Us and Our Loyalty Programs: Who’s the Dupe?

By Robert McGarvey

A recent Harris survey – done for the American Institute of CPAs – raises troubling questions about our travel loyalty programs and us. The implication of those findings is that many of us aren’t redeeming the points and miles and they in fact may cost us money (net).

That’s on top of 2015 poll data out of Harris that raise a chewy question: Are we in fact getting real value out of loyalty points and miles?

Note: I am on record that airline miles are approaching null value. And I have been railing about this for some time.   And yet when I flew from Phoenix to Newark in April, for a professor’s retirement party, I did so on United miles – and I luxuriated in the free ride.

I also have a stash of miles in the Amex program, well over a quarter million.

So I am not opposed to rewards, I just am not that interested in accumulating them.

That’s why I am interested in what we see when we drill down into the Harris data. What do we think about airline rewards programs?  43% say they are very/somewhat useful – but 57% say they are a little bit/not useful at all.  In fact 32% say they aren’t useful at all.

27% say hotel rewards aren’t useful at all.  46% say they are very/somewhat useful.

29% say credit card travel rewards are not at all useful. 46% say they are very/somewhat useful.

Eyeball the math and – stunningly – in every case, a majority say that the damn things aren’t useful or only a little bit.

Who expected that?  Even a loyalty Grinch such as myself is surprised by the sagacity of the traveling public in this regard.

But it’s the recent CPA survey that highlights how useless points are to many of us. Said the CPAs: “ In their lifetime, 15 percent of Americans have paid for part or all of their trip with rewards points, compared to 14 percent who say they’ve taken a trip that has resulted in a credit card balance that could not be paid off by their next statement.”

The CPAs took aim at the “travel hacking” advice that lately has proliferated like kudzu in a Carolina summer, where the purported aim is to tell us how to travel for free, on points.  Hah. Said the CPAs: “A total of 12 percent say they have opened a credit card in order to obtain hotel or airline rewards while six percent have selected a more expensive flight or hotel to earn travel rewards points and six percent have taken a trip just to maintain or upgrade a rewards level. Despite those efforts, only seven percent of all Americans used rewards points to pay for any part of their last vacation – with only one in a hundred (one percent) paying for their entire trip using points.”

I’m surprised it’s 1 in 100 that gets a total freebie. On my Newark run I personally paid for three nights in a Hyatt, plus a lot of meals, say $750 total.  That is much more than I saved with the free airline ticket.

The CPAs continued: “in the last year alone, 14 percent of all Americans have suffered the negative financial consequences from their vacation travel, with 12 percent carrying a balance or paying interest on their credit card, three percent missing a payment or being charged a late fee and two percent going over the spending limit on their credit card while on vacation.”

Granted, we are business travelers. We are more sophisticated.

At least we should be.

And yet I continue to hear from many business travelers that I misunderstand the value of airline loyalty programs in particular – even though more experts say similar, that loyalty programs are an oldfashioned Times Square shell game where you cannot win.

Except of course sometimes you do.

I’ve enjoyed a lot of flights paid for with miles – even trips to Europe.

But here’s the thing: I no longer will do a thing to get miles.  If I have ‘em, I’ll spend ‘em, and be grateful for the deals. But I will not alter my behavior to get them.

Ditto for hotel rewards.

(I can’t comment on rental car rewards. I belong to no programs and can only recall one car rental in the past five years.)

As for credit cards, Amex gets most of my spend – but the rewards are just a perk.  I’ve stayed with Amex because it has excelled at service.  

Nobody is saying burn your loyalty cards. The message is this: Collect what rewards come your way in the ordinary course of your travels. Enjoy them when they come. But don’t do anything special to get them.

That’s how to win.