Do Expiration Dates on Miles and Points Make Sense?
“H yatt is punishing me for my lack of past business, and is losing my future business as a result. And every year, it’s doing the same thing to thousands of other inactive Gold Passport members. Surely, that’s cutting off your nose to spite your face. Or, in a single word: stupid.”
…but will Hyatt Hotels Corporation miss a customer like Tim Winship, who apparently has not been staying at Hyatt Hotel properties recently? Is it good business to lose the occasional customer simply because of an expiration policy?
Unfortunately for Tim Winship, the current trend is that more frequent travel loyalty programs are either initiating or strengthening their policies pertaining to the expiration of miles and points. As two examples, consider that effective as of Monday, February 1, 2016, members of the Marriott Rewards frequent guest loyalty program who do not have qualifying activity in the prior 24 months will forfeit all accumulated Marriott Rewards points; and effective as of May of 2016, members of the IHG Rewards Club frequent guest loyalty program who do not have qualifying activity in the prior 12 months will forfeit all accumulated IHG Rewards Club points…
…and it is not just about redeemable miles and points. How would you like to find out one day that your lifetime miles have vanished, which is reportedly what happened recently to FlyerTalk member oenophilist?
I just tried to combine my US Airways Dividend Miles and AAdvantage accounts, as I did a ton of travel on US Airways in the past. The person said that because I hadn’t used US Airways in awhile, that my account was “dormant” and that I have lost all of my lifetime miles. This is ALOT of miles that I flew between 1993 and 2005. They said there is nothing they can do, yet I just checked my account merely 6 months ago and it wasn’t “dormant”. What is going on? Have I now lost all my mileage history from U.S. Airways? No one notified me that this would happen, and the AA Rep blamed US Airways.
Frequent travel loyalty program miles and points should not have expire — I first posted my opinion in this article on Friday, September 13, 2013 — and vouchers should not expire either.
Although they may not be as enticing as in the past, we see plenty of promotions in the travel industry, which are designed to increase business for a limited period of time. The companies within the travel industry change the promotions — typically on a quarterly basis throughout the year — in order to keep interest by their customers piqued. As one of many examples, registration for the latest iteration of the MegaBonus promotion from Marriott Rewards was just activated yesterday.
In the case of promotions, expiration dates are necessary to increase business for a limited period of time without devaluing the product or service being sold — especially when that product or service reverts back to full price. It causes customers to take advantage of opportunities to save money or receive bonuses which they may or may not ever see again — as well as use a “short cut” of sorts to earn something which would normally require more time, effort and money.
Companies which continuously run promotions instead of offering them occasionally eventually condition their customers into eventually expecting promotions, rather than treating them as special offers. After all, why pay full price for something you typically can either get at a discount or earn a bonus?
However, when a company repeatedly runs the same promotion over and over again, customers can tend to get bored where those consistently unchanged continuous promotions can potentially backfire — to the point of devaluing the product or service being offered, as the promotion becomes the norm instead of the exception. This had typically been the case with Choice Hotels; or the bonus of 100 percent upon purchasing US Airways Dividend Miles, as these are two examples which seemed to occur more often than not.
Frequent travel loyalty program miles and points — as well as cash vouchers which usually represent a form of compensation or the residual value of an original purchase — only become artificially perishable at the behest of airlines, lodging companies, rental car companies, airport parking companies and Internet travel agencies. Unlike promotions or truly perishable products, you have earned those frequent travel loyalty program miles and points. They should be yours to do as you will, when you want. You earned them.
There are items which are expected to expire: when you go shopping at a grocery store, you expect to purchase food products that are as fresh as possible. Purchasing a container of milk which has become a sort of ersatz cheese usually does not lead to the most palatable gastronomic experience — unless, of course, you enjoy sour lumpy milk. The expiration date printed on the container is absolutely necessary because it is supposed to protect you and I from purchasing old milk and other perishable products by informing us as to when they are expected to expire.
I get the argument that frequent travel loyalty program miles and points — as well as cash vouchers — can be considered liabilities on the “books” of companies which operate frequent travel loyalty programs; and that they can appear more profitable by initiating methods to purge them. I also understand that expiration policies are part of the contract to which you agreed when you signed up for the frequent travel loyalty program. That still does not render the fact that you earned those frequent travel loyalty program miles and points any less important, in my opinion.
There are people who argue that if you do not travel frequently enough — if you cannot participate in a simple activity to keep your miles or points “alive” — then you should not complain if you lose those miles or points. Yes, there are services which are designed to remind you of pending deadlines in your account — or perhaps a simple entry in your digital calendar with an alarm could be all you need to keep your miles and points from expiring…
…but the argument that it is called a “frequent flier” loyalty program went out the window with the apparent perception that partnerships with affiliated credit cards seem to be more valued than earning those miles or points with — as is often said by frequent fliers — your “butt in the seat” and physically flying as a passenger or sleeping in a hotel room.
Besides, life happens. At one point, I had been unable to use a certain amount of points I have in my frequent airport parking loyalty program account due to a major issue which has occurred in my personal life, for example — and those points expired as a result. A quick e-mail message to the proprietor thankfully restored those points and now I can use them for an upcoming trip next month when I park my car at the airport — but should those points have expired in the first place? I earned them by parking at that airport parking lot and paying for parking there. Why should they expire?
Battling with a company to restore what you already earned but lost can leave the customer with a negative perception of that company when they are unwilling to resolve the issue in your favor, which is supposedly what happened to Tim Winship. This is why companies will usually honor the requests of customers who ask to have their expired frequent travel loyalty programs restored — usually, but by no means always.
Some companies use the expiration of miles and points as a profit center of sorts instead of offering a goodwill gesture of restoring the miles or points free of charge — without even considering offering that goodwill gesture only once in a lifetime. Consider American Airlines, whose reactivation rates for expired AAdvantage miles are as follows:
- $200.00 for 1 – 50,000 expired miles
- $400.00 for 50,001 – 75,000 expired miles
- $600.00 for more than 75,000 expired miles
Although the value of each mile restored could be as little as 0.4 cents per mile — less if you lost hundreds of thousands of miles — that only depends on how many miles were in your account at the time they expired. Depending on how many miles you had when they expired, it may not be worth paying to reactivate them, as you may as well wait for a sale to purchase them if you really want to replenish your account. Do not look for any leniency, however — unless you have earned elite level status; and then you might be granted the possibility of having those miles or points restored at a discount or at no charge at all.
Delta Air Lines set an example for frequent flier loyalty programs when it was announced in February of 2011 that SkyMiles no longer expire, regardless of activity. While that does not particularly affect frequent fliers — whose constant activity usually keeps the frequent flier loyalty program miles from expiring, typically within 18 months — it is nice to know that there is one less thing about which to be concerned if something happens and frequent fliers temporarily need to stop traveling for a significant period of time. As for the perceived value of those SkyMiles — well, that is a discussion for a different time in a different article.
At least the expiration dates become extended with activity — unlike years ago when they expired no matter what you did. I was thankful for the opportunity to convert 30,000 of my United Airlines Mileage Plus — in the days when Mileage and Plus were separated by a space in the official name — frequent flier loyalty program miles into 120,000 Hilton HHonors frequent guest loyalty program points just before they were about to expire forever. In those days, frequent flier loyalty program miles basically expired three years after you earned them — and there was virtually no way to save them from expiring, so you were forced to use them.
Miles in the United Airlines MileagePlus and American Airlines AAdvantage frequent flier loyalty programs still expire after a period of inactivity — typically 18 months unless there is activity.
National Car Rental Emerald Club frequent car rental loyalty program points expire; and they must be used before the expiration date. I lost enough credits worth a total of four free days of renting a car even though I earned those credits. After an exchange of e-mail messages, National Car Rental had promised to restore them in my account — but they never did do so; and I had not been able to continue the exchange to fight for them for a variety of reasons.
By the way, this is not a “knock” against National Car Rental — even though I now rarely rent vehicles from that company. As a member of the Emerald Club frequent car rental loyalty program for years, I would personally recommend National Car Rental over its competition, as they have been good to me in the past; and I am reasonably certain that if I asked — which I eventually plan to do — they would possibly restore those credits…
…but should we have to go through the time and effort to restore what we have legitimately earned? I do not believe so. We all have better things to do with our time. Expiration dates belong on perishable products and limited-time promotions. Anything earned by you and I should not expire — end of story.
Please tell me where I am wrong here. Do you believe that frequent travel loyalty program miles and points — as well as vouchers — should be allowed to expire; or should they simply have no expiration date? I look forward to reading your comments. Thank you in advance.