Flyertalk Posting Legend Moderator: Credit Card Programs, American Express, Capital One, Chase, Citi, Diners Club, Eco Travel, Signatures
Join Date: Jun 2003
Location: Miami, Mpls & London
Programs: AA, IHG & Marriott Platinum; DL & HH Gold
Posts: 51,875
Who subsidizes transfer bonuses?
American Express, Diners Club, and various hotel chains periodically offer "bonus" miles for transferring points from their own programs to specific airline programs. Who initiates and bears the cost of these promotions?
For example, Diners Club Rewards points normally transfer 1:1 to British Airways, but May through August it will be 1:1.5. Does Citibank absorb the cost of these additional miles, or does BA sell miles to them at a discount during the promotion, or do the two firms share the cost? How does Citibank benefit and how does BA benefit?
I have ideas, but no hard information. Interested to read what others know or think and why.
dennis