How Gift Cards are Like Miles and Points — and Not in a Good Way
“T his week I changed two of my hotel reservations for my current travel in Europe from Club Carlson hotels, where I booked free nights using points, to paid stays in order to redeem hotel gift cards I received from Hilton Honors and Best Western Rewards.”
A very annoyed Ric Garrido of Loyalty Traveler continued in this article in which he won’t be fooled again by hotel gift cards — written while he is traveling in Lithuania — that “Both hotel stays refused my travel card credits.”
I would be annoyed as well.
How Gift Cards are Like Miles and Points — and Not in a Good Way
“I intend to stick with my credit cards which give me a percentage of cash back every time I use them, as I would much rather have cash than frequent travel loyalty program points or miles, which seem to lose value and have more restrictions placed on them every day”, I have stated more than once in past articles such as this one pertaining to credit card affiliate links and how I have never used them here at The Gate. “However, I can use cash any way I want. I like that.”
I may have “left money on the table” — so to speak — by not taking full advantage of credit cards affiliated with frequent travel loyalty programs as other people apparently have done; but I am fine with that decision. Although there are “bloggers” who will tell you how they profited significantly from the use of affiliate credit cards — and there is nothing wrong with that — there are also the pitfalls which are potentially included with that; and the opportunity cost may not be worthy of the savings…
…and keep in mind that the “bloggers” who espouse the benefits of “traveling the world for free”, they know how to manipulate the system — again, not that there is anything wrong with that, if the system permits it — in order to reap those substantial savings…
…but while the average reader may benefit from their advice, he or she is likely not nearly as savvy to reap similar benefits. In fact, he or she is more likely to experience the pitfalls, which may exceed any benefits gained overall.
Like miles and points, the company whose name appears on the face of the gift card can impose restrictions which erode the value of the savings you most likely procured on the gift card in the first place. Using the aforementioned experience of Ric Garrido — who is highly respected in terms of his knowledge and analysis of frequent guest loyalty programs and saving money on lodging — as an example:
Since this $10 Travel Card per stay is the promotion you have been running for six months, how about clearly stating in the promotion Terms and FAQ that the Best Western Travel Card is “only redeemable at check-in”.
The T&C and FAQ for the current Best Western Travel Card promotion does not mention anywhere that BW Travel Card is redeemable only at check-in.
Best Western Rewards members are only made aware of the “only redeemable at check-in” clause in the fine print on the email page with the Best Western Travel Card number.
Ric is by no means an ignorant idiot. While some people might scold him by saying “hey, you need to read all of the terms and conditions” and “you got what you deserved”, I believe that he exposed one of those annoying little hidden restrictions which could impede upon what should otherwise be the enjoyment of a trip with a modest discount. Combine that with the very real possibility that employees of the hotel companies have no idea about what to do when a guest presents a gift card for legitimate use, and you have a very frustrating experience which wastes time and eliminates the benefit of the discount earned with the gift card in the first place.
Are Miles and Points — and Gift Cards — Truly a Form of Currency?
I argue in this article that miles and points are more of a “branded currency” than a real currency:
Yes, you can delve into economic theories and financial equations — and if you sell goods, you can even discuss the intricacies of what is known as the weighted average cost of capital for your business — and money can be as complex as the theory of relativity…
…but when money is used in its basic form — as a currency — it is rather simple at its basic core: the product or service costs ten dollars; and you must spend ten dollars in order to own, use or enjoy that product or service. Money is accepted virtually everywhere — well…unless you refer to trying to use the lonely and arguably obsolete penny.
Miles and points are not quite that simple: they are limited in scope in most aspects: how to use them; where to use them; when to use them; and if you are really getting value out of them. You cannot walk into a fast food restaurant and offer to pay the cashier on the spot with American Airlines AAdvantage miles. You must use a recognized form of currency — such as money.
Not only should gift cards be added to that list of “branded currencies”; but their restrictions, terms and conditions can potentially render their use more nefarious than that of points or miles.
Consider this article I wrote pertaining to watching out for the five pitfalls of gift cards, as they can cost you serious money. There are many similarities to miles and points: gift cards are limited in terms of their use; they expire; and they can be used for fraudulent purposes. They can also suddenly lose all value if the company which backs them goes out of business.
Unlike miles and points in many cases is that gift cards are not issued or administered by the company itself which backs them; but rather by a third party — such as a bank, for example — which can tend to potentially complicate matters should a problem arise.
As with miles and points, companies need to be careful with the restrictions, terms and conditions of the gift cards issued with their names and logos on them — especially if they are hidden from view, intentionally or not — otherwise, people like Ric Garrido will vow never to be fooled by them again.
Why companies cannot simply conduct business in a transparent manner — regardless of whether or not it is considered legal — is beyond me. Conversely, companies absolutely need to protect themselves from customers who acquire and use miles, points and gift cards for purposes which were not originally intended by the issuers…
…but is the almighty dollar really so important that it can supersede the wants and needs of the very customer the company serves? Why not be more straightforward with regard to the restrictions, terms and conditions of the gift cards in order to reduce frustration amongst customers — and why not train all employees who are expected to interact with customers who hold these gift cards the proper policies and procedures to prevent what happened to Ric Garrido from happening again?
Ric Garrido of Loyalty Traveler attempted to use a couple of gift cards which were earned as a result of participating in this promotion from Best Western — but with great difficulty. Source: Best Western.