Originally Posted by JDiver
Other threads about these issues have existed before - some have strong feelings that they are / should be entitled to do anything they want with their miles / awards / VIPs etc. Others feel the ethical approach is much better, or are at least concerned their karma might run over their dogma. I guess it all depends on which direction your moral compass points to...
Yes...search Milesbuzz for some details award-selling threads. Some are about whether or not it should be allowed, some are about people who have been busted.
The reason AA can and will punish you without legal recourse is because FF miles have little legal standing. You are required to buy them in conjunction with your AA flights (under nearly all circumstances), but they are not property. They are not a contract for future services. They are not a marketable commodity. They...don't exist. So, you break AA's little rules and get busted, and the miles simply can vanish into thin air. They aren't yours. They never existed.
It's why it's different from, say, bananas. If I buy a banana for 50 cents from a grocer, he can say "You are not permitted to resell my bananas. You must eat them on Tuesdays, Wednesdays, or Saturdays. If you eat them on Monday, you owe me four thousand dollars." But I own the property - I can go resell the banana for a dollar, and he can't do anything about it.
To me, it's not an ethical choice. Airlines have a history of utilizing disinformation to their advantage. They play games with us; we play games with them. However, in the case of FF miles, we also
benefit by the fact that they have no legal standing: the last thing we want is for miles to become defined as property, because then the IRS becomes involved. As it is, the IRS position is just like the airlines: "FF miles don't really exist as property."