Regulating Program Miles Before They Expire
Travel loyalty programs have gotten plenty of bad press about how miles and points expire due to inactivity in a traveler's account. By my calculations, billions of miles have been lost this way over the years-and often the account holders had no idea that their miles were set to expire.
Recently, senator Charles Schumer (D-NY) urged the Department of Transportation (DOT) to regulate the frequent-flier programs of commercial airlines for the first time. He said that members of these programs do not receive sufficient notification of pending terminations of their frequent-flier accounts or of the miles they have accumulated. Instead, fliers have found that their accounts can be terminated and their miles cancelled or expired with seemingly little to no advance warning from an airline.
With all due respect to Senator Schumer, I agree and disagree. I have long railed against various programs that do a very poor job of notifying their members about mile and point status. Although I believe it is the member's responsibility to manage his miles and points, the programs sometimes fail to provide this information in a timely and accessible way-in fact, some fail so badly that I'd almost be happy for the government to pass legislation directed at just those carriers.
But I don't support the senator's desire to have the DOT draw up new rules to set limits on when miles can be rescinded and accounts closed. Where was the government in 1988, when the expiration of miles was introduced? For the record, fliers were also given a 20,000-mile coach award at that time, which was later raised to the current standard saver award of 25,000 miles. The average member of these programs has actually benefited from expiring miles, because without them, the standard coach saver award would likely stand at 40,000 miles-with more miles in play, devaluation can occur. With some 82 percent of domestic awards being redeemed at 25,000 miles, fliers are clearly still taking advantage of the current award level.
As for new rules for notification to members, I'm with the senator on that one: Programs should do a much better job of getting information about expiring miles and points to their members. Hopefully, with a little prodding, the programs themselves will make this improvement. Ordinarily, of course, I'd be in favor of new rules that support frequent fliers-but this problem ultimately lies with the member, who should pay attention and manage his programs. Government intervention is not the answer.