FlyerTalk Forums - View Single Post - Swiss Knights Fondue and Cheese purchase for AA miles master thread.
Old Dec 3, 2006, 12:45 am
  #519  
rbessler
 
Join Date: Jul 2005
Posts: 885
Originally Posted by Landing Gear
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Alright, well, I just have two comments/clarifications I want to make:

1. I do not believe that anyone in this thread is abusing this system, and I also strongly believe that everyone here is due the miles for the cheese they bought (and I also believe everyone from here on forward is ethically due the miles, too, if the cheese contains the offer). Emmi made the offer, and they need to stand by it.

2. That being said, we're witnessing a company that clearly underestimated what they were doing, and is now trying to save itself. This promotion will undoubtedly cost them money, rather than make them money, which is why they'd go to the extraordinary step of effectively canceling the promotion. AAdvantage Marketing, if not Emmi, should have realized that they were effectively simply giving away money -- many people in this thread have gotten the cheese at prices that make the miles alone, let alone miles+cheese, worth more than the price of the cheese.

In economics terms, its riskless arbitrage -- buying these miles was a sure fire way to get free money, and in potentially unlimited amounts. Thats a recipe for trouble.

How would you the consumer be protected? First, you wouldn't be in the situation you are in now -- having to consider your legal and media options to try to force Emmi to give you these miles. AAdvantage should have forseen this. Second, and this promotion didn't quite reach this level, but when you have a way for people to effectively get free miles, all it does in the long run is just force American to raise redemption rates.

What is a "correctly-valued promotion?" Its one that is sustainable. Of course I'm not against the Citi AAdvantage card; Citi is making oodles of money off of us, and rewarding us with a small amount of miles. If I buy $100 worth of stuff on my credit card, I get 100 miles. Its at a level that makes the miles reward a bonus and not an objective -- I'm not going to charge a $1 on my credit card just for the mile bonus. With this promotion, if I spend $100, instead of a reward, I'm getting potentially 10,000 miles and $100 worth of cheese.

Thats insane. If there were perfect information, everyone on the planet that travels some should be buying this cheese. And if thats the case, then the value of our miles would fall even more. We need AAdvantage Marketing to look out for this sort of stuff.
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