Originally Posted by Kimberley

2. Lack of transparency. Ponzi schemes are asking for money for a unique purpose (that is, something that you might not otherwise do). FF programs are mainly aimed at business people who might go for the cheapest tickets otherwise - they’re aimed at building brand loyalty. If a member doesn’t quite know what they’re getting, at least they know they’ll be getting something - at negligible cost, too, as they are ‘earning’ their rewards for doing something that they would be doing anyway. The real cost is the difference between the cheaper product they might purchase and the ‘loyal’ one that they do. This is not borne by the person who orders the ticket but by their company so it is passed on to us as consumers.

(The real lack of transparency is to do with who pays for these schemes. Take an example - a food company’s executives are members of an FF program, for the sake of which their expenses budget is say 10% higher than it would be if the competition were for the cheapest fares and not the best FF deals. How much of this extra cost is passed on to the consumers will depend upon the same economic forces as drive the rest of their business. But consumers will be paying for the same proportion of the extra cost associated with travel as they will be for extra advertising or machinery that goes into production. The difference is that for this extra cost, they will get nothing (advertising should drive up the company’s market share, so decrease prices, new machinery should reduce costs, so decrease prices...) With FF programs, the benefit goes to members (who are already high-earning executives) and to the airlines they support, but the cost is split and partly (perhaps mostly) borne by people who do not benefit at all.)