How much to companies pay for FF miles?
 

How much does a credit card company, or a rental car company pay an airline when they give frequent flyer miles for a purchase?

For example... I rent a car from Dollar. They give me 50 miles/day x 3 days = 150 miles. They charge me a $1.50 service charge. Do they pay 1 cent per mile to buy miles and pass that whole $1.50 to my airline?

Second question... How much will an airline "buy back" their miles for? If I redeem my miles for something other than air travel, what do they give to the company where I am getting a good or service?

Example... Continental will let you redeem miles for magazine subscriptions. Say a magazine subscription costs 4,000 miles. How much does Continental pay to the magazine company?

I would assume there is a bid/ask spread, just like in the stock market. How big is the bid/ask spread?

This is the most recent thread on this very frequently discussed topic. Let's continue the discussion there as a better alternative to fragmenting it all over the place.