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Miles donation: conniving scam?

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Old Feb 16, 2006 | 8:56 pm
  #1  
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Thumbs down Miles donation: conniving scam?

This probably has been discussed, but for some reason the search function often poops out in IE5 for me...

While on hold with NW, there was an advert about donating miles so help "families in need" travel. Ha! Just about every time I fly (mid-week on cheapest fares) there are empty seats next to me. Am I the only one who finds this ironic?

Why do I donate my miles to an airline so that a seat that would fly empty anyway be given to someone "in need". The whole things seems like a caniving scam (in a humanitarian guise) to separate me from my miles. It doesn't seem possible for mile donation (to airlines) to be humanitarian.

Why do the airlines (whose job it is to transport people) put the responsibility of transporting people in need on the customers of the airlines. It seems backwards to me. Anyone else?

Is it just a way write off some taxes?
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Old Feb 16, 2006 | 9:07 pm
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You are correct on all counts. It is a ploy to separate you from your miles. Read the fine print on those donation sites - they get the tax write-off, not you. You are donating $0 to charity - you're just voluntarily erasing your miles from the books.

The airlines, like all major corporations, allocate a defined portion of their budget to charity donations, obviously much in the form of free flights. That's fine and great - but it has nothing to do with whether you donate miles or not.

If you really want to donate miles, offer a free ticket to a local charity that has a need to transport people. Logistically, it's no longer as easy as redeeming a paper certificate and handing it over to the local children's hospital or whatever - but if giving away miles to charity is really what you want to do, it can be done. Opinions vary on deductibility, but worst case at least you know your 25,000 miles directly translated into a free trip for the charity.

The catch of course is that a lot of people would love a way to pool orphaned miles to put them to good use. It can't be done, and that's by design.
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Old Feb 17, 2006 | 5:57 am
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excellent response pinniped....I have long considered the prospects of donating miles to these various airlines' "donor" programs...I've got orphan miles all over the world in various pools that I have little chance of efficiently using...but I have so little confidence in the fundmental intrgrity of the airline to morally and ethically utilize the miles *WITH ANY EFFICIENCY* that DIRECT DONATION of the actual award is the only way I would consider this sort of thing. During the recent hurricanes, I made available award seats to the local Red Cross but NEVER considered dumping miles back to AA to let them direct them.

One example: I would not be surprised at all to find the airlines would only convert 50K tickets instead of 25K, and so on; IOW always using the poorest conversions to fill their empty seats at higher mile awards to burn the miles...and oh, maybe some needy got the awards as a by-product. From Arpey on down, I don't trust these people any longer.

Dunno - maybe I'm wrong here. Would like to see conclusive evidence either way.
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Old Feb 17, 2006 | 6:32 am
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I generally agree with the above, except:

I would think that the only tax deduction the airline gets is for the relatively minor incremental cost of fuel, beverages, and food (if any) , plus it may be a moot point for many airlines because their losses mean they're not paying any taxes.

At least in the case of DL, I think there is a way to designate miles for a specific individual.
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Old Feb 17, 2006 | 2:49 pm
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Same rule applies with the rising popularity of donating a vehicle to charity for auction. The auction companies make a killing at these, and some reports show only 10% of the sale price making it to the charity. It is much better to dispose of the vehicle yourself and donate the $$ to the charity.
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Old Feb 17, 2006 | 2:56 pm
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I've traveled many times on donated miles when I was doing disaster relief, stayed in hotels on donated nights, etc. With out those, the airlines and hotels wouldn't be giving the seats away for free, and the hotels wouldn't be giving the nights away.

It's made a significant difference in the relief operations, because of the dollars saved in the logistic support.
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Old Feb 17, 2006 | 3:05 pm
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Originally Posted by AZ_MISMAN
Same rule applies with the rising popularity of donating a vehicle to charity for auction. The auction companies make a killing at these, and some reports show only 10% of the sale price making it to the charity. It is much better to dispose of the vehicle yourself and donate the $$ to the charity.
Didn't the IRS dramatically change the rules on this about 1-2 years ago?

I thought I read somewhere that the idea of donating a total piece of crap car to one of those auction outfits and then writing if off at blue-book value is no longer legal.
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Old Feb 17, 2006 | 3:13 pm
  #8  
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if you haven't you might poke around here once and a while:
www.miledonor.com
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Old Feb 17, 2006 | 4:44 pm
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Perhaps a helpful moderator will change the spelling in the thread topic title to "conniving"?

While I can empathize with the do-it-yourselfers who like to get the most bang for their charitable buck, it seems those with actual experience on the back end of these deals acknowledge their value. See Posts #6 & #8, supra.

I have grave reservations about the honesty and integrity of NW, due to the loss of 10,000 miles each for three in-laws during the Fly Free Faster 3 promo resulting from failure of a WorldPerks Mall (Old Navy) transaction they each made. However, no one lies and cheats all the time.

If it were truly a scam, I'm sure regulatory authorities would be on top of it. Of course, some airlines do have better reputations for candor than others.
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Old Feb 17, 2006 | 4:50 pm
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Conniving has been corrected.

Originally Posted by SPN Lifer
Perhaps a helpful moderator will change the spelling in the thread topic title to "conniving"?
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Old Feb 17, 2006 | 6:04 pm
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Originally Posted by SPN Lifer
While I can empathize with the do-it-yourselfers who like to get the most bang for their charitable buck, it seems those with actual experience on the back end of these deals acknowledge their value. See Posts #6 & #8, supra.

If it were truly a scam, I'm sure regulatory authorities would be on top of it. Of course, some airlines do have better reputations for candor than others.
Please don't me wrong. I certainly don't think it is a scam in the sense that the airline takes our miles but don't give them to people in need - I am sure that they fly a lot of people (using donated miles) who otherwise wouldn't be able to - and there certainly is great value in this.

However, my point is that the airlines fly thousands of empty seats a day. Can't the airline fill a small percentage of those seats with people in need - the same people that would be flying on donated miles? And couldn't the airline write off the expenses for that donated seat? ...they know how much it costs to transport one passenger X number of miles.

Why would the airline even consider taking its customers' miles, when it can very well fly a person in need without the use of those miles? It seems that the airlines have figured out a way to separate us from our miles, and be praised and respected for it.
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Old Feb 17, 2006 | 9:11 pm
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mellowg,
your point is salient and intuitive and dead-nutz *on*. The "cost" to give that unused and unsold seat away is essentially zero if it was unsold, and I can think of industry after industry that gives its product or service away as a benevolent function and *doesn't* ask for an off-setting donation. Drugs (pfizer et al), hardware (Home Depot/Lowers in hurricane aftermath), pro bono work by legal firms all over the US (I use the US for example)...the list is endless. Heck, even my small business gives away miles, points and some of our product to local schools, charity auctions, etc, and I DONT go out begging my customers to pay for MY donations in what, bluntly, is an outright scheme, conniving or otherwise. I have never heard of ana irline donating seats. Maybe it happens. Dunno.

And we should be impressed that the airlines have "formalized" a method that WE, their customers, can GIVE BACK through them something they themselves scheme against us to use on our own in an efficient manner (AA's milesaaver is a classic) ? Further, we should then trust these same airlines to *efficiently* give away what we donated back through them (did they donate back the money they sold the affinity points and miles for - of course now) and they get sole credit for ? No thanks. Paint me cynical.

Test case: Wonder if they *burn miles* when they fly kids and families such as Make a Wish trips ? or do they donate the seats ? Sure would like to have my faith restored in today airlines...
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Old Feb 17, 2006 | 9:21 pm
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randy, with your miledoner.com site...does this organization directly control and issue the award or does it simply "re-direct" the miles and points to the given airline or hotel and then the hotel or airline "manage" the room or flight and convert the points or miles ?

If you and the foundation at miledonor actually converts the points and miles into awards in an efficient manner, this is super. If miledonor simply "hands over" the miles and points to the airline or hotel...I say it just goes back into the black hole and we're back to trusting the airline or hotel chain. egads
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Old Feb 17, 2006 | 9:40 pm
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Originally Posted by ILUVCITIBANK
I have never heard of an airline donating seats. Maybe it happens. Dunno.
Continental certainly "sponsors" a lot of charitable and civic events in this part of the country, and gets considerable goodwill for doing so. The annual late spring Flame Tree Arts Festival (on Saipan) comes to mind.

I don't know if they are providing cash or what, but it seems in-kind contributions, or even discounts, would be easier for them to make.

There is no reason customer frequent flyer mileage donations would have to be an either/or proposition with respect to airline donations of services (flights).
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Old Feb 17, 2006 | 11:22 pm
  #15  
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My simpleton thought on this is that the airlines will use our donations to lower their book liability on outstanding miles.

As I understand it, some(if not all) airlines have on their books the liability of FF Miles outstanding. If this is true then us consumers and holders of those miles help lower that liability. So keeping track of the donated miles and passing those along to those needing the miles would be important, at least from a GAAP standpoint.

Of course I could be wrong on everything above.
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