Frequent flier miles are a real and powerful commodity. Not only can they be redeemed for free or discounted flights, but they can also be used at hotels, car rental agencies and even some stores and restaurants. Worldwide, travelers earn an estimated 650 billion frequent flier miles each year through ticket purchases and affiliate credit card programs [source: Phipps].
But what if your fraction of that 650 billion isn't enough? What if your airline requires 25,000 miles for a free ticket to Australia, and you only have 24,000? No worries, mate! It's easy and legal to purchase frequent flier miles directly from the airline for roughly 28 cents a mile. American Airlines sells as few as 1,000 miles for $27.50 and as many as 40,000 miles for $1,000 [source: American Airlines]. Delta has a 2,000-mile minimum and will sell a maximum of 60,000 miles to the same user in the same year [source: Delta].
And what if you have the opposite problem? What if you're sitting on thousands of frequent flier miles that you'll never use? All of the major airlines allow you to give your frequent flier miles to friends and family or transfer the miles to another account holder with the same airline. Some airlines even throw in bonus miles as a reward for transfers.
But what if you just want to trade in your airline miles for cash? You can't -- legally. The fine print of all major frequent flier membership agreements includes a clause that prohibits such transactions. That said, there are many online brokers who work in the miles-for-cash underworld, connecting mileage holders with buyers. Here's how it works:
- Mileage owners submit information about how many miles they carry with a specific frequent flyer program and how much money they want per mile (usually between 1 and 2 cents)
- Ticket buyers enter their travel requests and how many miles they're looking for.
- If the broker finds a buyer, he or she sends the buyer's information to the seller, who then purchases a ticket in the buyer's name, stipulating that the buyer is "family."
- The broker overnights a check to the buyer, minus his or her own fees. [source: Phipps]
In November 2009, a U.S. District Court judge in Washington, D.C., ruled against several such brokers in a civil suit brought by Alaska Airlines. The judge agreed with the prosecution's argument that unauthorized purchases robbed available seats from legitimate mileage holders and resulted in a "loss of goodwill" toward the airline [source: Winship].
Frequent flyers argue that they shouldn't have to resort to such shady dealings, since they've earned these miles and can use them as they please. Unfortunately, most membership agreements clearly stipulate that members don't "own" anything. Remember that the next time your accumulated mileage "expires."
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