Loyalty Hustle: US Airways tries to eke out a “preservation fee” from inactive frequent flyer accounts
Over at the Consumerist, they posted a reader complaint that US Airways was sending out letters to Dividend Miles members with inactive accounts, “encouraging” them to pay up $25 to keep their accounts alive.
Expiration dates are unfortunately nothing new for US Airways. I mentioned it a year ago, and other airlines have similar policies. Most of those airlines with an expiration policy give you a chance to reclaim the expired miles — for a fee, of course — and US Airways is no exception. Their policy has a scale, from $50 to revive up to 4,999 miles, up to $400 if you need to resuscitate 100,000 miles or more.
But what’s notable here is that the notices were seemingly sent to those whose miles had not yet reached the expiration date.
A couple e-mails, a click or two, and here we have the original text of a lucky mileholder’s US Airways expiration upsell:
Dear **NAME REDACTED**:
US Airways introduced a policy last year that rewards our customers for staying active in the Dividend Miles program. In order to keep your account active, you must earn or redeem miles within a consecutive 18-month period.
Our records indicate that you have been inactive since 06-13-2006. We want to make sure you keep the miles you’ve earned. To keep your account active and hang on to your miles, you have several options:
* Contact Dividend Miles at 800-428-4322 and pay a $25 preservation fee with your credit card.
* Earn miles by flying on US Airways or any of our airline partners.
* Sign up and earn miles with one of our credit or debit cards.
* Use any of our other partners for everyday activities such as dining out, sending flowers and more.
* Redeem your miles.
* Shop with over 100 premium retailers for name-brand merchandise at the
Dividend Miles Shopping Mall, where you can reactivate your account for as little as 99 cents.Take advantage of any of these options by 12-31-2007 and your account will remain active for another 18 months.
There are two ways to look at this. The optimist says that the airline is proactively warning its customers that they’re about to lose their miles, so that’s a good thing. And the $25 fee to keep miles alive is less than the $50 or more that it would cost after the fact.
The pessimist finds this “preservation fee” disturbing, and sees this as the first step toward an annual maintenance fee for loyalty accounts. But as the airline’s e-mail states, you don’t HAVE to pay money to the airline to stay in the miles game. You can reset the clock by earning or redeeming miles in any way. Redeem them if you can, or earn a few miles with something small if the balance is worth keeping alive.
So is the $25 preservation charge a great safety net or another twist of the screw? Personally, I think paying the money is rewarding bad behavior, and travelers should view this as another opportunity to re-evaluate their choice of airlines, or the utility of frequent flyer miles in their lives.


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October 18th, 2007 at 1:38 pm |
I disagree…just getting an email alone warning you of your miles expiration is definitely a GOOD thing in my book. I’ve been the victim of miles expiring without any notice at all. Even when I called to reactive my account, I was told it was too late.
To me the $25 fee is nominal. It costs US Airways and other airlines money to keep these accounts open. It’s a pure business decision, the more inactive accounts they can close, the more money they save on maintenance. Heck, my mutual fund charges me $12.50 a year as an account maintenance fee, but you never hear anyone complain about that.