How Rewarding Are Your Rewards?

February 28, 2014

I read this article about Delta Airlines’ changes to their frequent flyer program. Actually, it’s no longer accurate to call airline rewards programs “frequent flyer” programs.  The trend in the airline industry is moving away from rewarding people for number of flights and/or miles flown in favor of rewarding travelers for dollars spent. In essence, they are morphing into “expensive flyer” programs.  As someone who flies a lot for work, this article resonated with me. 

I use Southwest as my primary airline since my home airport is a major hub for them and their prices are very low. I also enjoy the zany humor that you can get periodically on Southwest.  On a recent trip, the flight attendant making the announcements said “Federal law prohibits tampering with the smoke detector or the WEBCAM in the lavatories.” That line had me laughing for days. (OK, I might need a hobby….)

Southwest changed their rewards program to a dollars spent program a few years ago. From a business standpoint, these changes make a lot of sense.  Reward what you want to see more of and provide no incentive for behaviors you don’t want to see.  The Federal government does this with subsidy programs and taxes, and businesses do the same thing.

From a personal standpoint, if you have frequent flyer miles (or whatever your rewards program calls it), now would be the time to review your account to determine what the changes in many of these programs mean to you. I have a friend who would occasionally spend a day flying across the country and back on a very low priced ticket just to qualify for the top tier reward from his airline. He would go from East Coast to West Coast in the morning, spend a day in LA or San Francisco and then fly back that night.

It was a long trip for lunch, but the miles flown would give him extra rewards for the rest of the year.  It seemed like a good deal to him.  He won’t have to do that anymore.

What can you do as a part of your “rewards review”?

  • Check all your frequent flyer programs to make sure you aren’t losing any benefits as a result of changing rules.
  • Review any and all rewards programs in which you participate.  Many programs have expiration dates on benefits.
  • If you’ve received gift cards for your birthday, Christmas or any other occasion, check for expiration dates.  You can also buy or sell gift cards on many websites now to either buy at a discount or sell cards you won’t use.
  • If you’ve bought things on Groupon or LivingSocial or any other web based discount site, make sure you use it before you lose it.

With a quick review, you can make sure that any rewards or discounts that you are entitled to receive don’t get lost.  In this world where every dollar counts, count your dollars.  Otherwise, those rewards might not be as rewarding as you thought.