Charles Engelke's Blog

May 6, 2004

Green stamps of the 21st century

Filed under: Vacation 2004 — Charles Engelke @ 9:08 pm

When I was a kid (in fact, even when I was a grad student), grocery
stores gave you green stamps with your purchase (or brown and yellow
plaid stamps if you shopped at Winn-Dixie). The more you
spent, the more stamps you got. You dumped the stamps into a
drawer, and when you decided you needed a new waffle iron, you
dragged them out, unstuck them from each other, and pasted them
into a book. If you had enough books, you took them to a
redemption center and traded them for your waffle iron.

“Waffle iron” isn’t just a random example. This is how I got the
waffle iron I still own.

Frequent traveler programs are today’s green
stamps. When you fly, you get “miles”. When you stay at a hotel,
you get points. With some American Express cards, you get points
whenever you buy anything with the card.

I belong to a lot of these frequent traveler programs. I’ve flown
more than a million miles on Delta, and tens of thousands of miles
on a variety of other airlines. I used to stay in hotel rooms about
a hundred nights a year, and I still stay more than 50 nights a year;
mostly in various Hilton-branded properties. And, because my
company changed its travel card policy a few years
ago and enrolled us all in American Express’s program to soften the
blow, I’ve got lots of “Membership Rewards” points.

Except for Delta Skymiles, I’d never redeemed a point on any of those
programs. I’ve used the Delta points to buy upgrades, to get a
ticket for my wife when she’s joined me on a business trip (and once
to get a ticket for me when I joined her on a business trip), and
even once to get a “free” ticket for a business trip when I couldn’t
upgrade on the least expensive fare. (I’m a big guy, coach seats
are tiny, and it’s a long way from Atlanta to Tokyo and back.)

I’ve never been completely comfortable with the whole idea of frequent
traveler programs. For one thing, my rewards come as the result of
spending that was mostly by my company or our clients, not in
return for my own expenditures. Shouldn’t the party paying the bills
get the rewards? For another, many of these programs deliberately
encourage employees to behave unethically by spending more of their
company’s or clients’ money than is really needed, in order to get
more points or other rewards. I’ve seen it go so far as to become
flat-out kickbacks; one hotel chain offered to give business
travelers a $50 bill every time they checked in.

But that’s all behind me now! I’ve tried to keep the programs from
creating a conflict of interest between my company and me, and after
all, I’ve spent a lot of time on the road for work, and I
might as well get some perks for it. So I decided to use all those
points I’ve accumulated over the years to cover lots of the travel
costs for my summer vacation. The core of the vacation is a northern
European cruise that we’re paying for, but we need to get from the
U.S. to Europe and back, and we need to stay at least one night in
a hotel over there. Surely my points could take care of those
costs, right?

Maybe not. There’s a big difference between frequent traveler programs
and good old green stamps. If you had enough green stamps, they’d
give you the waffle iron you wanted. If you have enough points,
you still often can’t get the items you’ve been promised. When
they refuse to let you redeem your points for a reward, it’s
not because they don’t have any of the reward items available. In
fact, they’ll usually tell you that you can always get what you
want just by using cash instead. I say this is classic “bait and
switch,” and it used to be illegal almost anywhere. It’s still
technically illegal, but nobody takes the possibility seriously.

I start looking for travel awards I need:

  • A pair of “open jaw” business class tickets from Atlanta to Stockholm, returning
    from London? Not available the days I wanted. Not available for
    a week either way. Just for kicks, I asked them to check for a
    month each way. Nope. Not available. Probably not ever
    available, because part of that trip would be on a Delta
    SkyTeam partner, and they hardly ever honor free ticket redemptions.
    Even though the theoretical ability to do just that is a big
    part of Delta’s sales pitch for SkyMiles.
  • A pair of round trip business class tickets from Atlanta to London and back?
    Nope, not any time anywhere close to when I needed them. That is,
    unless I wanted to redeem twice as many miles as the awards
    supposedly cost (for a total of 360,000 miles for two tickets).
    While I waited on hold with Delta, their recording reminded me that
    trips to Europe were very popular and free tickets would be hard
    to come by. So I should just buy my tickets instead.
  • A pair of round trip business class tickets from Atlanta to London
    and back, using Delta’s “partner airlines”, whatever that means
    (it’s not the same as SkyTeam)? Yes! We can
    fly Delta from Atlanta to Newark, then Continental to London, and
    non-stop Delta on the return. (And Continental’s Business First
    looks a lot better than Delta’s Business Elite. The seats are
    25% wider, for one thing.)

Of course, the dates available are adding a week to our vacation,
which could easily eat up the airfare savings with lodging costs.
Especially with the dollar so weak now, driving up the price of
hotels over there. Also, our cruise starts in Stockholm; we’re
going to have to get there from London. And it doesn’t look like
we can just drive it; there’s a lot of water in the way. So let’s
keep looking.

  • A Hilton hotel room in Stockholm? Yes! In fact,
    this was dead easy. I didn’t even have to talk to a person, just
    use the web site.
  • A Hilton hotel room in London? Forget it. Maybe 40 miles outside
    the city. Of course, every one of the many Hilton properties in
    and around London was available for cash.

Now we had to get from London to Stockholm. One way airfare is
about $900 each. But a round-trip is under $200 each. Typical
sensible airline behavior. We could buy the tickets… no we can’t.
Our mailing address has to be in the U.K. Well, Expedia has some
for only a bit more. But let’s keep trying free. I haven’t even
touched my American Express points yet.

  • American Express won’t let me get free tickets directly, only
    transfer points to airline programs to use to try to get free
    tickets. I’ve got a lot of clout with Delta, and I couldn’t
    get anywhere with them; I’m not going to get anything from British Airways
    if I just join it to push points into their program.
  • But Hilton points can be redeemed for British Airways tickets.
    And, it actually works! I get a pair of “free” tickets. Well,
    thanks to very high taxes that aren’t included in the awards,
    the free tickets still cost $60 each. But that’s 2/3 off! And
    all I had to do was call Hilton to find out the procedure, then
    call British Airways to see if I could redeem the award, then
    call Hilton to issue then award, then call British Airways to
    book the award. And then conference call Hilton and British
    Airways together to get the serial numbers of the issued awards
    for the final booking. How easy they made it!
  • I’m still homeless for three days in London. I think I’m going
    to have to really buy the hotel room, and they’re very expensive
    now. (£1.00 costs $1.80 today, and €1.00 costs $1.21.)
    I still have some hope; Hilton Diamond VIP level members can
    sometimes bypass the capacity controls. And I’m Diamond VIP.
    Oops. In the middle of searching for hotels, the Hilton page
    changes from calling me Diamond VIP down to Gold VIP. I didn’t
    stay at Hilton enough last year, and they chose this day to make
    the change effective. I called them, and I’ll be back to
    Diamond VIP as soon as I stay 15 nights in this quarter, which
    will happen in four weeks. So the only window where I won’t
    be Diamond VIP is the only time it would have ever helped to be
    Diamond VIP. I suppose I can wait and hope that it won’t be
    even harder four weeks closer to vacation time.
  • But wait! I see in the Wall Street Journal that Frequent
    Flyer magazine just gave awards for the best programs, and
    the Starwood program got top honors for something like the
    seventh year in a row because people say they can actually
    redeem their points for awards with them. I’m a member of
    Starwood’s program! But I have very few points… only a bit
    more than a tenth of what I’d need for a nicely located hotel
    they have in London. But American Express can convert my
    points to Starwood points, and I have just barely enough
    points to get the award. I call Starwood. Sure, they’ll reserve
    me a room for points. I just need to make the transfer within
    seven days, or they’ll cancel the reservation due to a lack of
    points. Back to American Express’s web site. The point transfer
    will take 3-5 business days. That’ll work out fine. But…
    before I can transfer any points, I have to “link” the to the
    Starwood account, and that will take 3-5 business days,
    too. Together, those steps are too long. But I call American
    Express, and they can do both parts at once, so I’m okay. And
    it doesn’t take 3-5 business days, it only took a couple of
    hours for the points to show up in my Starwood account.

So, I’ve done it. All my travel and lodging, except for the cruise
itself, is “free” (though the airlines insist on my paying a bunch
of fees that they call taxes, but which are probably just unbundled
costs). And I used my American Express, Hilton, and Starwood accounts
for the first time. And I’ve cleaned out my American Express
account, which is good, because I’m going to cancel it before the
renewal fee is due. I don’t use that credit card any more.

So are frequent traveler programs worth it? Well, so far as the
awards go, they usually aren’t worth much at all. A free
airplane ticket isn’t worth much if you can’t actually get it, and
even if you can get it, what’s it worth? The airlines charge lots
of different prices for the same tickets, apparently at random. And trying to get the
awards usually takes forever; most of a weekend and two
evenings in my case. With cash, I could have just had a travel
agent do all the research and comparisons. I may post my
opinions of the real cash value of points in each of these programs
sometime. I think I got the best value from Starwood, and second
best from Hilton for the hotel stay they would actually book. The
worst value was Hilton for the airplane tickets.

But the programs are worth joining even if you never redeem any
awards. Being a member of their program tells vendors that you
are a good potential customer going forward. Airlines treat you
better than they otherwise would. Hotels give you a late checkout
more easily than they might. Sometimes they’ll do even more than
that. The night before I was to check in to an Omni hotel near
Dallas, I signed up for their program and called them to make sure
the number was on my reservation. When I checked in, I was upgraded
to a nice suite, and got a free pot of tea, large glass of juice, and
muffins delivered to me each morning. My colleagues didn’t get
any of that; they hadn’t joined the program.

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