When James Barbeau decided to use some of his wife’s Southwest Rapid Rewards miles, he visited the Southwest website and successfully transferred 40,000 miles from her account to his. He claims he was shocked to see a $400 charge appear on his credit card statement for the transfer and wants his money back.
Barbeau first appealed to Southwest Rapid Rewards for his refund, but the company refused, stating that “transferred funds are nonrefundable and nonreversible,” and that “the terms must be upheld in order to maintain the integrity of our program.”
The price of transferring miles?
Barbeau didn’t appeal to the contacts we list on our website for Southwest Airlines — instead, he contacted us and asked us to help answer a few questions and to obtain a refund of the fees:
1. What is Southwest trying to do….make a profit to unwitting customers…strongly discourage the transfer of points?
2. Fee is way too high whatever the reason. Getting the whole amount back would be preferable, but a small fee would be acceptable.
3. Change the wording of the transfer points to explain at the outset what kind of fee should be expected. I can’t believe that others have not been “stung” by this process.
We wouldn’t help Barbeau with the refund request because we don’t typically take cases that involve frequent flier miles, but we can answer his questions and help other consumers avoid his mistakes.
Is Southwest trying to make a profit?
The answer to Barbeau’s first question is obvious: Yes, Southwest Airlines is trying to make a profit. After all, this is why it is in business, But I disagree with Barbeau’s assessment that the company profits off of “unwitting customers.”
The terms of the Southwest Rapid Rewards program are almost identical to the rules of other airlines’ frequent flier programs. The miles are owned by the airline, not the traveler: “Rapid Rewards Members do not acquire property rights in accrued points and awards.”
The membership terms include the requirement that each traveler have his or her own account, “Membership in the Rapid Rewards program will be granted by Southwest Airlines and is for individual travelers only. Individuals must enroll separately and may not pool or combine points with other Members.” This rule alone provides evidence that account balances cannot be seamlessly shared.
But further down the membership rules page, Southwest specifically addresses the question of whether or not travelers must pay to transfer miles:
A Member has the ability to transfer Rapid Rewards Points to another Member or a preselected charity chosen by Southwest with an active Rapid Rewards account. Costs to transfer points to another Member must be paid for with a credit card, and transfers can be made through Southwest.com…. Point value will be quoted in USD and transactions will be settled in USD.
Cost of transferring miles explained
Even if Barbeau didn’t read the membership rules on the Southwest website, the Rapid Rewards page used to transfer miles clearly shows the cost of the mileage transfer when a traveler selects the number of miles he wants to transfer.
And of course a credit card entry and approval page appears before the transaction is complete. Southwest charges $0.01 per mile transferred. That’s less than the amount some other airlines charge, so I disagree with Barbeau’s claim that the fee is “too expensive.” But the number of miles he transferred is excessive.
As pointed out in Southwest’s own forum, it would have been significantly cheaper for Barbeau to use his wife’s mileage account to issue the ticket he needed rather than transfer those miles to his account and then issue the ticket. In many cases, paying cash for a Southwest ticket is even cheaper than paying for the points transfer.
While I think that airlines charge too many fees for too many things, those fees are unlikely to go away anytime soon. The key to ensuring you don’t pay too much or pay for things you don’t want to pay for is to educate yourself and pay attention. Before you click “submit,” read the details of what you’re submitting. If you enter your credit card information, make sure you know how much you’re paying before you hit “send.”