Want to sell your airline miles? Here's why it's a bad idea

Usually, TPG readers are primarily concerned about how to earn more miles or redeem miles for maximum value. But occasionally, we get a reader question about whether you can sell airline miles.

For example, TPG reader Doug F. recently wrote in asking:

"I have been told I can sell my 170,000 United miles. Where can I find if this is true and a reputable company if it is?"

If you search online, you'll find various airline miles brokers and airline points brokers willing to pay you cash for your travel rewards. That said, I don't recommend selling your miles for a multitude of reasons.

Here's what you need to know, including other ways to get value from airline miles you don't want.

Why it's a bad idea to sell airline miles

TPG reader Doug F. specifically asked about selling United miles. So, let's look at the United MileagePlus program rules to understand one of the primary reasons it is a bad idea to sell airline miles.

Point 31 of the program rules specifically allows MileagePlus members to book awards "in the name and for the use of any other person." However, there's a section entitled "prohibition of sale or barter" earlier in the program rules that states:

"The sale, barter or other transfer or attempted sale, barter or other transfer of any mileage, certificates, PlusPoints, awards, benefits or status, other than as authorized and/or sponsored by United, is expressly prohibited. Any mileage, certificates, PlusPoints, awards, benefits or status sold, bartered or otherwise transferred is in violation of the Rules and any accounts or Members involved in such sales, barters or other transfers may be subject to United's Remedies. The acquisition, use, transfer or attempted acquisition, use or transfer of mileage, certificates, PlusPoints, awards, benefits or status that have been acquired by purchase, barter or other transfer in violation of the Rules may result in United's exercise of United's Remedies."

So, you can redeem your miles to gift someone an award flight. But selling United miles or awards — and buying United miles or awards — is prohibited except as specifically authorized or sponsored by United.

If you're wondering just how bad it might be if United catches you buying or selling miles or awards, let's take a look at "United's Remedies" in the program rules:

• Termination of your United MileagePlus account, including any United MileagePlus Premier status or United Million Miler status.
• Removal or cancellation of any or all accrued United miles, Premier qualifying credits, lifetime miles and any pending or outstanding award redemptions, certificates or benefits.
• The confiscation of award tickets or denial of boarding at the airport.
• Loss of other United MileagePlus program benefits.

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These remedies might sound terrible if you enjoy United MileagePlus elite status, get excellent value from United miles or have accrued a massive mileage balance with United. If you only have a modest amount of miles and don't plan to use the program in the future, these remedies might sound worth the risk if you can get some cash in your pocket now.

However, the above remedies aren't the end of the possible negatives that could result from selling or buying miles or awards. In particular, United's program rules go on to note:

In addition to the foregoing United's Remedies, United may, upon written request, require the Member to repay the value, as determined by United, of the awards redeemed, certificates or benefits acquired as a result of Prohibited Conduct.

The program rules for each loyalty program are different. Most, if not all, major loyalty programs have rules against buying and selling rewards. And many loyalty programs have algorithms and procedures to flag suspicious redemptions.

Although getting caught selling travel rewards might sound unlikely, it's not a risk I'm willing to take. Major loyalty programs have gone after members for selling travel rewards before, and travelers who sold only one or two award tickets may still face severe consequences.

It's also possible that a mileage broker may use your miles and not pay you. In this case, you wouldn't have much recourse since you were going against the loyalty program terms and conditions by attempting to sell your miles.

Related: How 4 TPG reporters would spend 1 million United miles

Other options besides selling travel rewards

Selling your travel rewards is usually a risky idea. If you're looking to sell airline miles for cash, instead consider the following options that your program may offer:

• Share or transfer your points or miles to other members through program-approved methods. Some programs, including Hilton Honors and World of Hyatt, allow you to do so for little or no fee.
• Donate your points or miles. For example, United allows you to donate miles to various charities, including Miles4Migrants.
• Transfer your points or miles to a partner program. For example, you can transfer Wyndham Rewards points to Caesars Rewards and IHG One Rewards points to many airline programs.
• Redeem your points or miles for cash-back rewards, gift cards, magazine or newspaper subscriptions, shopping or upgrades.

Some of these options let you give the gift of travel to a friend or family member, while others let you squeeze a bit of value from your travel rewards in a program-approved manner. If none of these options are appealing — or available with your program — consider using your rewards to book a trip with family or friends.

Related: What to do with small points and miles balances

Bottom line

Selling your points or miles is clearly against the terms and conditions of most, if not all, loyalty programs. Although I've booked awards for friends and family as a gift — with nothing given or expected in return — I wouldn't barter or sell my rewards. It's just too risky, especially with many programs monitoring account activity and looking for suspicious redemptions.

In short, the money you might get for selling your points or miles isn't worth potentially losing your account and needing to pay the loyalty program thousands of dollars.