So I just participated in the webinar/call. Brad spent an hour going over the program and the way it works and what they actually do. After listening to him and getting to ask a few questions directly I have a MUCH better understanding of what is going on and I firmly believe that every transaction that they broker is legitimate within the eyes of the programs, at least as much as I can with only having read the T&C for a handful of the ~400 programs they have in their system.

Here's the catch - they do NOT allow the barter of reward travel. Period. No upgrades, travel certificates, reward tickets. Zip. Zilch. Nada. If you replace the word "reward" with "merchandise" in loyaltymatch's initial response you'll get a better feeling for that. And it just so happens that pretty much every program that has a merchandise redemption option allows for the bartering/trading of those products. So the program is legit.

One thing that was not particularly clear from the website but that was clarified in the call is that they only allow for the listing/trading of products in their catalog. You as a member cannot create an open-ended listing of any sort. This is how they limit the trading of items that are not supposed to be bartered/traded/sold.

There are two different types of transactions that the site offers. The first is for everyone, member or not, and is a straight link into the merchandise shopping portals. Since that stuff is available anyways, albeit without their pretty decent search facility, they don't charge for that.

The second transaction type is a barter/exchange deal. As a member I would note how many points I have in various programs. Should someone come along and decide that they want an iPod they could register for that product. The system knows that Bluestar Airlines has iPods available for 50K points and that I have 200K points in the program because I've registered that information with them. I would get an alert and would have the option of buying the iPod with my points and taking the cash that the buyer offers to me or taking some other merchandise that they might redeem using their points in another program. For that luxury there is a CDN$1.99 charge per transaction.

There is currently no guarantee that the people you are dealing with will actually deliver and if they don't the company is not involved in resolving the dispute. They are looking into offering some sort of 3rd party insurance but that will be a future option. They are also planning on implementing a feedback system to allow buyers/sellers to be rated for reliability, etc.

My takeaway from the call was that there was some confusion here about the way the program works and what a "reward" really is, and that is now clear in my mind. Based on that I think the program is legit. I don't think that it is a great value, as the redemption rates are on average no better than what are seen elsewhere, hovering around a penny/point for most programs. But the program isn't encouraging or even allowing transactions that would violate program T&Cs, at least from my read.