Originally Posted by
NJUPINTHEAIR
For whatever the reason, AMEX and Diners Club charge a transaction fee when converting their points into airline FF miles programs, whereas they do not for points to points conversions. I don't know why, although it could be something to do with taxes but this is just guess, as it also just as likely could be due to being a money center -- and conversion of points to ff miles is just so much more prevalent that they "tax" one and not the other.
As I said, I was aware of it, but like you don't know the intricacies of the reason.
I'm convinced it is most likley due to taxation ruling.
[If it is a profit centre question however, then rather than being an arbitrary choice based upon which is more prevalent I think it would be more likley they simply did one historically but not another, and they now can't backtrack on the freebie and don't want to surrender the income on the paid!]