Points.com investigative work
 

Well here is what I found out from points.com

Transferring from (A) 1,000 miles into (B) Clickrewards:

Air Canada - doesn't participate
American West - 75
American - 62
Beenz - doesn't participate
Midwest Express - 87
Phone Hog - 500

If anyone else has usefull tidbits, or thinks about better ways to convert please speak up.

My goal is to get my miles into NorthWest WorldPerks, and this is why I am leaning toward using ClickRewards.

American -> American West = 10 to 0.97
American West -> American = 10 to 1.17

American -> Midwest Express = 10 to 0.9748908
Midwest Express -> American = 10 to 1.3648472

American -> Click Rewards = 10 to 0.6201388
Click Rewards -> American = n/a

Points.com's exchange ratio is too ridiculous to be useful. Here are some examples:

To get 25,000 ClickMiles, you would need to spend 400,000 AAdvantage miles. Just to put it in perspective, 400000 AA miles can get you 16 domestic roundtrips. 25,000 ClickMiles can get you 1 roundtrip.

OR

You could spend 320,000 AA miles to get 20,000 ClickMiles, which can be moved to Starwood and redeemed for 25,000 airline miles.

Points.com also does the same with America West miles...and the ratio is a bit cheaper. Its 270,000 America West miles = 20,000 ClickMiles.

You can play around with this at http://www.points.com/calculator.jsp

Can someone point out a good reason why I would burn almost half a million AA miles to get 25,000 ClickMiles?

Air Canada -> Midwest Express = 10 to 1.4168933
Midwest Express -> Air Canada = n/a

Beenz -> Air Canada = 10 to 1.5875733
Beenz -> America West = 10 to 1.5292576
Beenz -> American = n/a
Beenz -> Click Rewards = n/a
Beenz -> Midwest Express = 1.5292576
Beenz -> Phonehog = 10 to 0.5002857

Gosh...these are FAR worse ratios than I ever imagined!?!

http://www.flyertalk.com/forum/eek.gif <- 1st time ever using that one!


Dorian

------------------
The Global Lounge Project - open source airline lounge listings - managed by Dorian
flyers'places - restaurant, bar & hotel tips - managed by Catman, Shareholder, Rudi & Dorian
The Star Alliance RTW Price Chart - by Dorian
The Star Alliance Gold Comparison Chart - by Blondebomber

I agree completely. What ridiculous conversion efficiencies!

FewMiles..

But wait -- there's more!

There is a $5.95 per-use fee for exchanging points after the first exchange. http://www.flyertalk.com/forum/eek.gif

Of course, you can avoid the fee by enrolling in a "pointsplus" account for $14.95 per year.

------------------
He who dies with the most miles ... is dead.

[This message has been edited by ontheroad (edited 04-02-2001).]

I don't think ANYONE - even old moms & pops who are not technically savvy about the loyalty programs business would be foolish enough to burn 400,000 pts for 20,000 pts. Can anyone guess why American Airlines of all people decided to associate itself with these guys? I would think United would be the first, since AA already has AOLAAdvantage...!?

I can transfer 5 miles from Midwest Express for 1 AAL miles. Either that is a rounding error, or I could improve the (lousy) ratio and transfer from Midwest to AA several hundred times.

But, it's $5.95 per transaction. But I can get a yearly plan for $14.95. Hmmm...

"No matter how you slice liverwurst, it smells like liverwurst."

[This message has been edited by ontheroad (edited 04-02-2001).]

....no it isn't?

Points.com sucks the big time.

If you need to transfer miles between programs, HHonors is the way to go. HHonors is free!

The only use I can see is if I have 500 or 1,000 lonely miles sitting somewhere. Since I rarely use anybody besides NWA, I would probably take the hit to get less than 100 clickrewards (because at least it would be something).

I didn't know about the $5.95 fee though. I'll have to read up on that.

I may do a one time purge of all my vacant accounts to see if I can get up to a couple hundred clickrewards.

I agree, it seems really crappy.

Reminds me of that other horrible program, Milepoint. What a waste.

Who is to say that behind the scenes they don't have an arrangement with Hilton whereby the points are actually transferred via Hilton but Hilton pocket a lot of free miles and pays points.com for the privilege!

What a rip off!

cheers Peter

Must have been designed by the same folks who put together the lame offerings for AOLAAdvantage.

Djlawman

I used the points.com chat line to talk about these unbelievable exchange rates. Here is the conversation:

<Christian>: Thank you for contacting points.com. How may I help you?

<You>:Hi, I just tried calculating how many ClickReward points I would get for cashing in 12,000 AA points and the result was 744 -- can this be right???

<Christian>: Yes it is right, our loyalty program partners set the xchange values, and as we get new partners, our exchange rates between programs will improve

<You>: Second Question: When will I be able to exchange Air Canada points into anything?

<Christian>: With most of our pointsxchange partners you can xchange both to and from your account. Some of our partners will phase in their participation in pointsxchange to most efficiently manage the resources required to complete the set-up.

<Christian>: These partners will start with the ability to xchange to your account followed by the ability to xchange from your account. Please continue to check our about partners section for updates to their status.

<Christian>: Currently you can into air canada

<You>: Thanks for the answers. Some feedback: Check out the Frequent Flyer bulletin board at www.flyertalk.com -- you guys are getting pretty bad press re: the points exchange rates and fees.

<Christian>: Thanks for the feedback. Is there anything else I can help you with today?

<You>: Err, no.

Look who's on their advisory board!

Bruce Chemel - President, AAdvantage Marketing Programs, American Airlines

Rupert J. Duchesne - President, Aeroplan Division, Air Canada

Barbara Amster - Former President, REALTOR.COM & Senior Airline Industry Executive - American Airlines and Canadian Airlines.

Their executive team include:

Rob MacLean President - Prior to points.com, Rob was Vice President, North American Sales for Canadian Airlines. He was also the head of the highly successful Canadian Plus loyalty program.

Steve Ogden VP, Marketing - Steve's 12-year career includes international and domestic experience with a number of customer-driven organizations such as Canadian Airlines, Northwest Airlines and Intrawest.

Bill Thompson, VP Partner Relationships - Bill has over 30 years experience in the US airline industry, holding various senior sales positions including Managing Director Sales for American Airline’s Central Division.

Roy Brown, VP Corporate Development - Roy brings over 10 years experience in the areas of corporate finance, strategy, technology, loyalty marketing and the Internet, most recently as the Managing Director and founder of Netcentives Inc.'s Canadian operations.

And among their board of directors are:

Douglas Carty (Chairman of the Board) - Former Senior Vice President & Chief Financial Officer, Canadian Airlines

Rowland W. Fleming - Former President & CEO of The Toronto Stock Exchange.

i love how it's "xchange" into. heh.

i think i'm willing to sign up to be a part of the sheer numbers, and then hope it goes somewhere, though i think the real use is going to be clearing out small amounts of orphaned miles in a program.

however, as it is, this isn't just bad, it appears laughable. though you might actually get to do something with those beenz while that program is still around. (i just don't think i'm twee and hip enough for beenz. http://www.flyertalk.com/forum/smile.gif )

With the ludicrous exchange ratios, I can't see this program surviving very long, even with the people on the advisory board.

Maybe we should question Bruce Chemel about this when he appears as next month's guest on the FlyerTalk chat.

I never exchanged click miles for FF miles and I sure will never even consider it in the future with the new system.

Every 3,000 miles, I get 2 movie passes, 2 drinks and popcorn....It comes in very handy to pass out to clients when they send me a referral or take my wife out (and can find a babysitter<g> )

FWIW

Based on the ratios and the business model of what I have seen, I do not give points.com one year of survival in it's present state.

This is another marketing nightmare which will prey on unsuspecting people who do not realize the value of their club loyalty points and miles.

Personally, I would be very embarassed to post these ratios to any person who collects these points or miles. For such a "distinguished" staff or board, they must have had quite a dream to actually believe there are going to be this many suckers who will fall for this scheme...or they must have been smoking some very good banana peels!

Hopefully for them, they will come out of the ether soon...very soon. Their potential customers (and I use the word "potential" very loosely) have never been in the ether. They have a fantastic idea. However, the question I have is a very simple one:

Do they really have to rip off their customers this way to make a profit? If the answer is yes, then points.com does not deserve to survive. Furthermore, the "value perception" they are creating with this exchange model is so ridiculous that it will tarnish any good thing they might do on other attributes of the site.

Simply put, they would be much better off not having the exchange until they can do it correctly.

My final point is their distinguished panel of airline executives should certainly review their marketing plan. What we are all presently witnessing is legalized theft of our earned airline miles. This business model is another fine example of how overpaid this group of executives really are. And to think, these guys all ran billion dollar businesses! Perhaps they all need a crash course in "Marketing 101!"

Actually, it's not just legalised theft so much as that it's paying to have them stolen from you after it happens the first time.

i suppose this is taking "there's a sucker born every minute" further by adding some neat Flash presentations and big names to this circus. i still remain hopeful that it might develop into something, but i have this strange addiction to guarded optimism. http://www.flyertalk.com/forum/smile.gif

What an absolute JOKE. When I took the "tour" of the exchange a couple of weeks ago, they made it look like you'd be getting something like 50% reduction...which is still pretty steep. But THIS? not even 1/10th the value on many exchanges? What were they smoking?

And WHO in the heck gave them the money to put this together....obvisouly not a venture capitalist with much 1)smarts 2)travel experience or 3)belief in the smarts of others.

I emailed points.com to let them know what I thought....... And then I told them "good luck because you are really going to need it."

The names you see above on the board of advisors consists of some very smart people. They probably haven't invested a penny in this crap, and have nothing to lose. Airlines like American and Air Canada pretty much got a win-lose situation out of this....they can offload some of their miles (which are considered a liability from the airline's prespective) for a VERY healthy profit. Plus points.com probably pays them some premium just to keep them as partners. My guess is that the airlines who've partnered with these guys don't give a **** about points.com. They have more than enough offline partners like Hilton, AOL, Citibank etc. They're just having a little fun at points.com's expense, with no personal stake. Pretty slick huh?

By the way, points.com is funded by a Canadian incubator known as Exclamation. They're using the "incubator" model to launch internet companies like points.com and others. If any of you are aware, this business model was used by CMGI and IdeaLab, 2 US companies who blew up BILLIONS of investor dollars last year and are now close to bankruptcy. Anyway, the other companies Exclamation (points.com's parent) has launched can be found at http://www.exclamation.com/companies.html . Go ahead, check it out. I promise you will get a great laugh out of it http://www.flyertalk.com/forum/smile.gif

Their current market cap is about $10 million US$ and trades on the Canadian exchange as XI (interesting to note that XI's stock price has dived steeply since the launch of points.com. - http://www.cdnx.com/Quotes/CompanyInfo.asp?sSymbol=XI&sTab =TradingGraph&sName=Exclamation+International+Inco rporated

According to a press release from the Canadian exchange, "Exclamation intends to invest approximately $4-million of the
proceeds at US $2.50 per share into Points.com"

My opinion? Charity would've been a better use for $4 million.

[This message has been edited by custombagel (edited 04-04-2001).]

I agree. Based on their points.com business model, anybody who has invested money in points.com or this group needs their heads read. The wisest thing these investors could do is sell their shares now before more of their money gets burned.

The idea for points.com is fine - it is just that nobody with half a brian is going to use their service at the exchange rates they charge. Anybody with any sense will use Hilton Honours.

cheers Peter

Short the stock!

POINTS.COM: MILE EXCHANGE MADE EASY--BUT BENEFITS COME AT

When Points.com launched on April 2, it purported to address a longstanding and deeply felt need of mileage aficionados: the
ability to readily transfer miles among different accounts. While Points.com is a step in the right direction, most frequent travelers are likely to feel that fulfilling their dream of exchanging miles will have to wait.
http://rd.SmarterLiving.com/da051001.19