FF Phone Excise Charges--please help
 

I recently signed up for a mileage deal from Sprint and see on my bill an item for almost 4 dollars labelled "frequent flyer excise charge." I'm sure it's included in the fine print somewhere; could someone tell me in plain language, though, what they know about this extra fee. Is it going to be a steady monthly amount? Do other phone companies charge an equivalent? And finally, from your experience and/or calculations, is it worth the extra charge (it seems this will add up indeed) to continue to earn miles past the initial bonus from a long distance plan? Any help, advice, or information would be greatly appreciated. Many thanks in advance for your time.

Magdalena

It's an extra fee Sprint now charges on airline partnership programs:

Frequent Flyer Excise Charge: If you participate in an Airlines/Sprint Partnership Program, you will incur a monthly Frequent Flyer Excise Charge calculated as follows:
Total Frequent Flyer Miles Earned X $0.0010
Example: 270 frequent flyer miles earned from Sprint X $0.0010 = $0.27


See above description.

Some do, some don't. Sprint charges such things as "FF excise charges" and "number portability fees" because consumers let them get away with it. If people would object and switch to the competitors that don't charge such fees, then perhaps Sprint would get the message.

The phone/FF excise charges are similar to those charged by many car rental companies on FF miles. If credit card companies thought they could get away with it, they'd charge such a fee as well. However the CC market is much more competitive.

Wow. So they really get away with that...

Thanks so much for the info. Much appreciated.

I can almost pay my Starwood AmEx annual fee with the money I'll save just on these charges by switching back to ATT. That is, if they don't have similar rotten tactics up their sleave.

Gee, you didn't mention the reimbursement of a portion of our property taxes fee now replaced by the flat $0.99/month all inclusive recoupment of operational costs fee. I got to the point where I was tired of all the nickel and diming so I've left Sprint.

Notwithstanding, an equivalent fee has been popping up more and more places recently. Most of the airlines charge the equivalent fee when you purchase miles from them. Alamo car rental charges the equivalent fee for their car rentals IF you ask for frequent flyer mileage credit [if you don't then there's no equivalent fee].

If you look at IRS publication 720 I think [I could be wrong on the number] you will find regulations which mandate the airlines' payment of the airline excise tax on frequent flyer miles capable of being redeemed for air transportation.

Yup, I just left Sprint 3 days ago after finding the new $0.99 property tax reimbursement fee. I rarely use my landline long distance so normally paid $0.71/month, and the new fee increased that by over 150%. So I called Sprint, where the agent flat out lied that the new fee was a "tax" and read a script saying it was FCC mandated.

So I put the agent in his place for lying, cancelled my service, sent an e-mail to Sprint accusing them of decpetive practices (for fraudulantly claiming a rate increase was a govt. tax), and reported them to the FTC for the same.

**** scum phone companies.

Does anyone know whether ATT charges a similar FF "tax" for mileage accrual?

Just got my first bill with bonus miles having posted: It appears AT&T does not charge frequent flyer excise taxes.

Well, it is a big increase but not 150%: [(99 + 71) / 71] - 1 = 1.394367... or a 139% increase.



[This message has been edited by LouGroza (edited 10-26-2003).]

Starting a couple of years ago, there is now a 7.5% federal excise tax on all FF miles award for reasons other than actual air travel. It's up to the company awarding the miles to decide whether to pass the tax onto the consumer. As others have already stated, most car rental companies do, most hotels don't, most credit cards don't, and perhaps it varies between phone companies.

Actually, Diners Club instituted just such a charge at the end of 2001. I can't remember if they specifically referred to the federal excise tax, or just called it a "service fee." But since it applies only to redemptions for airline miles and not hotel points, it's pretty clear what they're doing: passing along the federal excise tax to the cardholders.

I had been a happy DC cardmember for several years, but when they announced this new fee, I made a serious effort to look for a replacement card. Fortunately, I found the newly-released Starwood American Express card, which in most respects is a much better card for mileage junkies. Even though I think the Starwood card is better for mileage earning, I very well may have never switched to it if it were not for the DC redemption fee. As others pointed out at the time, this would spread like a cancer to other credit cards if left unchecked, so I decided to switch because of it. I've never looked back.

[This message has been edited by Steve M (edited 10-26-2003).]