My fiance is a member of the American iDine program www.aa.rewardsnetwork.com and I am a member of the Northwest version at www.nwa.rewardsnetworks.com.

She's a Tier 1 and I will be Tier 2 in July.

We noticed that some resturants weren't in both the AA and NWA programs despite being both in the overall Rewards Network program.

Is this odd?

We, the diners here, have commented that it is odd.

A company rep, with whom I discussed this matter once, did not see anything odd about it all.

Dear Garlin,

Thank you for writing The AAdvantage Dining program and AAdvantage Hotel
program!

Rewards Network manages multiple dining programs. Some restaurants are
excluded from certain programs because they choose not to do so.

We appreciate your continued patience. Please feel free to contact me
with any further questions or concerns.

Sincerely,
Mark Blackwood
The AAdvantage Dining Program and AAdvantage Hotel Program Internet
Services
[email protected]

During the Holiday season (2003) we chose to eat at a rather expensive restaurant in Mauii. There were 4 of us and as I recall the bill was between $200 and $300. When it didn't post I called Idine. I was told that that restaurant did not participate with the airline I thought it would. I believe the airline was UAL.

I was told that each restaurant owner could choose which airlines to be involved with. Never made sense to me. Like a restaunteur knows enough about airlines to determine which to exclude? That seems pretty far fetched!

That lesson also reinforced the need to check each restaurant with the individual idine website. I think Idine really complicated the program when it made this move.

No wonder so many folks just don't want to be bothered with the program.

With the limited information I have about how Rewards Network works, I'd have to not make a judgment. But I can see how some restaurants might opt out - locally (near SMF) we have lots of AA and UA flights, some DL, few NW and CO flights. If there's a cost associated, it may be a restaurateur may decide to eschew certain airlines due to the (even if merely perceived) predicted lack of customers.

Can anyone illuminate what a restaurant pays for Rewards Network membership and benefits?

It could also be that there are different cost structures related to different airlines, and the restaurants choose based on that rather than the name of the airline.

For example, AA has for years had the elite bonus of giving out 500 bonus miles per month (previously based on 3 dines, now on $150 worth of dining). Some other airlines don't have this kind of constant bonus, and thus with them restaurants don't have to award as many miles per $ ON AVERAGE as with AA (IF a significant number of their AA diners are AA elites).

There are also many short-term bonus differences. Right now:

- AA requires $15 minimum for a 250 bonus miles per dine, but the number of dines in the bonus period is unlimited.

- UA has no minimum for up to 3000 bonus miles for 8 dines, but no bonus for more than 8 dines.

- BA has something similiar to UA, except it also adds a $25 minimum!

A very cheap restaurant may have a lot of UA bonuses portioned out but exteremely few BA bonuses. IF they have to pay some way for such bonuses, BA miles might be cheaper for them. But an expensive restaurant might have the opposite cost structure during these months if bonus mile costs are (at least in part) somehow passed on to them.

This is interesting, but you are apparently assuming that participating restaurants have to pay for at least part of bonuses such as the AA 500mi/month one, etc. Do you know that for a fact? I've been assuming the airline and/or Rewards Network eat the cost of any bonuses, but that's just a big fat assumption on my part.

If you go to their web site, they spell it out quite nicely in their annual report:
http://content.idine.com/pr/rn/inves...ual_Report.pdf

I believe, back in the old days, when they offered 10 mi/$ or 20% back across the board (with some restos at 20 mi/$ or 40% back), for the base rate, they received 40% of the revenue. If restos wanted to add any more, they just paid that straight to the consumer. So for 40% back, iDine would take 60% and pass on 40%.

Now there are two types of resto programs: marketing credit and marketing service. With the marketing credit program, RN actually gives the restaurant cash up front, essentially purchasing meals at at discount. RN then gets a credit with the resto. Then when a customer goes to the resto, RN takes X% of the revenue and offsets the credit they already built up. For 2004, X% seems to be close to 75%. Now of that amount, it appears that RN has already paid out about 50% of that in marketing credits. So here's how the breakdown would work. RN gives Restaurant A $1500 and gets $3000 in marketing credits in return. For the next $4000 the restaurant does in RN customers, RN gets 75% (or $3000). So essentially RN gets about 37.5% of the revenues. Obviously

For the marketing service program, RN pays nothing upfront and just gets Y% of revenue the resto gets from RN customers. For 2004, this appears to be about 24%.