Frequent flier miles are so easy to earn, they might as well give them away. Buying an airline ticket on the Internet? Here’s a thousand miles. Charging something on your credit card? Every dollar’s good for a mile. Switching long-distance phone carriers? There’s 10,000 miles, thanks very much.
But redeeming the points for a seat on a plane is becoming increasingly difficult. Airlines, hotels and car rental agencies have quietly tightened their minimum award levels or added new blackout dates in an effort to boost sagging profits. Travelers are more frustrated than ever. The system is out of order and it’s time for the federal government to review, if not regulate, these seductive rewards.
The breaking point came last week, when two events – one widely reported, the other almost completely overlooked by the mainstream press – brought the issue into sharp focus.
Over the weekend, users of a Web site called AutoMall Online discovered a glitch that allowed them to collect 62,000 free points when they transferred their balance to a Hilton HHonors account. What surprised many who heard about the electronic hiccup wasn’t how many miles were pilfered, but the attitude with which frequent travelers collected these rewards. They acted as if they were entitled to the gratis miles, claiming the points without remorse and then boasting about their misdeeds on several Internet discussion lists.
“They wanted something for nothing,” says Hilton spokeswoman Jeanne Datz. “It was really amazing.” (The bug was fixed last week and the stolen miles were debited from the affected accounts.)
Los Angeles Psychiatrist Mark Goulston describes this behavior as “mileage hoarding” and compares the travelers who snagged the 62,000 miles to junkies looking for a hit. “When you do something like that, there’s a thrill – an adrenaline rush,” says the author of the book Get Out of Your Own Way: Overcoming Self-Defeating Behavior “You’ve beat the system. It’s like winning the lottery.”
But it wasn’t meant to be like this – a very large metaphorical carrot and an impossibly long stick. When American Airlines established the first frequent flier program in 1981, it wanted to reward passengers for their patronage and encourage them to come back soon, not create a new class of compulsive mileage collectors. However, the travel companies that offer mileage programs have known for a while that the points don’t work the way they were meant to.
Consider the case of David Phillips, a Davis, Calif., civil engineer who bought $3,140 worth of diet pudding cups and redeemed the coupons on the boxes for 1.25 million frequent flier miles. Phillips became an overnight media star for figuring out how to beat the system, yet he didn’t have to set foot on a plane to become an elite frequent flier. There was no loyalty, no patronage. He was just very good at hoarding miles.
All of this is overshadowed by a second event. Last week, the Internal Revenue Service announced that frequent flier miles earned from business travel won’t be taxed as income. A 7.5 percent excise tax on the sale of miles had gone into effect on October 1, 1997, with the implementation of the Taxpayer Relief Act. The reason for the government’s reversal: rewards programs were so complex that even a federal agency renowned for its bureaucracy couldn’t understand them.
So what we’re left with is a system that doesn’t work the way it’s supposed to, that compels travelers to engage in destructive – and even illegal – behavior, and that’s so confusing that the government doesn’t want to get involved in it.
How to fix the mess? Maybe the government should get involved, not in taxing miles, but in regulating how we can convert the points into a ticket, hotel room or rental car. There’s a huge backlog of unredeemed frequent flier miles (at last count, the number stood at about six trillion miles) waiting to be used. The travel industry is holding the miles hostage in a prison of red tape and fine print. That’s wrong.
Only the government can end this madness and restore a sense of order to a system that’s almost broken beyond repair. It can start by making the travel industry keep the promises we thought it made to us when we enrolled in its frequent flier programs.
Frequent flier miles are so easy to earn, they might as well give them away. Buying an airline ticket on the Internet? Here’s a thousand miles. Charging something on your credit card? Every dollar’s good for a mile. Switching long-distance phone carriers? There’s 10,000 miles, thanks very much.
But redeeming the points for a seat on a plane is becoming increasingly difficult. Airlines, hotels and car rental agencies have quietly tightened their minimum award levels or added new blackout dates in an effort to boost sagging profits. Travelers are more frustrated than ever. The system is out of order and it’s time for the federal government to review, if not regulate, these seductive rewards.
The breaking point came last week, when two events – one widely reported, the other almost completely overlooked by the mainstream press – brought the issue into sharp focus.
Over the weekend, users of a Web site called AutoMall Online discovered a glitch that allowed them to collect 62,000 free points when they transferred their balance to a Hilton HHonors account. What surprised many who heard about the electronic hiccup wasn’t how many miles were pilfered, but the attitude with which frequent travelers collected these rewards. They acted as if they were entitled to the gratis miles, claiming the points without remorse and then boasting about their misdeeds on several Internet discussion lists.
“They wanted something for nothing,” says Hilton spokeswoman Jeanne Datz. “It was really amazing.” (The bug was fixed last week and the stolen miles were debited from the affected accounts.)
Los Angeles Psychiatrist Mark Goulston describes this behavior as “mileage hoarding” and compares the travelers who snagged the 62,000 miles to junkies looking for a hit. “When you do something like that, there’s a thrill – an adrenaline rush,” says the author of the book Get Out of Your Own Way: Overcoming Self-Defeating Behavior “You’ve beat the system. It’s like winning the lottery.”
But it wasn’t meant to be like this – a very large metaphorical carrot and an impossibly long stick. When American Airlines established the first frequent flier program in 1981, it wanted to reward passengers for their patronage and encourage them to come back soon, not create a new class of compulsive mileage collectors. However, the travel companies that offer mileage programs have known for a while that the points don’t work the way they were meant to.
Consider the case of David Phillips, a Davis, Calif., civil engineer who bought $3,140 worth of diet pudding cups and redeemed the coupons on the boxes for 1.25 million frequent flier miles. Phillips became an overnight media star for figuring out how to beat the system, yet he didn’t have to set foot on a plane to become an elite frequent flier. There was no loyalty, no patronage. He was just very good at hoarding miles.
All of this is overshadowed by a second event. Last week, the Internal Revenue Service announced that frequent flier miles earned from business travel won’t be taxed as income. A 7.5 percent excise tax on the sale of miles had gone into effect on October 1, 1997, with the implementation of the Taxpayer Relief Act. The reason for the government’s reversal: rewards programs were so complex that even a federal agency renowned for its bureaucracy couldn’t understand them.
So what we’re left with is a system that doesn’t work the way it’s supposed to, that compels travelers to engage in destructive – and even illegal – behavior, and that’s so confusing that the government doesn’t want to get involved in it.
How to fix the mess? Maybe the government should get involved, not in taxing miles, but in regulating how we can convert the points into a ticket, hotel room or rental car. There’s a huge backlog of unredeemed frequent flier miles (at last count, the number stood at about six trillion miles) waiting to be used. The travel industry is holding the miles hostage in a prison of red tape and fine print. That’s wrong.
Only the government can end this madness and restore a sense of order to a system that’s almost broken beyond repair. It can start by making the travel industry keep the promises we thought it made to us when we enrolled in its frequent flier programs.
Christopher Elliott is the author of Scammed: How to Save Your Money and Find Better Service in a World of Schemes, Swindles, and Shady Deals. Critics have called it “eye-opening” and “inspiring” — it’ll “grab your attention and won’t let go.” Order your copy now on Amazon, Barnes & Noble or iTunes.
What's the book corporate America doesn't want you to read? Find out now -- or you could get scammed. 
Elliott is consumer advocate Christopher Elliott's site. You'll find everything you need here to fix your travel-related problems. For all other consumer grievances, please see On Your Side.
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What is the point?
February 25, 2002
Frequent flier miles are so easy to earn, they might as well give them away. Buying an airline ticket on the Internet? Here’s a thousand miles. Charging something on your credit card? Every dollar’s good for a mile. Switching long-distance phone carriers? There’s 10,000 miles, thanks very much.
But redeeming the points for a seat on a plane is becoming increasingly difficult. Airlines, hotels and car rental agencies have quietly tightened their minimum award levels or added new blackout dates in an effort to boost sagging profits. Travelers are more frustrated than ever. The system is out of order and it’s time for the federal government to review, if not regulate, these seductive rewards.
The breaking point came last week, when two events – one widely reported, the other almost completely overlooked by the mainstream press – brought the issue into sharp focus.
Over the weekend, users of a Web site called AutoMall Online discovered a glitch that allowed them to collect 62,000 free points when they transferred their balance to a Hilton HHonors account. What surprised many who heard about the electronic hiccup wasn’t how many miles were pilfered, but the attitude with which frequent travelers collected these rewards. They acted as if they were entitled to the gratis miles, claiming the points without remorse and then boasting about their misdeeds on several Internet discussion lists.
“They wanted something for nothing,” says Hilton spokeswoman Jeanne Datz. “It was really amazing.” (The bug was fixed last week and the stolen miles were debited from the affected accounts.)
Los Angeles Psychiatrist Mark Goulston describes this behavior as “mileage hoarding” and compares the travelers who snagged the 62,000 miles to junkies looking for a hit. “When you do something like that, there’s a thrill – an adrenaline rush,” says the author of the book Get Out of Your Own Way: Overcoming Self-Defeating Behavior “You’ve beat the system. It’s like winning the lottery.”
But it wasn’t meant to be like this – a very large metaphorical carrot and an impossibly long stick. When American Airlines established the first frequent flier program in 1981, it wanted to reward passengers for their patronage and encourage them to come back soon, not create a new class of compulsive mileage collectors. However, the travel companies that offer mileage programs have known for a while that the points don’t work the way they were meant to.
Consider the case of David Phillips, a Davis, Calif., civil engineer who bought $3,140 worth of diet pudding cups and redeemed the coupons on the boxes for 1.25 million frequent flier miles. Phillips became an overnight media star for figuring out how to beat the system, yet he didn’t have to set foot on a plane to become an elite frequent flier. There was no loyalty, no patronage. He was just very good at hoarding miles.
All of this is overshadowed by a second event. Last week, the Internal Revenue Service announced that frequent flier miles earned from business travel won’t be taxed as income. A 7.5 percent excise tax on the sale of miles had gone into effect on October 1, 1997, with the implementation of the Taxpayer Relief Act. The reason for the government’s reversal: rewards programs were so complex that even a federal agency renowned for its bureaucracy couldn’t understand them.
So what we’re left with is a system that doesn’t work the way it’s supposed to, that compels travelers to engage in destructive – and even illegal – behavior, and that’s so confusing that the government doesn’t want to get involved in it.
How to fix the mess? Maybe the government should get involved, not in taxing miles, but in regulating how we can convert the points into a ticket, hotel room or rental car. There’s a huge backlog of unredeemed frequent flier miles (at last count, the number stood at about six trillion miles) waiting to be used. The travel industry is holding the miles hostage in a prison of red tape and fine print. That’s wrong.
Only the government can end this madness and restore a sense of order to a system that’s almost broken beyond repair. It can start by making the travel industry keep the promises we thought it made to us when we enrolled in its frequent flier programs.
Frequent flier miles are so easy to earn, they might as well give them away. Buying an airline ticket on the Internet? Here’s a thousand miles. Charging something on your credit card? Every dollar’s good for a mile. Switching long-distance phone carriers? There’s 10,000 miles, thanks very much.
But redeeming the points for a seat on a plane is becoming increasingly difficult. Airlines, hotels and car rental agencies have quietly tightened their minimum award levels or added new blackout dates in an effort to boost sagging profits. Travelers are more frustrated than ever. The system is out of order and it’s time for the federal government to review, if not regulate, these seductive rewards.
The breaking point came last week, when two events – one widely reported, the other almost completely overlooked by the mainstream press – brought the issue into sharp focus.
Over the weekend, users of a Web site called AutoMall Online discovered a glitch that allowed them to collect 62,000 free points when they transferred their balance to a Hilton HHonors account. What surprised many who heard about the electronic hiccup wasn’t how many miles were pilfered, but the attitude with which frequent travelers collected these rewards. They acted as if they were entitled to the gratis miles, claiming the points without remorse and then boasting about their misdeeds on several Internet discussion lists.
“They wanted something for nothing,” says Hilton spokeswoman Jeanne Datz. “It was really amazing.” (The bug was fixed last week and the stolen miles were debited from the affected accounts.)
Los Angeles Psychiatrist Mark Goulston describes this behavior as “mileage hoarding” and compares the travelers who snagged the 62,000 miles to junkies looking for a hit. “When you do something like that, there’s a thrill – an adrenaline rush,” says the author of the book Get Out of Your Own Way: Overcoming Self-Defeating Behavior “You’ve beat the system. It’s like winning the lottery.”
But it wasn’t meant to be like this – a very large metaphorical carrot and an impossibly long stick. When American Airlines established the first frequent flier program in 1981, it wanted to reward passengers for their patronage and encourage them to come back soon, not create a new class of compulsive mileage collectors. However, the travel companies that offer mileage programs have known for a while that the points don’t work the way they were meant to.
Consider the case of David Phillips, a Davis, Calif., civil engineer who bought $3,140 worth of diet pudding cups and redeemed the coupons on the boxes for 1.25 million frequent flier miles. Phillips became an overnight media star for figuring out how to beat the system, yet he didn’t have to set foot on a plane to become an elite frequent flier. There was no loyalty, no patronage. He was just very good at hoarding miles.
All of this is overshadowed by a second event. Last week, the Internal Revenue Service announced that frequent flier miles earned from business travel won’t be taxed as income. A 7.5 percent excise tax on the sale of miles had gone into effect on October 1, 1997, with the implementation of the Taxpayer Relief Act. The reason for the government’s reversal: rewards programs were so complex that even a federal agency renowned for its bureaucracy couldn’t understand them.
So what we’re left with is a system that doesn’t work the way it’s supposed to, that compels travelers to engage in destructive – and even illegal – behavior, and that’s so confusing that the government doesn’t want to get involved in it.
How to fix the mess? Maybe the government should get involved, not in taxing miles, but in regulating how we can convert the points into a ticket, hotel room or rental car. There’s a huge backlog of unredeemed frequent flier miles (at last count, the number stood at about six trillion miles) waiting to be used. The travel industry is holding the miles hostage in a prison of red tape and fine print. That’s wrong.
Only the government can end this madness and restore a sense of order to a system that’s almost broken beyond repair. It can start by making the travel industry keep the promises we thought it made to us when we enrolled in its frequent flier programs.
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