David J. Danto
thoughts in my own, personal opinion
ddanto@IMCCA.org Follow Video &
Technology Industry News: @NJDavidD
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Time To Cut The Cards
The old expression goes “Fool
me once, shame on you – fool me twice, shame on me.” Never has that expression been more
appropriate than with the US airline industry as it exists today. The airlines promise benefits but deliver
them so rarely that the majority of frequent travelers never believe them
anyway. I’ve previously detailed how
tenuous the state of airline “loyalty” programs are, but now the time has
come to call out and rally against the shell game of frequent flyer miles.
look at this in the abstract. Say I open
a grocery store in your neighborhood. I
carry canned vegetables. They cost $10 a
can. I’ll give you a dime in my own
invented “Can Currency” every time you buy my products in my store. When you get to $10 in currency, you can get
a free can. It costs me a little money,
but it keeps you shopping in my store and increases your loyalty to my
business, boosting my bottom line.
That’s fair, accountable, and all makes sense. But then, let’s say I sell the store to a new
owner. That new owner pulls some tricky
of selling you the can for $10 worth of Can Currency the owner says that the
number of cans that will cost $10 in Can Currency are limited, and only
available at days and times of his choosing.
The rest of the time the cans will cost $20 in Can Currency. There is no governance or independent review
of how many actual $10 cans there are – it’s totally up to the whim of the
owner sells Can Currency to a local bank - for a fraction of a penny for each
dime’s worth – and the bank offers you a credit card that gives you more Can
Currency than you can get from shopping in the store.
of giving you Can Currency every time you shop in the store, the owner changes
his mind and now gives you a dime for every thousand dollars of real money you
spend in the store. If you happen to be
wealthy and spend tens of thousands of dollars in the store the owner gives you
Can Currency at a higher percentage than the average buyer.
changing again, instead of the unlimited cans that cost double the price of the
Can Currency, the owner now says he’ll vary the price of the cans according to
whatever he feels like, and won’t tell you what the price of the can is unless
you actually want one at a specific day and time.
any sane person play this shell game?
While the obvious answer is no, this is exactly what we’re doing with
the major US airlines. We let them
create their own currency, and let them devalue it on both ends. They increase the prices of what their
product will cost when you use their currency - whenever they feel like it,
they change the formula of giving you currency - whenever they feel like it,
and they limit the number redemptions to some hidden amount - completely at
their whim. It’s no better than a rigged
street con-game. The time has come to
admit that with this game “the only winning move is not
the latest announcement from United that
they’re changing the rules of their particular shell game, even after
playing for millions of miles worth, I’ve decided to quit the game. I’ve had enough. There are plenty of credit cards available
for use that pay you cash back instead of miles. Even in these uncertain times, the value of
US cash has quite a bit more governance than the value of frequent flyer
miles. I’m getting off the mileage
bandwagon. If you use these credit cards
- affiliated with any US airlines that are drastically devaluing their
“loyalty” programs - you should quit the shell game too. We can’t stop flying, but we can stop
rewarding the airlines by buying their currency.
sure which of the cash back cards I’m going to do the majority of my spending
on yet (I’ll be sure to let everyone know which one I pick) but for now, I’m happy to share the note I’m
sending to my bank about no longer using their co-branded card. Feel free to copy and use as well:
Sir or Madam,
financial services organization offers a co-branded credit card with [name of
airline] that I have used for years.
This is a note to let you know that I’m no longer going to continue
using that card. Your airline partner
has lost you a banking customer. The
reasons for this should be clear:
airline] touts benefits for cardholders that are often not provided /
honored. These include preferential
treatment, preferential pricing, club access, and similar perks. [The airline] reserves the right to change these
offerings as they desire, and I have tried to use one or more of them when they
weren’t honored by [the airline] breaking the spirit of the promise.
airline] continually devalues the buying power of their ‘frequent flyer miles”
at their whim. Recently, after
increasing the cost of mileage awards, [the airline] has announced they are not
even going to set a fixed amount of miles for most awards – they’ll
continuously change them, again at their whim.
airline] promises to offer lower cost redemption awards, but just about every
time I’ve tried to obtain one of those lower cost awards they were
airline] is subject to no external governance or independent monitoring of
these programs. It has continually
asserted its right (publically and in the courts) to make whatever changes it
feels like whenever it feels like. Only
a fool would see value in benefits and ‘mileage currency’ that this airline has
shown – and said – they won’t stand behind.
treat this as notice that I will no longer be using this card. Please inform [your partner airline] that it
is their fault that you have lost a customer today.
clearly now time to quit the shell game.
I hope enough of us frequent travelers realize this and act. Only by not playing the game will the banks
stop buying the miles and being the shills in the con-game, and hopefully as a
result, the airlines stop making us all the marks.
This article was written by David Danto and
contains solely his own, personal opinions.
All image and links provided above as reference under
prevailing fair use statutes.