Lawsuit: Does United Airlines Charge Different Redemption Rates Based on Account Balance?
A lawsuit filed in United States District Court for the District of New Jersey earlier this week by two members of the United Airlines MileagePlus frequent flier loyalty program alleges that the complainants were being charged different redemption rates for the same reward.
Robert Gordon and Melissa Chan have supposedly accused United Airlines of charging higher redemption rates of MileagePlus frequent flier loyalty program miles for members who simply have more miles in their accounts. Chan reportedly had 3,500 more MileagePlus frequent flier loyalty program miles in her account than Gordon and was allegedly required by United Airlines to redeem 3,750 more MileagePlus frequent flier loyalty program miles for an identical hotel reward than Gordon.
The hotel reward was supposedly for a stay of three days in a hotel in Japan. Gordon reportedly did not have enough MileagePlus frequent flier loyalty program miles to redeem for the award; Chan did.
Gordon claimed that he was informed by a representative of United Airlines that the airline uses an algorithm to determine the number of MileagePlus frequent flier loyalty program miles needed to redeem a reward, which supposedly results in customers who have more MileagePlus frequent flier loyalty program miles to pay a higher redemption rate than those customers with lower totals in their MileagePlus frequent flier loyalty program accounts. The majority of FlyerTalk members seem to be on the side of United Airlines in this case — and there could be a number of plausible reasons for what United Airlines is accused of allegedly doing by the co-plaintiffs in the lawsuit. FlyerTalk member Yavamosnoticed that the number of MileagePlus frequent flier loyalty program miles needed for a hotel night is actually less for those with higher elite status, which is considered an additional benefit. Perhaps that there was only one hotel room left at one rate and that the next hotel room was a higher rate for whatever reason, according to content posted by FlyerTalk member craz.
However, FlyerTalk member emanon256posted that “Just like all the times when Mrs. Emanon was offered a ToD for <$100 and I was offered a buy-up for >$400 on the same flight, same fare class, separate PNR. When I called, I was told the same thing, I was told their dynamic pricing maximizes revenue and makes offers based on what they believe people will pay. I didn’t sue, I didn’t even think about suing, I just took my business elsewhere.”
Although a spokesperson for United Airlines claims that the lawsuit is without merit both factually and legally, I am reminded of allegations launched against Delta Air Lines last year where the airline was accused of charging higher airfares to its SkyMiles frequent flier loyalty program members.
Have the frequent flier loyalty programs of airlines become suspect? Can they be trusted to ensure that you are receiving the best value? Have you experienced paying more money or redeeming more frequent flier loyalty program miles for travel than you should have been charged? Is it considered fraud for airlines to vary what they charge to members of their frequent flier loyalty programs — or is it within their rights to do so? Are the circumstances different when the varying rates are in favor of the customer? Is this lawsuit justified — or nothing more than frivolous at best? Is there more to this case than meets the eye?
What are your thoughts and experiences?