When Expiration Dates Do Not Make Sense — and Why

It is ludicrous for frequent travel loyalty program miles and points to expire, in my opinion — and vouchers should not expire either.

When Expiration Dates Do Not Make Sense — and Why

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.
Promotions are designed to increase business for a limited period of time. We see plenty of promotions in the travel industry. 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.
It is bad enough for companies who continuously run promotions, as they become expected by their customers. After all, why pay full price for something you can either get at a discount or earn a bonus?
However, when a company repeatedly runs the same promotion over and over again — such as is typically the case with Choice Hotels or the bonus of 100 percent when you purchase US Airways Dividend Miles, which seems to occur more often than not — customers can tend to get bored to the point 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.
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.
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 and airport parking companies. 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.
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.
Life happens. I have 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. 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.
A glance at this sampling of lengthy discussions posted on FlyerTalk illustrate the angst that FlyerTalk members can endure concerning expiring frequent travel loyalty program miles and points:

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.
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.
By the way, this is not a “knock” against National Car Rental. 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…

Summary

…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.

Graphic illustration ©2012 Brian Cohen.

8 thoughts on “When Expiration Dates Do Not Make Sense — and Why”

  1. jon0 says:

    You cannot be more wrong in your assertion that loyalty program points should not be allowed to expire.
    First of all, these programs are not called “frequent flyer” or “loyalty” programs for nothing. At the core, these programs are designed to skew purchasing decisions away from a purely price/product model to a longer term relationships based model. If you have no activity on your account in 18 months, you are probably either an infrequent traveler or one who is not loyal to the company running the program. In either case, though you can derive benefits from these programs, you are not the primary target for these loyalty programs.
    Let’s take a look at how these loyalty programs encourage repeat business to the airlines. Obviously, the granting of virtual “points” and “statuses” to travelers is a low-cost way for businesses to increase the overall perceived value of their products disproportionately compared to their upfront costs. If these virtual perks do not expire, there is much less incentive to remain loyal as your banked perks will continue to be there even if you were not. In fact, studies have shown that buying behavior is much better influenced by giving somebody a benefit then threatening to take them away, compared with simply offering similar benefits at the initial purchase. The fact that FlyerTalk members endure no small amount of angst to keep their points from expiring, even to the point of (gasp) purchasing additional products from the company, is clear antidotal proof that the points expiration policy is working for the companies.
    I also take issue with your argument that once you have earned the points, it should be yours to do with as you like for perpetuity. Firstly, we have not “earned” our loyalty points. Mileage runs and hours of hang-up-call-again compensation-seeking behavior notwithstanding, we have not labored for our points. Instead, these points and statuses are a benefit offered by these companies and are incidental to the primary objective of the business transaction — getting us from point A to B, the use of a car, or a hotel room. These points are benefits and rewarded from behavior, not earned from labor.
    Second, I find dubious the argument that you should be able to do as you wish to something once you have earned or acquired it. Let’s take your example of perishable milk. It is simply preposterous to argue that you should be able buy a jug of milk with a known expiration date, leave it in your fridge for an extra month, then drink it. Points have a defined expiration schedule based on award date or account activity, and if you let your points expire, that’s on you.
    Third, there’s the issue of designed expiration of the points or loyalty product. As consumers, we might think we would want the longest possible validity period. The airlines and other companies with loyalty programs would of course have to balance the benefits of an extended validity period with any costs associated with the change. It is the job of these companies to design products (of which loyalty programs is one) that appeal to their core target consumers and take into how this group weights the benefits of each feature compared to their associated costs. Let’s bring this back to the milk example. Did you know it is possible to buy milk that will last months and years without refrigeration? This would be UHT (and also powdered) milk. The Europeans and Asians drink it. Americans don’t like it because, frankly, it tastes like what I imagine another cow by-product more commonly used as organic fertilizer would taste like.
    You do make some good points about the reasons for limited time promotions and the need to keep non-expiring obligations from staying on a company’s liability sheets forever. With the amount of trouble airlines have had with lifetime pensions, it is no wonder some of them are now a little gun shy in offering “lifetime” non-expiring products. Personally, before I take aim at the travel industry for expiring points, I’d take issue with product/service organizations that sell you a “lifetime subscription” of something, then go and define “lifetime” as the manufacturer’s expected service life of a product.
    I am, of course, not advocating for a rigid points expiration policy that is counter to the goal of increasing customer loyalty. Front line customer service agents should have the authority to extend points validity periods, perhaps with a small challenge (or fee), to customers who proactively request an extension. As you yourself has shown, leaving customers with a good service experience and making them feel “special” can result in increased loyalty and even recommendations and referrals. And if you truly believed you have labored to “earn” these rewards, what’s another 5-10 minute phone call to the customer service center so you can “earn” an extension?

    1. Brian Cohen says:

      Your arguments are well thought out and reasoned, jon0 — and I appreciate you taking the time to post them. In fact, I would be inclined to agree with most of them had frequent travel loyalty programs not become significantly more complex in general over the years with ever-increasing rules and restrictions.
      As for the earning aspect, what if a bank decided that the paltry interest you have earned on your money expired after a year? Should that policy be considered by banks, or is that simply a bad analogy on my part?

  2. missydarlin says:

    the bank analogy doesn’t make sense.
    It is a *benefit* to the Bank to have you leave your money (including interest earned) sit stagnant in an account. Whereas to the airlines, stagnant miles are a liability.

  3. srk123 says:

    Unused miles may be a liability on their balance sheet, but if not used, the airline or hotel doesn’t have to provide the free flight or free room, and theoretically can sell that to another customer. The longer it goes unused, the more likely it is that it may linger out there and may never be used, or be used when it is even more devalued by the airline or the hotel. From that standpoint, I would think airlines and hotels would prefer the earned miles never be used.

  4. jon0 says:

    What if a bank decided that the paltry interest you have earned on your money expired after a year, you ask, It’s really simple to find the answer to the question — just look at what actually happens in real life when banks expire your funds after a certain amount of inactivity:
    In the US, after charging you regular inactivity fees that are magnitudes bigger than the interests they give you, your remaining inactive moneys eventually goes to the state. Checks, money orders, cashiers checks all expire after months of being issued. Gift cards and prepaid “credit” cards also expire, though they last much longer in the US after the change in laws a few years back.
    Earlier this year, in Australia, a law was passed that required the transfer of funds from inactive accounts to the government after 3 years of inactivity. Instead of going into an unclaimed funds account like in the US, these funds are transferred into the government’s general account, to be spent as the government sees fit.
    So what if a bank (or government) decides that your bank account expires? Your account expires, and life goes on. Those of us who cares enough to try to get their money back from their bank or government can sometimes succeed, and those of us who didn’t bother to ask looses their money.
    Yes, this is a “bad” analogy that happens to further proof my point.

  5. relangford says:

    Miles expiring are one thing, but vouchers are another. At least three times, I have had VDB and IDB vouchers expire because I could get away in the lifetime of the certificate.

  6. sdsearch says:

    It’s even worse when expirations are not well documented for the user. Choice Hotel points have a hard (unextendable) expiration, but at least you can log into your account see how many of your points will expire in which year. But WyndhamRewards, besides having a soft (extendable) expiration at 18 months, also has a hard expiration at 4 years, yet nowhere on the site can you tell how close to 4 years old any of your points are!
    At least in the case of most hotel programs that have hard expirations, if you know when those expirations are coming, you can transfer the about-to-expire hotel points to an airline. But in the case of car rental points or airline miles that have hard expirations, there typically isn’t such a way to “usefully use up” whatever you have that’s about to expire.
    And, by the way, while any expirations of airline miles are soft in the USA and the UK, in much of the rest of the world airline miles have hard expirations, which makes the miles completely useless for not-so-very-frequent travelers who accumulate them too slowly to build up to a redemption before they expire after a few years.

  7. rusrocket says:

    Expiring miles, in essence, benefit the loyal (frequent) customers at the expense of not so loyal (infrequent) customers which seems to be totally fare.
    In my opinion, businesses should be free to design their loyalty programs as they see fit. If you earned expirable miles that ended up expiring I see absolutely nothing wrong with it.

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