and often.
First of all, the fact that this promotion earned miles which could qualify for some type of frequent-flyer status (elite-qualifying miles, or EQMs, to use the jargon) was basically the dumbest thing ever. And EQMs these days are difficult to come by through means other than actually buying a ticket and getting on the plane; typically, only promotions which will actually earn money for the airline can earn EQMs, and even those will have strict caps on them (I have a US Airways club membership and credit card, for example, and IIRC I can't pick up more than about 15k EQMs/year from the combination of them).
That by itself gives a lot more flexibility in dealing with "abuse" of promotions, since non-qualifying miles are only useful to be redeemed for travel. And there are endless ways to cap that:
* Blackout dates to avoid too many "free" seats during peak paid-travel times of the year.
* Dynamic fare-bucket management, allowing the number of redeemable seats on any given flight to be adjusted up or down on the fly, along with confusing schedules for when the mileage-redeemable fare classes open for booking.
* Limiting availability of redeemable seats on alliance partners, making it impractical or impossible to plan longer itineraries as mileage awards.
* Fees for mileage redemption, ranging from simple processing fees up to things like British Airways' stupendous "fuel surcharge" (which can make a "free" business- or first-class ticket cost roughly as much actual cash as a fully-paid economy-class fare).
etc., etc.
And the trend now is toward revenue-based status programs, where qualifying for frequent-flyer status requires not just a minimum number of miles but also a certain minimum number of actual dollars spent, on that specific airline's flights. That eliminates the more lucrative type of mileage-run since low-cost but high-mileage itineraries no longer help with reaching status.
More generally, though, I think the airlines have moved toward no longer considering "frequent flyers" as important as they once did. Frequent business travelers are relevant, of course, but the strong preference is for the types of folks whose corporate travel department just pays the fare the airline asks for, rather than people who spend hours on travel-search sites trying to find the optimal combo of high mileage/low fare.
United, starting next year, has also added a minimum dollar amount to their status levels. Based on a quick perusal, it doesn't appear as if the dollar levels should affect most people who are buying tickets at more or less "normal" rates but it's a further protection against people gaming the system in any way.
Or look at Lufthansa's investment in its first-class terminal at FRA, and in the 747-8. They like other things about that plane, but they especially like the fact that it has room for more premium seats, and Lufthansa's image right now is that of Europe's premium airline.
Not sure whether AA can match that for the US -- especially depending on the merger -- but they seem to be heading in that direction, certainly.
Absolutely agreed there. There were plenty of people who warned AA about this abuse once the HC promotion (and subsequent Kellogg's promotions) were launched. At the very least they learned not to provide EQM (miles that qualify for status) in such promotions; now, it is only possible to earn up to 10k EQM in any given year on a $450/annual fee credit card. Even that only gets one 40% of the way to Gold.
Honestly not sure that anyone at AA thought this one through.
are taking free seats and upgrades from frequent fliers who have actually earned their miles from BIS
"actually earned"? For reals?
I really, honestly do not get the various negative posts about this. Promotions like this -- just like "earned" air miles -- are all a battle between providers and consumers to optimize their revenue and to minimize your benefit.
Providers offer deals to get you to buy products (like pudding), with every hope of paying out the absolute minimum in actual benefits. They optimize every aspect of such deals, generally, putting just enough exclusions and annoyances that the actual take is profitably low. If someone on the consumer end is optimizing as well, bully for them.
The difference between this, and say, free iTunes promotions on Pepsi bottles is that people like this (or people who purposely purchase re-loadable debit cards with credit cards with points, then withdraw the funds to pay their bills) take capacity from those who actually travel quite frequently and pay a significant sum to do so. When it is impossible to get a confirmed status seat with extra leg room, due to people who fly once or twice year gaming the system, it is exceptionally frustrating. Especially for those well over 6 foot tall who then are essentially required to upgrade to Business or First to find a seat they can fit into.
If there were significantly more inventory available (i.e. status gamers didn't dramatically impact ability to get exit row for disabled passengers who need to get up frequently, tall passengers, etc) these practices would probably be tolerable. As it currently exists, however, its yet another unneeded strain on the system. Hence the explanation below from a poster about severely limited programs and benefits.
It’s not the "promotions people" taking the seats, or forcing you to pay for an upgrade - it’s the Airlines.
They determine which seats get placed in their planes how far apart, and how those seats are allocated. They could easily allocate seats with extra legroom based on height, or make it universal should that be in line with their goals. Instead a little artificial scarcity, and people start buying upgrades.
And now they’ve found that adding promotions focuses their customers rage on other customers (and not the airlines). The whole setup is a win/win for the airlines - and I suspect promotions are here to stay.
The promo mentioned here was in the 90s and there have not been any of the "500 mile" coupon promotions for AA in years. They now cap any sort of promotional EQM (status miles) at 10k on a credit card that requires $40,000 a year in spending and a $495 annual fee to receive.
These promotions died specifically because of these long tail passengers.
Do you also blame people who keep the banknote they randomly find on the sidewalk for keeping it, or would you rather have them jailed outright? You must be a blast at parties.
Also, there are hundreds of thousands of people who earn their living by helping others "game" the US tax code, and they don't even feel guilty about it. Don't they have any conscience at all? I suppose you'd rather have them executed. I mean, who cares that it's actually legal.
Generally, I would hope most people would at least make a fair effort to find out who it belonged to. Certainly don't think they should be jailed for it, nor did I suggest these type of airline customers should be punished (criminally or otherwise).
This is predominantly the airline's fault and most blame should be placed on them. At least in this case some good came out of it - the food shelter received some (relatively) free pudding. In the case of the new trend in generating miles (manufactured spending for credit cards) there's an externality that impacts people who don't even travel. Credit card companies are required to determine which persons are using the cards solely to generate points for airline miles, to remove them from the programs and potentially cancel their cards. Drug and grovery stores are now required to have their workers fill out federal money laundering forms on these individuals who purchase large amounts of vanilla reloads or conduct suspicious money transfers. The costs of documenting and preventing these abuses are passed on to the end customers, whether or not they even care about airlines miles or even fly. If you use any major credit card company, you're subsidizing these operations.
If the manufactured spenders put 10% of the effort into productive work that they did into gaming credit card rewards systems, we (and they) would be a lot better off for it. Do they deserve to be punished for it, though? No. Still silly and thoughtless.
When it is impossible to get a confirmed status seat with extra leg room, due to people who fly once or twice year gaming the system, it is exceptionally frustrating.
That sounds so astonishingly entitled that I don't even know where to begin: If you have a problem with "people like this", complain to the airline or choose a different airline. In this case it is a bit bizarre in that you are demanding greater allowances than other patrons on the jet, and feel put out when "people like this" make it less likely you will get it for free. To feel resentment about this is not rational.
I should have worded that another way to make it clear that it isn't something with which -I- particularly struggle. I'm slightly over 6 feet and need to get up multiple times per flight to use the bathroom due to 6 gastrointestinal surgeries. That said, I am more than willing to give up exit row when I'm lucky enough to receive it to someone substantially taller or whom really needs it. The unfortunate thing is when someone who spends their days buying thousands of dollars of vanilla reloads at CVS, to manufacture spending on their credit card, takes a seat from a tall or disabled person who spends thousands a year traveling and legitimately needs that seat. These persons are often the most unwilling to accommodate other passengers on the plane and, frankly, strike me as more entitled.
Thankfully the Airlines are moving to a revenue based frequent flier model specifically to discourage this kind of behavior.
Check out FlyerTalk.com sometime and read the post histories of some of the manufactured spenders. They are some of the loudest at complaining about airline food, other passengers, not getting their upgrades to post, etc. These are people who pay pennies on the dollars (if that - see US Mint fiasco) for their tickets. They indirectly increase credit card fees for the rest of us and create a mountain of paperwork for cashiers and mangers at drug and grocery stores.
If other passengers are high on their priority list, I'm happy to admit I'm wrong and have misjudged the situation. I've not seen much evidence, either traveling or reading through FF sites/blogs, to suggest as much.
Three years ago, there was a LivingSocial deal with a headline to the effect of "$10,000 for one night in the SF Fairmont Penthouse Suite." In a moment of "who would buy this?!," I of course read the whole thing, and the offering was impressive -- it included monogrammed Tiffany table settings for 20 or something, and the suite had a helipad accessible via bookcase-door -- but nothing I'd ever spend my money on.
At the bottom of the blurb, LS mentioned an alternative offer -- "$2000 for a night in the Presidential Suite." In reading that, the last bullet point read "plus Fairmont Platinum Status for Life." Now that, I thought, might actually be a good deal.
Fairmont Platinum gives you a night free, 10 nights of suite upgrades, 10 nights of room upgrades, $100 in spa/dining certificates, and a few other things each year. I'm a young guy, so the math is fairly compelling when you add this up over a lifetime. So I redeemed the deal and posted the opportunity on the frequent flyer forums for Fairmont, where many of Fairmont's best customers lurk, and they quickly snapped up dozens of the deals, leading to Fairmont/LivingSocial putting a freeze on it.
Apparently the "for life" bit had been an error, and they meant "for one year." But now they had some of their best customers, people who often earned their Platinum status anyway, encouraging them to honor it. After taking a weekend to think it over, Fairmont decided to honor the deal, and I've been a Fairmont Plat ever since.
I used the actual night in the suite to throw a surprise engagement party, and it was pretty amazing. Since then, my wife and I have stayed in suites on the cheap in Sonoma, Boston, Chicago, Seattle, and we actually spent 5 nights in an oceanfront suite on Hawaii for $129/night (the AAA rate for the suite was $1200/night). And we get lots of nice perks along the way.
Like I said, it's no 4MM miles for $4000, but for doing next to no work, it'll be a nice perk that my family and I will hopefully take advantage of for decades to come.