Are loyalty programs worth belonging to?

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By Christopher Elliott

It’s time to question one of the most basic tenets of travel: Everyone should participate in an airline loyalty program.

A tectonic shift in the world of travel rewards is forcing passengers to reconsider their allegiances — or whether it’s worth being loyal at all. Given the already hopelessly convoluted nature of these programs, I’m surprised it took so long.

Frequent fliers have been hardest hit. In recent months, both Delta Air Lines and United Airlines revised their programs so that only the biggest spenders get the best perks. Soon, flying often won’t be enough to reach an airline’s coveted elite status. Expect more companies to follow.

Elite travelers reevaluate loyalty programs amid changes

Experienced travelers are taking a hard look at their loyalty portfolios. They don’t always like what they see.

David Deehl, an attorney who lives in Miami, says he feels betrayed by recent loyalty program changes. As an elite-level traveler, he expects preferred treatment from his preferred carrier, Delta Air Lines. But when he missed a recent flight from Miami to London, he discovered his Silver Medallion status didn’t mean much: The airline asked him to pay an extra $3,400 to fly.

Delta’s revamped program, which, starting next year, awards elite status based on the amount of money spent and miles flown, makes it significantly harder to maintain Deehl’s Medallion status. It represented the final straw, he says. He’s burning the 400,000 leftover SkyMiles in his account and vows to buy future tickets based on price and convenience, not whether he can maintain his elite status or score a “free” award ticket.

“No more loyalty for me,” he says.

The changing landscape of loyalty programs

His decision, and that of others like him, may have dramatic repercussions. For years, loyalty programs flourished, thanks to a conventional wisdom that everyone should carry a rewards card. The programs expanded at an alarming rate, as an unskeptical mainstream media and a small army of bloggers generously received compensation for promoting the loyalty lifestyle. They hawked a handful of bank-issued affinity credit cards with excessive point-bonus awards for which they received a generous commission check whenever a reader signed up.

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These program apologists will trot out their same tired reasons why you should always be loyal. The programs are free, they’ll say, and look at what I got by being faithful to my airline: a “free” ticket to Hawaii, or a “free” upgrade to business class.

It’s too easy to debunk these arguments. Loyalty programs aren’t free. At a minimum, members fork over their valuable personal data and spending history, which is shared with a company’s marketing partners. Worst-case scenario? You spend more — maybe a lot more — on travel in a wrongheaded effort to reach elite status or score a “free” ticket. If you use one of those pricey affinity cards, you’re also paying an annual fee to collect points that, as a matter of fact, don’t even belong to you.

Unraveling loyalty programs

Here’s what is true: A few people are benefiting from loyalty programs. This includes top-tier frequent fliers, usually traveling on their company’s dime. It also includes hobbyists who spend their free time figuring out a way to game the system.

Banks, which sell cards that award a mile for every dollar spent, and the cheerleading bloggers who promote them, are doing very well, too. But no one benefits more than the travel company. Loyalty programs seduce travelers into spending more. And for what? In exchange for your money and loyalty, for example, an airline doesn’t have to treat you much better than the average economy-class passenger in 1975 and doesn’t have to give you anything more than a seat that would have flown empty anyway.

Best of all, most companies can change their loyalty program rules at any time, for any reason. Not only are the points their property, but they can disappear out of your account overnight and with them, any future award ticket bookings.

I call that a scam.

Stuck in the loyalty dilemma

For some, it’s probably too late to leave. Consider Eric Brown, who owns a trading company in New York. After years of flying on Continental Airlines — now United Airlines — he has earned lifetime gold status. He is on the verge of achieving lifetime platinum-level elite status, thanks to its Million Miler program. He’s all-in with United, using a United Club Visa card, which offers 50% bonus miles on all purchases, double miles on his United tickets and airport club access. (Related: Why I love Delta’s new loyalty program, and why you’ll probably hate it.)

Yet, Brown says he’s disillusioned with the airline’s recent program changes. Securing upgrades on flights between the Newark and Beijing using his miles has become increasingly difficult and expensive. He says he’d like to sever ties with United, but he can’t. He’s in too deep. Besides, he doesn’t have much of a choice. (Here’s why loyalty programs make you spend more.)

“Where am I going?” he asks.

Frequent travelers such as Brown often tell me that if they had to do it all over again, they wouldn’t participate in the loyalty racket. They wonder why no one warned them of the risks. (Here’s what you need to know about loyalty programs.)

Well, that’s what I’m doing. To be clear: Everyone should not participate in a rewards program. Question your loyalties now, before you invest too much. Unless you’re ready to pay a travel company more money for the same limited and elusive perks, be prepared to board your flight with the rest of us in Zone 5 and take your seat in the back of the plane — next to me.

Are loyalty programs worth belonging to?

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Christopher Elliott

Christopher Elliott is the founder of Elliott Advocacy, a 501(c)(3) nonprofit organization that empowers consumers to solve their problems and helps those who can't. He's the author of numerous books on consumer advocacy and writes three nationally syndicated columns. He also publishes the Elliott Report, a news site for consumers, and Elliott Confidential, a critically acclaimed newsletter about customer service. If you have a consumer problem you can't solve, contact him directly through his advocacy website. You can also follow him on X, Facebook, and LinkedIn, or sign up for his daily newsletter.

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