eBay auction: Envelope w/ 500,000 American Airlines Miles
Mar 28, 2002, 6:12 pm
#16
Join Date: Oct 1999
Location: Third planet from the Sun
Posts: 7,022
TechGirl: I have no problem letting AA police its own programs. But if someone decides to report any behaviour that they think crosses the line then I have a problem with it.
Where do you draw the line?
For the record, I have never bought or sold miles--I value them too much.
Where do you draw the line?
For the record, I have never bought or sold miles--I value them too much.
Mar 28, 2002, 6:50 pm
#17
Join Date: Sep 2001
Posts: 493
<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Tango:
TechGirl: I have no problem letting AA police its own programs. But if someone decides to report any behaviour that they think crosses the line then I have a problem with it.
Where do you draw the line?
For the record, I have never bought or sold miles--I value them too much.
</font>
TechGirl: I have no problem letting AA police its own programs. But if someone decides to report any behaviour that they think crosses the line then I have a problem with it.
Where do you draw the line?
For the record, I have never bought or sold miles--I value them too much.
</font>
I look at it as, if you can't sell the product in a store, you shouldn't try to sell it on an auction site...the reward doesn't seem worth the possible results to me...
Mar 28, 2002, 7:03 pm
#18
Suspended
Join Date: May 2000
Posts: 1,604
<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Tango:
Where do you draw the line?
</font>
Where do you draw the line?
</font>
You don't. AA does. Nothing to hide, nothing to worry about.
Mar 28, 2002, 7:43 pm
#20
Join Date: Sep 2000
Location: MCI. AA Plat, UA PrmEx., Mrrtt Gold, Hz Pres.Circle, HHonors Gold
Posts: 1,070
<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Steve M:
I find this hard to believe. Why would he be selling a plain envelope for $6600 with 500,000 free miles inside if he didn't know that the sales of miles was wrong?</font>
I find this hard to believe. Why would he be selling a plain envelope for $6600 with 500,000 free miles inside if he didn't know that the sales of miles was wrong?</font>
Mar 28, 2002, 8:13 pm
#21
Join Date: Aug 2000
Location: Seattle, WA
Programs: Alaska 100K - MM, defender of shoes on the carpeted bulkhead 4ever, AA LT PLT, Hyatt Glob, HH Dia
Posts: 7,447
I just went to ebay and looked at this. It seems that the reserve was met or maybe I just don't get it.
So, who ever buys this envelope (better be a nice one at that) gets mr.millionmiler to book their travel? Bo howdy, mr. millionmiler is busy and will he ever get time to patiently wait on the phone with the EXP desk to find award avail for all the awards people want.
If something this insane was ever to get through AA's radar, the seller could give themselves a headache booking little awards for the buyer over time. Sort of like cashing 500 dollars of travellers checks, 10 dollars at a time.
lala
So, who ever buys this envelope (better be a nice one at that) gets mr.millionmiler to book their travel? Bo howdy, mr. millionmiler is busy and will he ever get time to patiently wait on the phone with the EXP desk to find award avail for all the awards people want.
If something this insane was ever to get through AA's radar, the seller could give themselves a headache booking little awards for the buyer over time. Sort of like cashing 500 dollars of travellers checks, 10 dollars at a time.
lala
Mar 28, 2002, 8:39 pm
#22
Join Date: Oct 1999
Location: Third planet from the Sun
Posts: 7,022
All the buyer would need to do would be to request the full 500K in award certificates. Then the whole process is acedemic since the buyer would be the one making the award reservations and taking the certificates into a ticket office to get the ticket(s).
Question: If someone was selling 500K in blank Eggo certificates on E-bay, would you turn that person in? and if you answer yes, under what grounds?
Question: If someone was selling 500K in blank Eggo certificates on E-bay, would you turn that person in? and if you answer yes, under what grounds?
Mar 28, 2002, 8:59 pm
#23
Join Date: Jan 2000
Posts: 3,208
<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Tango:
TechGirl: I have no problem letting AA police its own programs. But if someone decides to report any behaviour that they think crosses the line then I have a problem with it.
Where do you draw the line?
For the record, I have never bought or sold miles--I value them too much.
</font>
TechGirl: I have no problem letting AA police its own programs. But if someone decides to report any behaviour that they think crosses the line then I have a problem with it.
Where do you draw the line?
For the record, I have never bought or sold miles--I value them too much.
</font>
Mar 29, 2002, 5:01 am
#24
Join Date: Sep 2000
Location: Boston, MA
Programs: AA Plat 5M
Posts: 327
I'd like to ask something I've always wondered about: Why exactly is it that the airlines don't want their miles bought and sold amongst the public? Why do they care?
RKDuke
RKDuke
Mar 29, 2002, 6:12 am
#25
Join Date: Feb 2002
Location: Sydney, New South Wales, AU
Posts: 301
RKDuke - I posted this in MilesBuzz - Sorry about the cross post, but it answers your question:
American Airlines can cancel your account for "breech of the terms of the program". BUT you COULD argue you did not breech the program rules as you gave away the miles. In a criminal case, you would lose (due to the wording of the statues) but in a civil case (in some jurisdictions) you may get away it.
Any court would understand that when you give away a mileage award ticket, there is always some consideration to the transaction. For example I give away a lot of flights (as I earn millions of point a year - credit card spending). Now if I give a first class flight to a cousin of mine worth say $10,000, I can almost be assured of (but not expect) a great birthday or thank you present (worth maybe $2000). Now am I selling the miles? The distinction is academic.
An important thing to note however is that while the airlines have to be seen to not promoting the sale of points they are quite happy to see it go on in some cases.
The airlines value points internally and only offer seats on flights that they believe are profitable.
For example, if a credit card company (or any other company) pays an airline 1c per mile and the airline charges 20,000 points for a LAX - LAS reward seat. The airline will only release that seat to an award booking IF the expected revenue from that seat is less than $200. Now I just purchased a return LAX - LAS flight on United for $120.00, you will find that it is actually more profitable for the airline to release this seat to a FF than to sell it for revenue. At the end of the day, the airlines are trying to maximize the $ they can get from customers and therefore a customer using 180,000 miles (which internally is actually worth $1800 to the airline) for a First Class SYD - LAX flight (on a flight where they can say with 95% level of confidence that they will not sell the seat) is better for them then getting $800 in revenue for an economy seat on the same flight and awarding 15,000 miles (at an internal cost of $150).
As a result they don’t mind leisure travellers who would otherwise travel in economy using the points of others (even if they pay for them) as they can actually increase revenue from this activity BUT what they do mind is if a person who would pay $10,000 for a First Class seat SYD - LAX buys the miles from someone. Thus if they try to "outlaw" the process they can then turn a blind eye to the people selling tickets to "normally economy flyers" while discouraging the "normally first class" flyers from responding to ads in newspapers offering First Class for half price.
Airlines are starting to think like this and as note that people will pay “agents” 2.5c per mile, while the airline only values the miles @ 1c. Thus again in order to maximise revenue the airlines started selling points to the public at 2.5c each! Externally this seems quite hypocritical but it is all about maximising the revenue for the airline.
It all makes sense once you stop looking at points as a liability and start looking at them as a revenue source. Another tangent is with the bonus miles offered for flying. Currently if an airlines loads drop on a segment that normally costs $1000, they can offer the seats for $800 to increase loads OR they can offer 20,000 bonus miles, which is effectively like giving you a $200 voucher to use on future airline travel. If they offer the miles, they are assured at least that the $200 in future revenue will come to them and as an added bonus the consumer will value the 20,000 at the retail price of 2.5c per mile ($500) so that the promotion will have the effect of dropping the price to $500 (ie the competition will need to decrease prices to $500 in order to get the business). At the end of the day, airlines are smart and they know what they are doing.
American Airlines can cancel your account for "breech of the terms of the program". BUT you COULD argue you did not breech the program rules as you gave away the miles. In a criminal case, you would lose (due to the wording of the statues) but in a civil case (in some jurisdictions) you may get away it.
Any court would understand that when you give away a mileage award ticket, there is always some consideration to the transaction. For example I give away a lot of flights (as I earn millions of point a year - credit card spending). Now if I give a first class flight to a cousin of mine worth say $10,000, I can almost be assured of (but not expect) a great birthday or thank you present (worth maybe $2000). Now am I selling the miles? The distinction is academic.
An important thing to note however is that while the airlines have to be seen to not promoting the sale of points they are quite happy to see it go on in some cases.
The airlines value points internally and only offer seats on flights that they believe are profitable.
For example, if a credit card company (or any other company) pays an airline 1c per mile and the airline charges 20,000 points for a LAX - LAS reward seat. The airline will only release that seat to an award booking IF the expected revenue from that seat is less than $200. Now I just purchased a return LAX - LAS flight on United for $120.00, you will find that it is actually more profitable for the airline to release this seat to a FF than to sell it for revenue. At the end of the day, the airlines are trying to maximize the $ they can get from customers and therefore a customer using 180,000 miles (which internally is actually worth $1800 to the airline) for a First Class SYD - LAX flight (on a flight where they can say with 95% level of confidence that they will not sell the seat) is better for them then getting $800 in revenue for an economy seat on the same flight and awarding 15,000 miles (at an internal cost of $150).
As a result they don’t mind leisure travellers who would otherwise travel in economy using the points of others (even if they pay for them) as they can actually increase revenue from this activity BUT what they do mind is if a person who would pay $10,000 for a First Class seat SYD - LAX buys the miles from someone. Thus if they try to "outlaw" the process they can then turn a blind eye to the people selling tickets to "normally economy flyers" while discouraging the "normally first class" flyers from responding to ads in newspapers offering First Class for half price.
Airlines are starting to think like this and as note that people will pay “agents” 2.5c per mile, while the airline only values the miles @ 1c. Thus again in order to maximise revenue the airlines started selling points to the public at 2.5c each! Externally this seems quite hypocritical but it is all about maximising the revenue for the airline.
It all makes sense once you stop looking at points as a liability and start looking at them as a revenue source. Another tangent is with the bonus miles offered for flying. Currently if an airlines loads drop on a segment that normally costs $1000, they can offer the seats for $800 to increase loads OR they can offer 20,000 bonus miles, which is effectively like giving you a $200 voucher to use on future airline travel. If they offer the miles, they are assured at least that the $200 in future revenue will come to them and as an added bonus the consumer will value the 20,000 at the retail price of 2.5c per mile ($500) so that the promotion will have the effect of dropping the price to $500 (ie the competition will need to decrease prices to $500 in order to get the business). At the end of the day, airlines are smart and they know what they are doing.
Mar 29, 2002, 6:55 am
#26
Join Date: Sep 2000
Location: Boston, MA
Programs: AA Plat 5M
Posts: 327
OzFLyer,
Thank yoo for your very informative post on the economics of FF miles. I never had any doubt as the fact the airlines know what they are doing. I just was curious as to the detailed specifics behind their policies. Your post makes it very clear that it is beneficial for the airlines to strive to make the award tickets available to some customers but not to others. Trying to limit the availability of one's product to a specific customer base is a tricky proposition in any business!
RKDuke
Thank yoo for your very informative post on the economics of FF miles. I never had any doubt as the fact the airlines know what they are doing. I just was curious as to the detailed specifics behind their policies. Your post makes it very clear that it is beneficial for the airlines to strive to make the award tickets available to some customers but not to others. Trying to limit the availability of one's product to a specific customer base is a tricky proposition in any business!
RKDuke
Mar 29, 2002, 7:05 am
#27
Join Date: Feb 2002
Location: EWR, IAH, LAX
Posts: 99
This auction is Cleary fake. Look at the statement, this guy is an elite, look at his miles flown and he is a million miler, but when I sign on to my aadvantage statement, there is a little button that I have and he doesn't - The BUY Upgrade button on the bottom of the statement, only elites have that options.
Look, like this:
AAdvantage Upgrade Activity
Date Transaction Description Purchased Mlg Exch Earned Other Total
PREVIOUS UPGRADE BALANCE 0 0 0 0 0
CURRENT UPGRADE BALANCE 0 0 0 0 0
* May exclude flights, awards and other eligible transactions processed within the last two
AADVANTAGE HOME | REQUEST UPGRADE | CLAIM AWARD | BUY UPGRADE
Privacy | Legal Information | Browser Compatibility
Employment Opportunities | Customer Service Plan
Copyright 2002 American Airlines, Inc. All Rights Reserved.
[This message has been edited by proudcoelite (edited 03-29-2002).]
Look, like this:
AAdvantage Upgrade Activity
Date Transaction Description Purchased Mlg Exch Earned Other Total
PREVIOUS UPGRADE BALANCE 0 0 0 0 0
CURRENT UPGRADE BALANCE 0 0 0 0 0
* May exclude flights, awards and other eligible transactions processed within the last two
AADVANTAGE HOME | REQUEST UPGRADE | CLAIM AWARD | BUY UPGRADE
Privacy | Legal Information | Browser Compatibility
Employment Opportunities | Customer Service Plan
Copyright 2002 American Airlines, Inc. All Rights Reserved.
[This message has been edited by proudcoelite (edited 03-29-2002).]
Mar 29, 2002, 8:05 am
#28
FlyerTalk Evangelist
Join Date: May 2000
Location: أمريكا
Posts: 26,763
<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Tango:
All the buyer would need to do would be to request the full 500K in award certificates. Then the whole process is acedemic since the buyer would be the one making the award reservations and taking the certificates into a ticket office to get the ticket(s).</font>
All the buyer would need to do would be to request the full 500K in award certificates. Then the whole process is acedemic since the buyer would be the one making the award reservations and taking the certificates into a ticket office to get the ticket(s).</font>
Besides, wouldn't you have to use all of those up within a year? Otherwise the account holder would end up having to request the reinstatement, not the certificate holder.
You're also taking on a lot of risk that the seller might get caught by AA before you can use up all of your miles. If you're cashing in 4 120k mile certificates for one trip in the near future, you might be ok; but if it takes you a year to use up all the certs, there's a good likelihood that you or this guy will get busted before you get the chance to use everything up. (This is always the case with large miles purchases, it's not directly speaking to Tango's suggestion.)
d
Mar 29, 2002, 3:20 pm
#29
Join Date: Apr 2001
Location: CT, USA
Posts: 180
<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by proudcoelite:
This auction is Cleary fake. Look at the statement, this guy is an elite, look at his miles flown and he is a million miler, but when I sign on to my aadvantage statement, there is a little button that I have and he doesn't - The BUY Upgrade button on the bottom of the statement, only elites have that options.</font>
This auction is Cleary fake. Look at the statement, this guy is an elite, look at his miles flown and he is a million miler, but when I sign on to my aadvantage statement, there is a little button that I have and he doesn't - The BUY Upgrade button on the bottom of the statement, only elites have that options.</font>
Mar 29, 2002, 3:27 pm
#30
Join Date: Feb 2002
Location: EWR, IAH, LAX
Posts: 99
Bingo
<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by AA since 85:
Where is the line that says what his milage is towards upgrades? He should be earning these credits too. He has in the past (has 42 earned). If he has 30K+ miles YTD, he is currently Gold. Should have that line too. So, he has the miles to be Gold, according to the statement, but not the right statement for a Gold. Something doesn't line up.
</font>
Where is the line that says what his milage is towards upgrades? He should be earning these credits too. He has in the past (has 42 earned). If he has 30K+ miles YTD, he is currently Gold. Should have that line too. So, he has the miles to be Gold, according to the statement, but not the right statement for a Gold. Something doesn't line up.
</font>