Originally Posted by
trini19
.... Meaning, if I use say 1000 miles to buy a camera from Camera Inc, how does Camera Inc get cash for that purchase from my united miles? ....
yes -- these are pre-negotiated deals via program broker where "cash" price received by the vendor is discounted off of the retail price.
One should the standard retail/amazon price divide by the mileage tends to be sub-1 cpm and as bad as 0.5 cpm. Rarely the best use of miles unless one has absolutely no other use.
Originally Posted by
trini19
.... On the same note, how does UA benefit by giving away miles for using a retailer? Meaning if I eat at a restaurant, why would UA give me miles for doing that which would eventually lead to a free ticket or free upgrade. Do the retailers pay UA a fee such that it covers the cost of the miles? ...
yes, indirectly -- the credit card companies, dining programs, ... are buying the miles from UA. The individual retailer pays a credit card provider or program provider a fee which includes the provider handling the mileage benefit. The individual provider rarely deals directly with United.