I wonder how many people waste points due to lack of knowledge

Discussion in 'General Discussion | Miles/Points' started by robertw477, Jan 29, 2013.  |  Print Topic

  1. robertw477

    robertw477 Silver Member

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    My father told me today that the travel agent he called said his 155K Starwood points can save him $1000.00 on a cruise ticket. YIKES! :) That is .6/10th of a cent per point. I wonder how many people have no clue the correct way to use miles and points and when they finally do redeem end up cleaning out their accounts. In a way that makes the programs even more lucrative as when people finally accumulate a decent amount of points, they end up wasting them on a poor redemption. I tried to tell him the true value of Starwood points which I value at 2-5 cents each. The absolute worst case is 1.25 cents each standard transfers to airlines and getting standard economy domestic seats. Its like somebody telling you they did great spending 50K miles for a common standard coach ticket and thinking it was a hot deal.
     
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  2. FlyingBear
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    FlyingBear Silver Member

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    I think that's one part of the programs many omit when talking about profitability of these programs and why they tolerate some of abuses. Gary recently posted data from Starwood about the most expensive redemption and it was 860,000 points for 2 airline tickets. Meanwhile, half of that would've gotten them a week at some fancy all-inclusive place.

    I think you got your conversions confused here. The price of the ticket is not necessarily fixed, so it's quite possible to get worse than 1.25 cents per point in this particular case.

    Depends. If I use your 1.25 cent benchmark, it is certainly possible to beat that and for occasions where there are no alternatives, the value judgement is a bit more complex than just the conversion rate.
     
  3. Food Wine and Miles

    Food Wine and Miles Silver Member

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    I'm guessing it's quite a lot. 50K redemptions for domestic tickets in economy because you don't know better and that was all that was available.

    I myself remember redeeming 100K for EWR-ATH in economy back in the days before I saw the light :oops:
     
  4. anabolism
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    anabolism Gold Member

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    Sure, but on the other hand, many people don't rack up enough points to redeem them for anything we'd consider a good value (e.g., international first class or a $400+/night hotel), so for them, any use is better than none.
     
  5. anabolism
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    anabolism Gold Member

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    What abuses are tolerated?
     
  6. FlyingBear
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    FlyingBear Silver Member

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    There are whole topics about those... Including on these forums. Some of these are short term, others are long tem.
     
  7. Jimgotkp
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    Jimgotkp Gold Member

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    I'm sure there are people who are knowledgeable of miles/points but use it on experiences that are otherwise priceless. Who knows if that person couldn't afford the cruise with cash but their significant other really wanted to go? Everyone has a different situation.

    For example, my parents really wanted to visit LAS since they never had the opportunity to do so. So, I got them 2 AS award tickets using 50K AA miles even though paid tickets were going for $200 per pax. It's definitely bad in terms of value but spending time with my parents after work and seeing them happy is priceless.
     
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  8. anabolism
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    anabolism Gold Member

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    OK, but I'm wondering what you're referring to. Or are you being coy and saying "this [poor redemption] value is why abuses are tolerated; go do a search for "abuse" and try to guess which of the many threads are the ones I'm talking about?"

    I have no idea if you're talking about buying/selling miles/upgrades, credit card churns, phony complaints, or what.
     
  9. anabolism
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    anabolism Gold Member

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    Just curious, since you are knowledgable, why didn't you just buy them the tickets for $400 and used your points for something worth much more?
     
  10. FlyingBear
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    FlyingBear Silver Member

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    Yes? All of the above? Etc.? I am sure what you are trying to extract here. I wasn't speaking code and winking in direction of some specific way of using the system in a way other than it was meant to be used.
     
  11. Jimgotkp
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    Jimgotkp Gold Member

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    Because I'm a poor college student?
     
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  12. anabolism
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    anabolism Gold Member

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    I was trying to get an idea of which abuses you feel are being tolerated, especially because of recipient's poor redemption values.

    For example, the costs of some abuses are borne by third parties who have nothing to do with redemption, while in other cases it may be the loyalty program itself.
     
  13. anabolism
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    anabolism Gold Member

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    An excellent reason :)
     
  14. FlyingBear
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    FlyingBear Silver Member

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    I think you are trying too hard here. As already mentioned, I wasn't talking about a specific method.

    Don't worry, you'll get to 1000 posts shortly, even without hyper analysis of every post ;)
     
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  15. anabolism
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    anabolism Gold Member

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    Cute, but I tend to try and fully understand people's points anyway. It's in my nature to try and analyze everything :)
     
  16. skyvan

    skyvan Gold Member

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    This undervaluation is perpetuated by the ease of redemption. Something like using Amex MR for Amazon purchases at a disgusting rate is simple. Looking for low availability on Delta's search engine is less so for example. Many people don't realize the value because they don't want to out in the time.
     
  17. AJTrenkle

    AJTrenkle Active Member

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    The problem I think is that people don't fully understand all the nuances of the various airline programs. I think when you try and understand transfers from credit card programs (Starwood I would include in this with the co-branded card and their many transfer partners) to all the possible airlines, and when you recognize most folks are fine with coach travel, and when you further emphasize that a lot of times there are fuel surcharges and/or limited availability for families; most people just give up and want something more straightforward like cash back or shopping.

    Plus I think most of the folks on here value travel, especially international travel. Not everyone does and would rather by some new speakers and such.

    I have to say, I really do wonder if a good cash back program like Chase or US Bank or something, where cash can be invested or used for anything else isn't actually the best way of doing things.
     
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  18. Sweet Willie
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    Sweet Willie Gold Member

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    I'd like to believe I know better and IMO, Two 25k awards to the right domestic destination or w/certain timing can be quite a nice redemption. Like PSP in high season.

    I do understand your point, those that don't know any better will probably redeem to a destination that has very low fare usually.
    I'm guessing there are savvy folks who would agree.
     
  19. Deal2020

    Deal2020 Silver Member

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    I like to use my miles for Canada and Continental US long haul flights. That can gives me up to 2 cents/mile.
     
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  20. Deal2020

    Deal2020 Silver Member

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    Using miles for some international flights such as to Australia or Thailand also generates high return but I do not have that amount of required miles.
     
  21. Food Wine and Miles

    Food Wine and Miles Silver Member

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    Yeah - I've redeemed 25k (or 20k) sometimes for short-hops to Canada (prior to changes in Avios making them a real steal for short-hops) and felt really happy with those redemptions vs. the $ price available at the time.

    Was more referring to 50k / ticket trips to Disneyworld and the like.
     
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  22. miles and smiles
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    miles and smiles Gold Member

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    For me, the most important valuation isn't in how many points/miles it costs to me to get from a to b, but in my own satisfaction with each redemption, each trip. For some people one free trip might be a once in a lifetime experience that they will cherish for decades. For some other folk each trip is not valuable unless their calculator tells them so.
    Personally I like to balance the two approaches, and realize that I will remember the trip long, long after I have forgotten how much it cost me in dollars, miles or points.
     
  23. TravelScrounger

    TravelScrounger Active Member

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    I talk to many people who are willing to use all their miles/points for a single trip, regardless of what it "should" cost. They see flights that look OK and cost 100K, so they book. If they looked a little deeper, they could have gotten better flights for 50K. The mindset is that they have the miles so why not use them. They don't think about a possible "next trip".

    What boggles me is that these same people do not think about cash the same way. They wouldn't walk into 7-11 shopping for gum with a hundred dollar bill and be willing to pay the entire $100. Maybe Vegas works the same way with chips?
     
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  24. willski

    willski Active Member

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    I'll admit I didn't even sign up for hotel reward programs for a few years because I was lazy..

    *..shame..*
     
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  25. kenbo
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    kenbo Silver Member

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    I try to help my family steer clear of bad redemptions but sometimes it really only comes down to one thing, and that is whether or not they want to incur any out of pocket expenses. For most of the world, cash is king. Points/miles are points/miles. For us travelers, it's the opposite.

    All we can really do is advise people on their options. If they're not concerned with saving their miles/points for a future trip and are more concerned with saving X dollars now, then more power to them. As long as they're getting what they want out of it, that's really all that matters (as much as it hurts us haha).
     

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