Critical Section

Anything Points

Sunday,  05/18/03  10:15 AM

CNet reports eBay has a new program which allows consumers to trade frequent flyer miles and other loyalty credit for dollars stored in a PayPal account.  The Anything Points program looks really cool, right?  Especially since people have stopped flying as much, what with the economy and the Iraqi war and SARS...

I was really excited when I first read about it, but a closer look reveals it isn't a great deal.  The exchange rate for frequent flyer miles is 1.38 miles / point, and points are worth $.01, so this is $.0072 / mile.  (10,000 miles are worth $72.)  Frequent flyer miles are generally considered to have a value between $.02 and $.03 when used for flying, so this is a big discount.  Furthermore, exchanging points requires that you join a program at which has an annual fee of $20.  I currently have about 60,000 miles at American Airlines; if I exchange them and pay the annual fee, I net $410.  But if I fly to the East Coast and use these miles to upgrade from coach to business, they'll be worth $1,200.  Not a good deal at all!

Note: I really, really hate it when people have a service and bury the fee.  I had to get all the way through two different sign-ups (one for eBay, one for before the $20 fee was revealed, and even then it was obviously de-emphasized.  This makes no sense to me, and is actually very un-eBay-like.  People are going to find out, and when they do they're going to be upset.  Why not just say it: this service costs $20/year?  It is what it is.

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