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Monday
Jan282008

One-sided loyalty programs

I have already posted a couple times (here and here), rather unfavorably, about the lack of consumer-friendly airline policies. This one will be no different.

This weekend, a couple of friends who will be getting married in the next month mentioned that they would appreciate frequent flyer miles as a gift. I have miles spread across a few airlines, but unfortunately not enough to redeem for a free ticket anytime soon. This couple loves to travel, and I'd rather contribute to a trip of their choice than give them their dream blender off of their gift registry. And, quite frankly, this seemed like a very affordable gift.

Upon logging into my Delta account, there was a mention of a $30 processing fee. I bristled slightly, but then kept moving along until I was confronted an additional fee -- $0.01 per mile. I was thinking of transferring 15,000 or 20,000 miles. The cost of transferring 15,000 Delta miles -- $180. I was surprised that Delta was asking me to essentially pay for a friend to use miles that I had already earned. For $220 and a little legwork, you can get a full domestic ticket, not just a fraction of one. Upon checking with United and American, I saw the same costs (with varied processing fees).

One of the airlines' best opportunities for connecting with their most committed customers is through their frequent flyer programs. And although the programs are in large part helping the airline sell more tickets, it does make me feel like more of an insider. Consumers have grown accustomed to the hurdles set up to protect the airlines (booking up to a year in advance, black out dates), but when loyalty programs become one-sided, the conversation with the consumer takes a turn for the worse.

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