Hi,
I'm not sure whether this topic has ever came up (I checked and found nothing), but am curious to find out anecdotes/examples of promotions or loyalty programs that failed (i.e., became too expensive to run or were not fullfilling their original objectives) due to loopholes and/or not-so-thought-through executions (both of which we were able to take advantage of ).

I can think of the following as examples, but am sure there were/are/will be (we hope?) many of them. So, I would like to hear your experience.

(1) Promotions from MyPoints.com without any minimum purchases: They became savvier now, but until recently, MyPoints.com gave out 2450 points for AmTrak purchase, so we were buying an $1.10 AmTrak ticket for 2450 pts. (Btw, there's minimum of $25 purchase now.)

(2) Promotions without maximum points rewarded: Again, at MyPoints.com, you could buy Tupperware for 800 pts, so you could've bought $1 gift certificate(s) without any shipping & handling. (Apparently, they found out about this one as well.)

(3) Airline double / trip mile bonuses: I'm not sure whether these qualify as failed promotion, but I recently flew from PHL to MAD at an amazingly cheap price (300+ dollars), and received double miles (about 7350 miles), 3000 bonus miles for online purchase, and additional 10000 for european activation bonuses. I'm not complaining , but shouldn't the airlines be more careful about not giving out too much bonus miles?

(4) Last year's GoldRewards promotion of magazine subscription was such a great deal. This may not be a failed attempt, though, since ValueMagazine was trying to sell magazines at cost, I believe.

So, do you have any stories to tell? I'd love to hear yours. Thanks.
--Sun

Edited for minor spelling mistakes.


[This message has been edited by spark (edited 03-14-2003).]

I think a promotion that PROMOTES a new business or service is often priced as a "loss leader". If we're smart enough and quick enough to take advantage, all the better for us, and the business gets its name and new product out. ValueMags will be sending renewal subscription notices to us for years based on all the mags we bought and some of us WILL renew. Every couple days I see a new thread wondering when Randy will offer a promo for IF subscriptions. Was the cost worth it? Only time will tell.

IIRC, they pulled the triple Goldpoints offer four days early (Dec 27 instead of Dec 31?).. so you could only earn 150 Goldpoints/$ instead of 450 Goldpoints/$.

Did Flyertalk contribute to the end of the Mexican Hat Dance?

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View from the Wing: A blog about Free Miles and Free Markets

Racking up 40-50K for each round trip sure raised some eyebrows at USAirways last year.

Quite an uproar on the US boards, with threats of account cancellations, mile revocation, etc.

At least it drove them to fix their broken IT systems.

City Bank had a promotion for sending money electronically using their credit card for upto $500 every four days free of charge, and they gave airlines miles for that. Some people used it to send money back and forth between family members thereby earning points at both ends. They soon caught on and started taking member's privelege to transfer money via credit card out. Lately they have installed, I believe a 2% fee for such transactions making it unattractive to use it.

Oh yeah, I forgot to mention c2it. Of course, they caught up with it too (as of Feb 23rd, I believe.)
--Sun

It was a good year, especially fall, to fly US. The miles were also status miles. It supposedly cost them $50K to fix their systems. Now we are back in reality and as they say - reality bites.

Unfortunately, some people "abused" the promotions to the point that many of us will never get to even reap the benefits/rewards of the promotion once the merchant caught on and rectified the loophole.

I guess it's simply human nature to maximize and milk a great deal as much as possible until it is gone.

An offer that gives us more in points than the object we've bought is worth is clearly not a long-term proposition for the company making the offer. Will it be pulled sooner because we milk it? Or has it been predetermined what the expiry date will be? In many cases, we can never know whether we (as individuals, or a particular group such as FT) really matter in this.

Here are two that come to mind:

Bank of America debit card: One could purchase money orders and earn miles. After an article in the Wall Street Journal advertised this loophole, points were no longer awarded for money order purchases.

Healthy Choice Miles Promotion: Though this offer is still available, the original offer allowed the mileage junkie to purchase hundred to thousands of inexpensive pudding cups netting millions of miles. The new offer limits the types of products purchased.

Both of these offers loopholes were well advertised in the media resulting in the change of terms for the promotion which made them less lucrative for the mileage junkie.

I did not find any current miles promotion on the Healthy Choice website. What promotion are you referring to?

Sorry, let me clarify. What I meant to say is that once the loophole was discovered, Healthy Choice still offered the airline program, but it was revamped drastically, so in essense, the program was not terminated due to abuse but was reworked to prevent abuse. I think that the program as a whole has since expired.

PuddingGuy, the patron saint of FT and inspiration for the movie Punch Drunk Love.



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Middle_Seat

If you are referring to sharing of 'targeted' promotions then:

- the current wrangle in Starwood in which the program provider has changed the enrollment of everyone who enrolled multiply, having found out the promo codes on Flyertalk.

Continental, like US, also did some changes to IT systems after some targeted-offer promo codes got out. They started saying specifically that the offer was only good for the recipient and would reject the code if someone tried to add it to an account online. In at least one case they pulled back miles that were automatically credited in one of the offers, but did it quickly enough that the only people who saw it were ones who kept close watch of accounts online. At least CO didn't do the threats or widespread account adjustments well after the fact; they decided the energy would be better spent making sure the miles wouldn't be worth that much, anyway.

Valuemags/Goldpoints was a classic fiasco. They pulled the plug so suddenly that Valuemags got blindsided and many people (like yours truly) who got in under the wire had to fax proof because the points posted at the devalued rate, not the correct one. It was messy.

[This message has been edited by RustyC (edited 03-15-2003).]