Who subsidizes transfer bonuses?
Mar 17, 2006 | 3:34 pm
#1
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Who subsidizes transfer bonuses?
American Express, Diners Club, and various hotel chains periodically offer "bonus" miles for transferring points from their own programs to specific airline programs. Who initiates and bears the cost of these promotions?
For example, Diners Club Rewards points normally transfer 1:1 to British Airways, but May through August it will be 1:1.5. Does Citibank absorb the cost of these additional miles, or does BA sell miles to them at a discount during the promotion, or do the two firms share the cost? How does Citibank benefit and how does BA benefit?
I have ideas, but no hard information. Interested to read what others know or think and why.
dennis
For example, Diners Club Rewards points normally transfer 1:1 to British Airways, but May through August it will be 1:1.5. Does Citibank absorb the cost of these additional miles, or does BA sell miles to them at a discount during the promotion, or do the two firms share the cost? How does Citibank benefit and how does BA benefit?
I have ideas, but no hard information. Interested to read what others know or think and why.
dennis
