Both CC and LoyaltyMatch are essentially services that facilitate bartering. If you are signed up (qualified) to use them, they help you find a partner for barter. One does this via a system of posting and PMs, the other is more automated. I see them as quite similar from the perspective of the companies that offer the rewards with respect to their T&Cs. Neither, as mentioned before, is illegal.

I haven't noticed the T&Cs of any loyalty program making a distinction between barter of travel-for-travel and the barter of travel-for-non-travel. Therefore, if considering T&C violations within CC versus LoyaltyMatch, I don't think there is any difference.

I agree. The "spirit" might be different. but when it comes down to it, the exact same violation of T&C is happening. LoyaltyMatch only differs in its mechanism of "matchmaking".

You can think about both CC, LoyaltyMatch, and any similar service as being akin to P2P networks and file sharing. P2P networks have been upheld as legal (some have not, but because of distinct IP-related issues) because they are simply matchmaking for barters, not responsible for what is being being bartered.

Actually, that is not what you posted at all. You actually posted:
This is the same exact bit that I put in my first reply to you that you have still not answered.

The article you've cited has exactly one reference to your program, and it is NOT from a loyalty program executive. It is from Trevor Van Nest, Vice President of Consumer Card Marketing, American Express. And his view is that the program would be positive if it allowed for the consolidation of points, which it does not offer. So you've got an unqualified person answering a question about a product he is apparently not completely familiar with, and the answer is that is is "not very popular yet and won't become popular until someone comes up with a model that makes it valuable for the customer to transfer and consolidate." That in no way speaks to the legitimacy of the service you offer.

As for citations for programs that expressly prohibit what it is that you have formed your business to facilitate, here are a few.

Continental Airlines:
Is your program fully authorized and/or sponsored by Continental Airlines?

Delta Airlines:
American Airlines:And lest you think it is an airline-only thing, take a gander at the rules for the Starwood Preferred Guest program:Hertz is pretty explicit, too:
This is even more restrictive than the hotels and airlines which do allow one to book a reward in the name of someone else.

How many more examples would you like to see?

I wish you a lot of luck, Brad, but to come here and claim that the transactions you are facilitating are not cash-based, not in violation of the program T&C and actually beneficial for the airlines is just plain ludicrous.

I usually find what Tim Winship writes to be drivel, either true but uninsightful pap or incorrect conclusions based on outdated assumptions. So it doesn't impress me that he is the only person specifically named that LoyaltyMatch has posted about in this thread. But I went and looked up his article talking about LoyaltyMatch, and quickly perused the company's Web site.

I find it fascinating that the founder of LoyaltyMatch is unable to communicate clearly in a few sentences the crux of what his company enables. I would have expected him to have long long ago polished his 30 second elevator pitch.

Here's my stab: LoyaltyMatch wants you to redeem your miles/points for physical merchandise, and plans to make money by charging listing fees for the resale/exchange of that physical merchandise for other merchandise. Programs may choose to tolerate LoyaltyMatch's existence if the negotiated cost of merchandise to them is less than the amount they can take off their financial books for the redemptions of miles/points. To the extent that LoyaltyMatch facilitates and encourages such redemptions, its marketplace may actually prove financially beneficial to the companies.

The companies running said programs may also realize that for them to claim it is invalid for John Smith to do whatever he wants with a flat screen television would go against most people's notions of property rights, notions that are much clearer for physical merchandise than for contracts for future air transport (plane tickets). If they were to enforce their T&C's in such a case, and somebody were to then challenge them in court, that just might set a precedent that they wouldn't want to have set.

Concensus on FT is that redemption for merchandise is a bad value. Bad value for us probably translates to fantastically good value to the programs. Most of us won't find LoyaltyMatch compelling. But some folks out there may find it a good use for some of their miles/points.

I don't see it this way at all. Sure, they expose the merchandise redemption aspect that the programs offer, and that part is almost certainly amenable to - ever encouraged by - the airlines as they do get the best value there. But the title of their home page is "Convert your loyalty points to cash with LoyaltyMatch" and I cannot see how the airlines permit this as a reasonable redemption.

If the airlines approve it (and I asked that previously and it remains unanswered) then that's great. But I highly doubt that they do.

I am chuckling; I don't think that the OP meant "legal" in the sense of being subjected to criminal prosecution, I think that he meant "legal" in the sense of compliance with the T&C of the program.

Otherwise, good points. It seems clear that this program violates the T&C of most or all loyalty programs. One can come up with some pretty good spin (and pshuang did -- funny indeed that it's better than that of the company founder), but none of that changes the fact that one is simply using such a program (or CC of FT) to sell or barter loyalty points.

Most of us on FT should be happy about the existence of such T&C, because, although it makes it harder to redeem our own points, imagine how much of an order of magnitude the value of points would be further diluted if they were truly liquid on an open market. Yikes.

I agree with you - very odd that he skirted your fair and direct questions. Hopefully he will come back and answer them.

I am curious what you think specifically of the comparison of LoyaltyMatch to CC, some of which I outlined in my post #16 above. I think your points about LM are dead on, but I also see little distinction between LM and CC (other than the functionality and specific method of matchmaking).

Do you think this is a safe assumption? If points were openly and readily traded for cash, I would think demand for them would increase, and possibly offset (or even more than offset) any decline caused by the effect of increased redemptions (and presumably, less availability). In theory, all that is happening is an increased efficiency of the system.

I agree with you on the analysis of CC. I do not believe that it is any more legit in the eyes of the T&C of the programs for typical trades. I have used it to gift transferable items and appreciate its value in those circumstances.

Awesome post! Once again, FT members show exceptional insight. You just can't put anything over on FTers.

Another great point. I've explained this several times on the Southwest forum. Whenever someone redeems an award for trip that they would otherwise have bought at the prevailing fare, it costs the airline money. When you redeem for an award you would never have paid the prevailing fare for, that costs the airline very little. The airlines want to minimize redemptions in the first category. Any service that helps people make redemptions in the first category hurts the airlines.

Extending this point, we often see posts to the effect of "Why shouldn't airlines release award seats as soon as it's clear the flight will not fill up? What's the point of leaving seats empty while not allowing award redemption?" The answer comes from the preceding paragraph: The airline does not want you to use an award for a trip that you would otherwise purchase at a high fare. They want you to buy a ticket. Last-minute award bookings are rarely of the discretionary "never would have paid the cash fare for it" type. Most of these last-minute award bookings cost the airline money. That's why the flights leave with empty seats but zero award availability.

....just curious how many people signed up for the call?

I am. I am interested in hearing their side of the story in regards to compliance w/T&C of the various programs.

is there an official date for the call? I am eager to learn more

Concur. Airlines have extremely strong incentive to go after principals and intermediaries who attempt to create large liquid marketplaces for frequent flier program flight award redemptions, because it could severely interfere with the ability of their yield management folks to maintain price discrimination against those are price insensitive, generally thought of as the business traveler market although not all price insensitive travelers are business travellers and not all business travellers are price insensitive. Whether the airlines will want to go after the principals and intermediaries who are creating a liquid marketplace to convert miles to merchandise at not particularly expensive rates (thus allowing the airlines to clean up their books at a relatively low cost) remains to be seen.

Other related thoughts: I can see the close-in award fees (which don't make much sense as a service fee since it doesn't take more effort for the customer service agent to ticket you for tomorrow than for 15 days from now) as an attempt to reduce the profitability of resold flight award redemptions. The airlines can go after the big operations, but they know they cannot very effectively go after the smaller operations. Also, as another example, the United DBC FREE vouchers issued for voluntary denied boarding, in addition to being restricted to redemption only on flights with W,Q,V fare basis availability, also cannot be redeemed for a round trip departing within 2 weeks of the ticketing date. I can imagine this specific T&C might have been put in to make these vouchers much less valuable for resale to last-minute price insensitive travelers, while still quite valuable to the use that United hopes you'll put them to, namely to redeem the vouchers for a holiday round trip that you otherwise wouldn't have consumed at United's asking price.

I have no intentions of jumping onto the LoyaltyMatch bandwagon as a participating customer, because I get much better value out of my miles and points when not redeeming them for merchandise.

But here's the idea that sort of makes sense to me -- suppose I redeem 50,000 points in Program A for Toy A, and you redeem 100,000 points in Program B for Toy B. Program A's sponsor must think that they can provide me with Toy A at a reasonable cost to them (relative to 50,000 A points); siomilarly, Program B's sponsor must think they can provide you with Toy B at a reasonable cost to them (relative to 100,000 B points). At that point, should either Program A's sponsor or Program B's sponsor really care about whether I take Toy A and drop it into my local landfill, and/or whether you take Toy B and drop it into your local incinerator? Or that we trade toys with each other? Or that we sell them at our local garage sale or on an online marketplace, thus converting them into cash? Does it matter to them at all?

Well, perhaps they should care to the extent that if either one of us finds something to do with the toys that we enjoy or benefit from, we'll be more inclined to redeem our respective points for the respective toys. So if Program A's sponsor was anticipating 100 redemptions a month (each redemption at this expected level being expected to be a net benefit to them) but instead sees 200 redemptions a month, is that really a problem? Sure, at crazy high redemptions levels (say 100x their expectation, or 10,000 redemptions a month), Program A's sponsor might have to spend a lot more to acquire the 10,000th toy, or Program A's sponsor might have to take into account that they've erased such a huge number of points from their books that the marginal accounting benefit to them for erasing yet more points has changed. But that's easy for the sponsor to deal with -- they can change the redemption level for Toy A, or simply eliminate from their catalog altogether with the dreaded text "UNAVAILABLE AT THIS TIME - CHECK BACK LATER". And note making the toy unavailable for redemption doesn't interfere with the sponsor's supposedly primary business purpose of providing travel-related services, so yield management and maintaining price discrimination doesn't come into play.

If LoyaltyMatch can sucker pseudo-journalists like Tim Winship into saying ga-ga positive things about this, whereas he's pretty unrelentingly negative about anything that the programs themselves put out, why not quietly tolerate the business and whatever modest increased redemption activity levels it can create?

The fees could also be in place simply because customers are willing to pay them to avoid the typically higher near-term fares.

The problem is almost certainly NOT the merchandise redemption. The problem is the fact that LoyaltyMatch's business model is predicated on facilitating the trade of points for cash. This is what they have on their website (emphasis mine):
They talk about merchandise and such, but that is just misdirection to distract from the real focus of their program.

I'm sure that the "deals" they set up for direct redemption from the programs for merchandise are 100% legit (and aren't really worth the $2 transaction fee, assuming that is charged on a direct redemption for self). But the "deals" they are doing for cash are almost certainly violations of the T&C, regardless of what they say here.