Article: Loyalty Program Devaluations Are Inevitable, But Not Giving Notice Is Poor Form

[AFF Editor]

Loyalty Program Devaluations Are Inevitable, But Not Giving Notice Is Poor Form is an article written by the AFF editorial team:

Loyalty Program Devaluations Are Inevitable, But Not Giving Notice Is Poor Form

It's inevitable that airline loyalty programs increase award costs from time to time, but to do so without giving advance notice is poor form.

www.australianfrequentflyer.com.au

You can leave a comment or discuss this topic below.

 

[ChrisFlyer]

I used to love United MileagePlus... but I haven't touched the program for years given the long line of changes. Etihad's latest changes (which even require a flight each year to keep points alive, not just earning / spending activity) are so terrible that I've gone from a top tier member in the program to one with no status and no miles - completely disengaged.

Even KrisFlyer's approach isn't great, especially given how the conversion rates from the banks to KrisFlyer have all worsened in recent times, and there's the mileage expiry on top. Having only ~3 weeks notice of changes isn't great.

I have access to so many reward programs that might look good on paper, but some have quite big red flags attached like these no notice changes. Many will disagree, but I genuinely find the most usable program to be QFF. Points are so easy to earn in Australia right across the board, and when it comes to spending them, the unwritten 'request a seat' feature is an absolute game changer. (Obviously, I'm at a status level where that's possible, but still.) When I know that my points aren't just going to suddenly become worth a lot less overnight, I feel comfortable earning more and holding more. There's a reason that Qantas Loyalty is usually more popular than the airline itself!

 

[Seat0B]

Etihad's latest changes (which even require a flight each year to keep points alive, not just earning / spending activity) are so terrible that I've gone from a top tier member in the program to one with no status and no miles - completely disengaged.

As I commented in another thread, now that Seat Son lives in Abu Dhabi rather than Dubai, I was looking at the status match offered by Etihad as it might have been more convenient to fly in and out of AUH rather than DXB. But this sort of thing really puts me off @ChrisFlyer and I probably won't bother now.

 

[bpmsmith]

Although it has been historic practice, I disagree with the notion that redemption charges should increase over time.

Points are generally earned based on distance travelled. If I take 10 Sydney-Adelaide return trips with QF in Y, I earn 24000 points. That is enough for a return award trip in Y. A 10% bonus.

If the redemption charge increases to say 36000 points, I would need to make 15 return trips, giving only a 6.7% bonus.

If the airlines increase the redemption charges, they should also increase the earning rates.

 

[odysseus]

Although it has been historic practice, I disagree with the notion that redemption charges should increase over time.

Points are generally earned based on distance travelled. If I take 10 Sydney-Adelaide return trips with QF in Y, I earn 24000 points. That is enough for a return award trip in Y. A 10% bonus.

If the redemption charge increases to say 36000 points, I would need to make 15 return trips, giving only a 6.7% bonus.

If the airlines increase the redemption charges, they should also increase the earning rates.

Agree with the above. I also never understood the rationale. That is because the underlying fares paying for the points earned have similarly increased over time. So they have earned more revenue to pay for those points.

Now, maybe lately more points have come from external sources than flights - but then I'd also expect them to have increased in cost over time as well. It appears to be double dipping when the cost to earn has gone up, as well as the cost to redeem.

 

[QantasGonza]

Agree with the above. I also never understood the rationale. That is because the underlying fares paying for the points earned have similarly increased over time. So they have earned more revenue to pay for those points.

Now, maybe lately more points have come from external sources than flights - but then I'd also expect them to have increased in cost over time as well. It appears to be double dipping when the cost to earn has gone up, as well as the cost to redeem.

Yes, of course it's double dipping. Qantas sell points to xyz bank and abc merchant who in turn reward their good customers with those points. Qantas banks that cash that they received from selling the points straight away & presumably earns interest on the money. The person receiving those points usually will keep them for a period of time before use - sometimes suffering a devaluation along the way. Why should that be? In my book it's unjustified. It's similar to gift cards that expire after a time. Is there any other industry that preys on identifiable loyal customers so shamelessly as do airlines via their FF programs? Talk about over promising and under delivering!

 

[QantasGonza]

Although it has been historic practice, I disagree with the notion that redemption charges should increase over time.

Points are generally earned based on distance travelled. If I take 10 Sydney-Adelaide return trips with QF in Y, I earn 24000 points. That is enough for a return award trip in Y. A 10% bonus.

If the redemption charge increases to say 36000 points, I would need to make 15 return trips, giving only a 6.7% bonus.

If the airlines increase the redemption charges, they should also increase the earning rates.

If points have a certain dollar value when earned what justification is there that enables them to be devalued? I'm glad that our AUD hasn't fallen at the same rate!
In the years leading up until recent price rises it seemed to me that cash prices for tickets rarely changed other than seasonally or even appeared to get cheaper in some instances whilst points were harder to use and surcharges blunted the overall benefit anyway when you did score a classic reward or equivalent