Best New Sites for Using Miles
Pay with or donate airline miles via two startups.
I’m quite excited about two emerging programs: PointsPay and KulaCauses. First, PointsPay is another innovative solution by the same guys who introduced the first “slider” that enables frequent-flyer program members to mix miles and cash when redeeming awards.
Basically, PointsPay is a new mobile-based redemption solution that allows members of participating loyalty programs the opportunity to redeem their points and miles at 30 million point-of-sale (POS) terminals—almost any merchant or restaurant. I think it is groundbreaking. It solves what the loyalty industry has been looking for over the past couple of years—an easy way for members to spend their points—and is quite member friendly. You simply convert your miles or points to cash through the PointsPay app, and when you’re shopping online, you choose the cash currency and the points or miles currency you want to redeem.
The challenge will be that age-old issue for members who want to pick and choose the value their points and miles have when redeemed for travel and have that exchange equally into the real world of POS.
I’m not sure there’s enough value to satisfy all, but when it comes to flexibility of currency, maybe there will be something to the axiom that miles are just like money. You can check it out at pointspay.com.
Moving on to something just as groundbreaking but in a different model, Kula allows unredeemed loyalty points and frequent-flyer miles to be used for donations to millions of local and global charity causes. No longer will your choice of giving back be restricted to the choices of your current loyalty program (this should make it much easier to satisfy the demands of promoting charitable interests).
Do you like to donate to the local Save-the-Library effort or a scholarship fundraiser? Those may be among the choices you’ll have if this program can gain the traction it needs among the loyalty sector. It serves more than two million causes, based in five countries. You can learn more at kulacauses.com. Kula’s mission is to contribute more than $1 billion to annual charitable giving by 2015. It’s a lofty goal, but with so many unredeemed frequent-flyer miles out there, there’s a good chance it can reach it.
And there’s a unique twist this program has spent a lot of time on: Kula says that by private letter rulings, your donations through this program will be tax deductible. That question has been posed to me a hundred thousand times, and apparently, the secret sauce to tax deduction is that the miles and points are actually converted into a cash donation for your charities of choice. A good idea, and I’ll be watching Kula’s progress with interest.
Key Takeaway: Miles become currency when they can be used at point-of-sale terminals and are tax deductible.
Randy Petersen is widely regarded as the world’s leading expert on frequent-flyer programs. He founded FlyerTalk.com in 1998—the largest discussion forum on loyalty programs—and MilePoint.com in 2011. He is also publisher of Inside Flyer magazine. He holds more than a million miles in at least five airline and four hotel loyalty programs. He can be reached at email@example.com.