Is a new frequent-flyer point exchange a great opportunity or a new ripoff?
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Several readers have written in, asking about Points.com’s newly-launched “Global Points Exchange,” which bills itself as a person-to-person frequent-flyer mile marketplace, letting you “trade the miles and points you have, for the miles and points you want.”
Questions are on the skeptical side — “Is this legitimate?” “Is this a ripoff?” “Is GPX legal?” — so let’s look under the hood.
For starters, yes, this is a legal service, despite the airlines’ rules against selling or bartering frequent flyer miles. Points.com has struck deals with each of the participating airlines, so this is an authorized setting for point exchange, not a back-alley deal or an eBay auction.
The principle is a good one: You’ve got miles in one airline’s account, and you want miles in another. So why not trade with someone who has what you want, and who wants what you’ve got to trade?
I’ll tell you why not: Fees!
GPX is plagued with outrageously high transaction costs, costing you as much to exchange your miles as you’d pay to buy those miles outright from the airline.
Is this any surprise? After all, it’s coming from Points.com, which has long converted miles between programs — with hefty devaluations along the way. And according to their latest financial guidance, people are falling for it. The company “transacted more than 10 billion miles and points” in 2007 alone.
The GPX program is currently in beta, and there aren’t a lot of offers on the bid or the ask. Only five airlines currently participate: Air Canada, Alaska, American, Frontier, and… (wait for it) Icelandair!
Fees vary tremendously depending on the airline, but none of them are small. The outgoing account determines the fee you pay. So exchanging 15,000 American AAdvantage miles into another airline currency will cost you $180.00, while exchanging 15,000 Air Canada Aeroplan miles will cost $300.00. PLUS the $6.95 processing fee (currently waived.) Extortionary.
No thanks, Points.com. Your GPX is DOA.
Related:
- The value of frequent flyer miles
- Reader mail: Can I transfer points from one airline to another?
- Travelocity soon to let you book travel using points and miles
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December 17th, 2007 at 5:13 pm |
If *ANYTHING* goes wrong do not expect points.com to help you. They’ve basically stolen miles from here and there by failing to complete swaps and their customer service does not respond to my email messages.
December 26th, 2007 at 6:31 pm |
I was looking at this site to exchange some points I have with American Airlines, thanks for the heads up about the fees and RRGG- thanks for the warning about the bad customer service. I’ll pass for now.
February 6th, 2008 at 2:58 pm |
There is a new website that we’ve created where you can reward yourself by turning loyalty points and miles into cash or shop for reward merchandise, services, entertainment or leisure activities. ( www.loyaltymatch.com ).
LoyaltyMatch.com is the first person-to-person global marketplace where you can get cash for the points and miles you’ve accumulated as a member of loyalty programs. You can then use the cash to get the flights you want, when you want.
Your first transaction is FREE. Give us a test drive. Every transaction is only $1.99 from there!
So, get to LoyaltyMatch.com as soon as you can, take a few minutes to register, then enjoy SHOPPING or TURNING YOUR POINTS AND MILES INTO CASH for FREE.
Have fun rewarding yourself!
David Howatson
Director, Business Development & Partnerships
PS: We’re always looking for ways to improve the customer experience. Your feedback on the website and our service sent to memberfeedback@loyaltymatch.com would be appreciated