This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. For an explanation of our Advertising Policy, visit this page.
TPG reader Adam emailed me to ask about buying discounted travel:
“What do you think of buying airfare from a points and miles broker?”
In January, I cautioned readers against selling travel rewards to mileage brokers, but when Adam’s question showed up in the TPG inbox, I realized I hadn’t addressed the other side of the equation.
The most valuable award redemptions (on a per-point basis) tend to be for premium flights and top-tier hotels. When a first-class flight that normally costs $12,000 can be had for 70,000 points and around $500 in taxes and fees (rates are a hair higher after Aeroplan’s recent devaluation), there’s tremendous value to be found. Even if you wouldn’t be willing to pay the normal cost, it’s clear that award travel creates opportunities to explore the world in ways that might otherwise be unaffordable.
Mileage brokers capitalize on this by purchasing points and miles (generally for much less than what they’re worth), and then selling premium awards at a steep discount from the retail price. For example, a broker might pay $1,000 for those 70,000 points mentioned above, and then sell that first-class ticket for $4,000. That seems like a pretty good deal for the buyer, and I’ll admit that purely in terms of value, buying from a broker is definitely better than selling to one. However, the downside is very much the same, and once again I advise strongly against it.
Loyalty programs frown on mileage brokering; if you’re caught, you may be penalized no matter which side of the transaction you’re on. For example, consider this section of the Delta SkyMiles rules and conditions:
“… tickets obtained through prohibited sale or barter transactions are VOID, invalid for travel, and will be confiscated. Persons trying to use such tickets will not be permitted to travel unless they purchase a ticket from Delta at the applicable fare.”
If you buy airfare through an unauthorized channel, it could be canceled. When that happens, you’ll be left with no ticket and the prospect of trying to get your money back from the broker. The discount doesn’t look nearly as attractive from that angle.
It’s easy for me to say this because I’ve been honing my award travel skills for years, but I think you’re way better off learning the ropes and figuring out how to book those premium awards for yourself. As the saying goes, if you sell people international first-class tickets for $4,000, they’ll fly wherever they want for a day; if you teach them how to play the award travel game, they’ll fly wherever they want for a lifetime!
Chase Sapphire Preferred® Card
|Intro APR||Regular APR||Annual Fee||Balance Transfer||Credit Rating|
|N/A||16.24%-23.24% Variable||Introductory Annual Fee of $0 the first year, then $95||See Terms||Excellent Credit|