Buying Airline Miles
 

I am looking for good places to buy airline miles on major carriers. I recently purchased 80,000 AA miles at a charity auction for $950.00 which I think is a great price. I would probably be willing to pay up to 1.5 cents per mile. I know sometimes have promotions for employees,etc. and was hoping someone here can show me new places.

Kellogs has many different breakfast items that have mile coupons on the backs side of their boxes. Shop around and you might find the cost of these miles to be less than 1.5 cents per mile.

On this topic..
Anybody seen what people are paying for miles on Ebay. I was shocked. I'm sure that some of these will end up being voided for that sale prohibition.

BSL

AA sells miles in bulk @ .02.

0524,

check your source again. American sells bulk miles (minimum of 500,000) for 3.05 cents each through their Incentive Miles program.

They will, however, buy them back for 0.5 cents each (the difference between miles and cash in their combination miles/cash fares). What a rAAcket.

Thanks, Tino. AA has been offering us miles for .02 for corporate incentive awards. I'll rationalize the discrepancy with my AA rep when she comes in this week.

The last time I disccussed this with AA, the rate was .02/mile, and the minimum purchase volume was very low, I think as few as 5,000 miles?

The current rate for purchasing Aadvantage Incentive Miles is 2.2 cents per mile. We just bought some last week for a corporate program. I confirmed the existing rate by phone this morning. And AA will sell relatively small quantities. You can get details at 800-771-5000.

Indeed, BSL.

I had noticed, recently that people routinely were paying $20 for 500 Delta Skymile certificates (there seems to be a glut of them currently, with items selling more in the three-cent-per-mile range.

American is a different story: buy and sell at your own extreme risk!

Here is an example for the following Ebay item: http://cgi.ebay.com/aw-cgi/eBayISAPI...tem=1219960092

The seller had a follow-up message posted on their item, for which the auction had been terminated early:

Don't worry, I won't sell any; I hoard them for myself! http://www.flyertalk.com/forum/smile.gif

If the charity is something you would support anyway, then the actual value might not be as important. With c2it, where you can pay someone by e-mail charging it to your aadvantage card, you can "pay" someone up to $500 per day, $1000 every 4 days. The first 90 days are free. After that they charge $2.00 per transaction for up to a $500 transfer. So, basically it would cost $4.00 per 1000 miles or $320 for 80,000 miles. Of course it would take much longer to collect this depending on how many credit cards you have. Anyone with a citibank aadvantage card can get a click card for free, so eveyone can have at least two cards. You can this with any visa or mc, it doesn't have to be AA. Don't abuse it or list it under its own heading as I don't want what happened with Chase Currency to Go to happen with this. So, check it out www.C2it.com

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DtG

Having not participated in the Kellogg's promo myself, I'm curious as to what exact merchandise was being sold in that Ebay auction. Were the certificates being sold something that was printed by AA and inserted by Kellogg's into the snack boxes? Or is the "coupon" part of the actual snack box itself? If you're selling coupons, the airline has every legal right to bust you if they can - voiding your AAdvantage account as punishment. If you are buying/selling the actual Kellogg's product or Kellogg's packaging, then AA probably would have less grounds to punish you. Having said that, the airlines usually win these battles, and it's not worth the hassle anyway.

As a side topic: who in their right mind would pay $65 for 2000 miles anyway? There are dozens of other (unquestionably legal) sources of AAdvantage miles at a far better rate than 3+ cents/mile.

There are no State or Federal laws that make it illegal to sell/buy frequent flyer miles. It may not be allowed by airline policy but you won't be breaking any laws.

If the person on E-bay is selling the cardboard cutouts that allow you to exchange them for miles how could Amercian object? The sale is for the backs of ceral boxes, not miles themselves. Since the coupons do not have an advantage number attached to them and are not yet miles, how could anyone object?

The airlines do not want anyone selling miles unless they are the one's doing it.

Shame.

True, most states don't have laws against selling FF miles. But - the airlines have a LOT of precedent in their favor that allows them to regulate the handling of certificates issued by them - and allows them to close your FF account without any warning or compensation. It's not a question of criminal law - it's simply a question of whether the airline can do whatever they please with your miles for (almost) any reason. And they can.

As for selling Kellogg's products, this seems to me to be a different animal altogether. I'm surprised that AA tried to stop this auction. Perhaps had the seller phrased the auction differently (the title proclaims you are purchasing miles), AA might not have objected.

As posted previously in another thread, California has a law against using any ticket for transportation in violation of its conditions. That being the case, while buying FF miles might only violate program rules and not be illegal, using a ticket obtained with those miles could be illegal - at least in that state.

Do they have a policy which limits the number of miles you buy? It would seem that a company could buy miles in book and use them for travel. at $0.022/mile, a 40,000 AAnytime domestic coach ticket would cost $880 which is less than many full fare tickets.

Is it just me, or is anyone else bothered that AA has a "Sr. Investigator" in their AAdvantage program. Almost makes DL's Revenue Protection Unit look like the Boy Scouts.

Over a year ago, there was a thread regarding everyone's value of FF miles. If you fly full-fare 1st class international, then the value of FF miles could reach 8 cents. For most, like me, I consider miles to have a retail of 2 cents and a wholesale of 1 cent. Whenever I accumulate miles, I use the conservative 1 cent value and always try to redeem my miles when I can save enough to place the miles at a 2-cent value. Given this, I would never buy anything that could not get me a mile for 1 cent or would a buy miles outright for more than 3/4 of a cent.

If AA is attempting to prevent people from selling used cardboard boxes, then I guess we can no longer recycle! Is it now a crime to buy trash?

See also for value of miles:
http://www.flyertalk.com/forum/Forum1/HTML/003114.html

I stand corrected somewhat, but the rate is still not 2.2 cents. The rate is 2.465 cents for a minimum of 500,000 miles. For a minimum of 75,000 miles, the cost is 2.49 cents.

If you don't believe me, go to
https://www.aadvantage-orderform.com

Fill out the form for 1,000,000 miles and it costs $24,650. Perhaps when you are calling AA they are not giving you the whole story in regards to "taxes and fees and processing charges". It's still a rAAcket.

A few questions the AAdvantage GestAApo has raised:

Are you telling me that my grandma selling Kellogg's box tops on Ebay is in the wrong?

Is anyone who buys/sells Kellogg's cereal required to get an AAdvantage account?

Is the selling of, say, a coupon in the newspaper for $50 off a flight against the rules? Can I sell the whole newspaper to someone?

How can American void a certificate without knowing what box of cereal my grandma purchased? Are they tracking that, too? (explains their lack of profitability)

How can they even trace the participants anyway? Unless a real crime was committed, Ebay will not release personal data. How do they link my Ebay account to my AAdvantage account when there is no common link?

BizAArre....

Tino,

Thanks for the link to the AAdvantage miles sales page. Interesting; I didn't know one could buy miles for so (relatively) little.

Pity that the minimum purchase is $11,000. Has anyone out there bought these at this price for their own travel purposes?

A few legal items re: AA. No it is not illegal to buy or sell miles as Tango points out, but it is against airline policy, and since they also have no legal obligation to grant you the miles in your account if you violate the terms of the program they generally have a pretty big stick even w/o the law.

As to selling "box tops" I would suspect an argument could be made that it is ok to buy and sell "box tops", HOWEVER the argument could easily be made that because they are being sold for well above market value, (How many non-mileage granting "box tops" do you see selling for $40?) that the value is derived from the coupon contained within and therefore the miles are being sold.

Also before anyone gets too wild buying miles through their businesses, check the restrictions. Seems I looked into this a few years back and I think that they limit the number of miles to be deposited in any one FF account, thereby stopping companies or individuals from buying miles and using them instead of buying the ticket. I am not sure about current rules, but if anyone can confirm or deny this I'm sure it would be appreciated.

Sorry if I may have burst any bubbles, just trying to keep FT'ers out of a mess.

Dupe

[This message has been edited by The Mile Dog (edited 03-21-2001).]

Mile Dog is correct. I just browsed the AAdvantage.com website, and found the following. The rules regarding the purchase of miles prohibit:

- A company from buying miles and using them for business travel (not 100% sure how they would enforce, but it's written in the rules)

- Awarding more the 35K per 12 month period to a single AAdvantage account

The rate, for a minimum of 500K, is 2.3 cents per mile, plus tax. The rate for paper certificates is 2.325 cents per mile, plus tax, with a minimum of 75K miles purchased.

The 0.1 cent difference between what was posted above and what I read on the site today is that they have added a "processing fee" to the cost (as opposed to just changing the rate for the miles...I guess it lets the buyer escape a small amount of taxation).

The two rules listed above rule out a company buying tens of millions of miles to finance company travel. They also rule out the possibility that an individual could buy a large number of miles to achieve lifetime Gold/Plat status.

If there is another avenue through which AAdvantage miles can be legally bought - other than this AAdvantage Incentive program - then the rules may be different.

[This message has been edited by rmccamy (edited 03-22-2001).]

Any company that gets upsets about someone selling boxtops on E-bay is way to *nal.

Tango. There may not be any particular state or federal law against selling FF miles in the fashion stated above on eBay or anywhere else. Heavens, do you want Washington or your state capital to regulate and lesiglate about every minutia that occurs in society? However, there is both case law and general contract law at play here. The point is, when you enroll in a FF program, you agree to adhere by their rules and regulations. You have entered into a contract. If you attempt to deposit miles that were improperly earned -- and purchase of miles in this fashion would be deemed as improperly earned -- the airline can close your account and confiscate your miles because you have broken that contract.

Miles are sold by some programs as a complementary way of earning them, through company and charity incentives. This supplements the miles that are sold to various partners and suppliers who award them. And to assist people who may be a few hundred or thousand short for an award, and can top up their accounts in this way.

Just as they have been successful in cracking down on award brokers, so too would the airlines be in their enforcement in this regard.

Why don't FF programs want you to sell miles. I beleive that if miles were regularily sold then a value would then be astablished and this could be used by the IRS to tax miles. That is something that no one wants. So the programs are protecting the tax status of FF miles by prohibiting the sale, trade, or barter of the miles. Thus no value, no tax basis.
Just my 2cents.

Buying kellogs coupons on EBay is very different then selling/buying miles. You do not have to be a member of the Advantage program to buy the kellogs products. If you are not a member, how can you be held accountable to their rules?

Once you have bought these certificates and then become a member, you still are not breaking the rules becuase what you have done in the past is not addressed in the rules. Since you allready own the certificates when you become a member, how can you define that as buying/selling miles?

People seem to have no problems in trying to beat the system with back to backs, hidden city/nested/and many other methods. When it comes to something as innocent as selling the backs of kellogs products, people freak out like its the biggest crime of the century. I do not get it.

AA and other airlines regularly sell miles today, so as far as taxes are concerned, establishing a basis isn't an issue. The airlines have other reasons not to want us to sell/broker/barter miles.

It all comes down to generating revenue. The airlines are willing to sell miles via special incentive programs or thru product co-branding as in the case of AA and Kelloggs. It also allows them to gain advertising as well.

If any one should be complaining it should be Kelloggs. They're the ones being injured by folks selling the coupons on e-bay. That means one less box of Bran Flakes or Nutri-grain bars being bought.

AS sells the miles in coupons at $.02 per mile.
http://mileageplan.alaskaair.com/MPpremiums.asp

Does anyone have the location where the rules for buying miles from AA are posted? I would like to verify the minimum number of miles you can buy and the price. I would also like to know the maximum per Advantage account per year. Is it a calandar year or 12 months?

Thanks for all your help!

You can get information on the other program called AAirpass. This has a minimum of 25,000 miles. This is for the businesses/traveler that can't book 21 days in advance. Pricing per mile makes it cheaper than buying a ticket that week, but still no bargain. It is expensive for an everyday passenger! You must sign a 2 or 5 year contract and the 25,000 minimum is per year. If prices go very high in the next few years due to fuel, you are locked in at a price per mile with the contract. I don't know anything else. When I heard the prices back in October, I realized this was not a program for me.

The rules pertaining to the minimum purchase and limits per Aadvantage account per year come in the package from AA when requesting information about the bulk purchase program. The minimum purchase is 75,000 the price is 2.2 cents per mile plus applicable taxes and the deposit limitation is 35,000 per Aadvantage account each 12 months (not calendar). Our business participates in this program so I'm somewhat familiar.

I didn't know AA had a restriction on their incentive program that an only 35,000 miles can be deposited in an account in any year?

From the United Airlines website:

"If you're just a few thousand miles short of your next award trip, here's good news for you. Personal Miles® is now available to all Mileage Plus® members through December 31, 2001. This exciting program allows you to purchase up to 15,000 Mileage Plus miles per calendar year for only 2.5 cents per mile plus 7.5% excise tax and a .001 per mile processing fee. You may use any valid Visa® or MasterCard® to buy Personal Miles.

You can apply these miles toward award travel on United or any Mileage Plus airline partner, or toward upgrades on United. Miles are available in increments of 1,000. Please allow two to three weeks for your miles to be posted to your Mileage Plus account. Personal Miles are available for purchase only on the Internet and are not refundable. All standard Mileage Plus program rules and conditions apply."

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United also has another program called "Reward Miles" for Corporations.

"Minimum Initial Purchase
The price per mile is US $.02, plus a 7.5% Federal Excise Tax and a US $.001 per mile processing fee. For electronic Reward Miles, there is a 200,000 mile minimum purchase equaling $4,500 inclusive of tax and processing fees."

Hey Guys,

All I can say is be very careful what you do. I was questioned enroute by an AA supervisor about my travels on them. Within 2 months my 400,000 Platinum AAdvantage miles were gone and I was banned from the program for life. All I received was a form letter from corporate security via FedEx. They did not take into account the thousands of $$$ I spent on them to earn these miles. If they don't like your earning patterns, you'll be scrutinized mile-by-mile and you can kiss the account goodbye if anything turns up suspicious. Don't let this happen to you!

Wow, Almost Grounded!
Do you mind sharing what infraction(s)you were accused of?
Thanks.