Airlines care because it's easy to see that miles could be used to cannibalize paid ticket sales. You may wish to read the AA Participant Agreement:

https://www.orderaamiles.com/Partici...Electronic.pdf

Company will distribute AAdvantage� Miles without charge and only to qualified participants in Company’s Incentive Program only for the following purpose:

(i) Employee sales and/or job performance awards, recognition or incentives; (ii) Customer awards, recognition or incentives; or (iii) Donor awards, recognition or incentives for a monetary charitable contribution if Company is a nonprofit organization. In no event will Company distribute AAdvantage� Miles to Employees for use in Company’s business travel or for any purpose not specified in the preceding sentence. Furthermore, in no event will Company provide more than (i) 35,000 AAdvantage� Miles to an individual Employee, Customer or Donor during any 12-month period if Company is a U.S. entity month period if Company is a non-U.S. entity, unless an alternative mileage cap is agreed to by American.

i.e. The airlines make an effort to prevent doing exactly what the OP wants to do. @:-)

I imagine that the airlines also have a vested interest in keeping miles non-taxable. It's a lot easier to peg a taxable value to 100k miles transferred in a single transaction. On AA, you can redeem 100k miles for a RT first class domestic ticket or a 1-way Business class fare to Europe with no blackout dates, so that is easily and immediately worth thousands of dollars. In the eyes of the IRS, is this really that different from someone giving you a $1000 or $10,000 AA voucher? If it occurred on a wide scale, I'm sure the IRS would take notice.

On the other hand, if I collect 1000 points from 100 vendors, has any one of them given me anything of value? It would be hard to say that 1000 miles is equivalent to an AA voucher worth $10 or $100, even though the math scales that way.

LOL! Didn't even see the gaping hole until you pointed it out!

Hi njarecki,

You might want to reconsider paying your taxes to get miles.

Officialpayments charges a convenience fee of 2.35% (2.1% if you have a payment over 100K and use an Amex card). If you use an Amex SPG to earn Starwood points, you will get a 25% bonus when you convert. That works out to 2.35 cents/1.25 miles or 1.88 cents per mile. I personally was lucky enough to convert during the AA 35% conversion bonus promotion so it worked out for me to be 1.4 cents per mile.

That's a very good point.

"60,000 AAdvantage� Miles to an individual Employee, Customer or Donor during any 12-month period if Company is a non-U.S. entity"


Perhaps a series of of non-US companies would work then. Envision FTNewcoI, FTNewCoII, FTNEwcoIII, etc. That could get you a few hundred thousand miles pretty easily. I'd be more creative with the names of course.

Also, as was pointed out before, there are many mileage programs out there. Perhaps some of them are more lenient than the language that AA has above.

Also from the agreement mia quotes:

I fear you are overlooking an important element. This isn't just about the money. AA wants to see your business plan and they have outlined acceptable uses: Employee sales and/or job performance awards, recognition or incentives; Customer awards, recognition or incentives; or Donor awards, recognition or incentives for a monetary charitable contribution in addition to the 35,000/60,000 limits.

You can also use payusatax.com for a 1.95 percent fee, but no Amex.

And if you like *A miles, I think you can still get in on the 50 percent U.S. Air bonus, so a $100,000 tax payment on starwood amex would cost $2,100 and you would get 180k miles.

Where can I find this USAir 50% bonus for using payusatax.com?

The 50 bonus is not through payusatax. It's a current promo that USAir is running through July 31 for transfers of miles from partners, including hotel partners. You need to register. http://shopping.usairways.com/promot...c=dm_txt_00908

So, if you have a starwood amex, it would work like this:

1) Pay $100,000 using official payments (which drops you to 2.1 percent surcharge).

2) This will give you 100,000 starwood points, which convert at a rate of 1.25/1 to U.S. Air. With the 50 percent bonus that's 180k miles.

To make it work, you'd need to have your starwood amex statement close before July 31 so that the points will post to your account for the USAir promo.

Make sense?

I have been doing this for many years. The best way to do this most years has been non-repeated airline specific promotions. Examples that allowed one to buy as many miles as you wanted at 1 cent each or less include:

500 AA miles certs on Costco/Sams Club Eggo waffles in 2000, Hallmark/Valuemags bonanza/fiasco in 2001 offering transfer to many airlines, 6000 Qualiflyer (SR/SN/TP) or Qantas miles per $60 IF subscription in 2002, Cheap AsiaMiles (CX) via eBay Anything Points points.com partnership in 2003 and 2004, Cheap DL miles via FTD in 2005 and 2007 and ?, 500 AA miles per pack of Swiss Knights Fondue or Cheese in 2006, Shutterfly/Goldpoints 2007 offer netting cheap miles in a wide choice of airlines, Budget 8,000 DL miles per rental in 2008, US Airways winter shopping promo in 2009, BD miles via Wyndham hotels in 2010, and many more I am not thinking of at the moment.

In many of these promotions, people who played big had to pursue/fight to get all their miles. Also, many of these opportunities died once too many people knew about them. It is not in the best interest of the most savvy to make these opportunities easy to find when they come around unintentionally by the parties offering them. Exposure usually results in the quick demise of the promotion/oppurtunity.

Over the last 12 months, US Airways have been the easiest miles to buy. Several transfer miles promotions have allowed the unlimited purchase of US miles at about 1.05 cents each provided you can use friends/family accounts to transfer between. If recent US promo history repeats itself, August will see another one of these promos. Currently, one can outright buy US miles for ~1.4 cents each. Promos like these US ones are great to share as they are intentional. Many others I mentioned above were not and sharing them too widely quickly killed them.

If cheap miles are important enough to you, you can invest the vast amount of time required to find the less publicized opportunities that come around every year. Again, posting the unintentional options in a FT masterthread is not in the best interest of the FT savvy.

I have pursued this idea.
1) You have to have vast buying power to get a low rate. If you just want a couple million miles, you are not going to get anywhere near 1 cent/mile.
2) The airlines specifically do not want for you to be able to do the above at a low cost. If what you are doing is apparent to an airline, they will shut you down.
3) Many airline partner commercial sites offer airlines miles/points via third parties that manage all of their affiliate/partner offerings. These third parties have agreements to buy miles at less than you could directly from the airlines (quantity buying power) but often require you use their software - all miles issued go through their system. Not easy to game.

IF you have a merchant account that already has $$$$$$ going through it, you can probably earn yourself millions of miles at ~1 cent each by doing something like the below example:
1) Get 10 trusted friends to open a card like the Asiana Amex from Bank of America that earns two miles per $, not one. Friends would open card for your (temporary) use only.
2) Charge $100K to each of these cards over time. Of course, promptly pay the bills to avoid any CC charges beyond your merchant CC fees.

If you have an Amex rate of 2%, that would be 2 million Asiana miles (Star Alliance, redeem alliance wide) for $20,000 in merchant fees. Be aware this sort of thing is probably against your merchant agreement in some way and you will not get away with it if charging 2 million $ is outside of your normal pattern.

And odds on your cost to run an Amex will be higher, 2.5% - 3%.

paypal is 1.9% if you have the volume

Paypal also has a reputation for locking accounts and seizing assets with little or no explanation, taking months to investigate, and not necessarily coming up with a result that is favorable. I frequently see people on Fatwallet and elsewhere recommending that if one must have a Paypal account, it be linked to a secondary checking account, with money only in that as needed.