Two new tools to help plan airline redemptions

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An impressive achievement of the travel hacking community is spreading information about the frequent flyer programs of non-US carriers, which allow Americans to take advantage of their award chart sweet spots, earning rates, routing rules, and even domestic lounge access in the case of Star Alliance carriers.

On the other hand, that's a lot of information. I can't do much more than keep a few rules of thumbs in mind when searching for award tickets: Avios for short flights, American for off-peak awards, Lufthansa for domestic first class.

In the last few weeks two travel hackers contacted me to share tools they've designed to streamline the process of comparing award charts. I told them I'd take a look and share my thoughts here.

Eric Boromisa's Award Calculator

Eric contacted me in September to share his Award Calculator. He's selling the Calculator through a site called Gumroad. If you use the offer code "freequentflyer" you'll get $7 off either the "economy" or "full" version of the product. Full disclosure: Eric gave me a free copy of the file to experiment with.

So what is the Award Calculator? It's an Excel spreadsheet that's been programmed to calculate the cheapest mileage cost for awards between "North America" and another country. The "economy" version can calculate award costs in economy, and the "full" version returns the mileage cost of premium cabin awards as well.

The most important thing about the Calculator is that it doesn't find the mileage redemption which costs the fewest miles (although it does show the mileage cost in all the included programs). It calculates the cheapest mileage redemption using values you yourself provide.

This creates the program referred to in data processing as "garbage in, garbage out." If you don't provide the right values, then the calculating function will generate useless values. Unfortunately, rather than simply telling you to provide you own values, Eric provides default "market" values.

These "market" values are nonsense: Lufthansa and Air Canada are both Starwood Preferred Guest transfer partners, but Eric's default value for Miles & More is 2.8(!) cents each, while Aeroplan miles are valued at just 1.9 cents each. Is it because Aeroplan is also an American Express transfer partner? Maybe, but there's no way to tell.

In other words, if you want to use the "best value" calculating function, be sure to manually assign each program's currency the correct value, which I would argue is the cash value of the manufactured spend you use to generate that currency rather than cash back. If you don't have access to a currency (for example, I don't have any Membership Rewards-earning cards), just assign an arbitrarily high value to that currency.

I've played around with the Award Calculator for a few weeks now and my overall impression is that it's an impressive first step, but it's not a finished product and it's not yet worth $12-$22. A few funny oversights (Air France doesn't fly La Première to France anymore? Someone should tell them!) need to be fixed, and it would be nice if assigning a value to transferrable currencies automatically populated all their transfer partners with imputed values at the correct transfer ratio.

Again, if you're interested in trying it out for yourself, you can buy it at Gumroad for $12-$22 using the offer code "freequentflyer" (I don't receive any compensation if you do, I think Eric is just trying to track where his sales are coming from).

AwardAce is simple and beautiful

Just this morning a reader reached out to share his site AwardAce with me, and it blew my socks off. The site is simple, powerful, and beautiful (also free).

In its current form, you only have to make three selections: your departing airport, arriving airport, and whether your flight is one-way or roundtrip. You can also filter by award program (basically making it a simple, uniform award chart for every included program) or transfer partner (Chase, American Express, Citi, or Starwood Preferred Guest). 

Then AwardAce produces a color-coded table showing you the mileage cost in a variety of programs:

The site just launched in August and it's not perfect yet. For example, in my searches the large grid only showed "off-peak" American Airlines and "short-haul" MileagePlus award prices, and the creator doesn't appear to be aware that British Airways Executive Club miles can be redeemed on Alaska Airlines. Additionally, Lufthansa Miles & More isn't shown as a transfer partner of Starwood Preferred Guest, which is an easily-fixed oversight.

The site works best on international flights where its database really shines, rather than on domestic flights where there are more moving pieces than it can easily accommodate.

The site is also restricted to nonstop and one-stop flights, so if you are planning a trip that requires two connections, you have to eliminate one or more stops to find the correct cost. For example, the site easily calculates the mileage cost in 7 programs between Detroit and Prague:

But a search between Indianapolis and Prague generates an error, even though Delta flies 7 nonstops daily between Indianapolis and Detroit. That's not a bug, it's simply a limitation built into the tool you need to be aware of.

I'm not sure what the creator's eventual plans are to monetize AwardAce, but for now it's free and awesome.

Beware Delta bearing voluntary denied boarding compensation

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It's no secret that I think Delta runs the best domestic airline operation in the United States. They have incomprehensibly good on-time and completion statistics compared to the competition, and their mainline jets are clean and comfortable. It's a great airline.

However — and this may not be totally surprising — they don't love giving away money.

Delta's voluntary denied boarding compensation is more restrictive than their competitors'

When you volunteer to give up your seat on a flight that's overbooked, airlines will offer voluntary denied boarding compensation, which usually takes the form of a voucher valid for use only on the airline you were originally scheduled to fly on (rather than the cash you'd be entitled to for being denied boarding involuntarily).

Both United and American allow such vouchers to be redeemed for any passenger. It's true that American doesn't make redeeming vouchers easy (you have to present your voucher in-person at an American ticket counter or mail it to a post office box in Florida), and it's true that flying United is a special kind of hell, but the vouchers are, in fact, relatively easy to redeem (in American's case, as long as you have a stamp handy!).

For a few years now, Delta's electronic credit vouchers have only been redeemable in situations where the "bumped" passenger is one of the passengers on the new reservation. According to the terms and conditions of the voucher I received back in August:

"5. REDEMPTION/TRANSFERABILITY: VOUCHER IS NON-TRANSFERABLE UNLESS ASSIGNED TO SOMONE TRAVELING WITH THE ORIGINAL VOUCHER OWNER ON THE SAME RESERVATION AT THE TIME THE VOUCHER IS BEING REDEEMED."

My experience redeeming an electronic credit voucher

When I lucked into a $1,300 voluntary denied boarding voucher back in August, I knew the restrictions on transferability and assumed that I would redeem the voucher for my own flight to Europe next summer, while redeeming Flexpoints or Skymiles for my partner's ticket.

Then life got in the way. And by "life," I mean my partner listened to the original cast recording of Hamilton and said, "Hey, let's go to New York."

Fortunately, we have two daily nonstop flights to New York City, so this was not a heavy lift. Even better, those nonstop flights were just $206 roundtrip! In fact, those flights are so cheap that it became hard to decide how to pay for them. They're far too cheap for a Flexpoints redemption. Ordinarily I'd redeem Ultimate Rewards points at 1.25 cents each, but all my current Ultimate Rewards earning is reserved for a few upcoming transfers.

That's when I remembered: I have $1,300 in Delta credit!

Electronic credit vouchers can't be redeemed for multiple passengers online

When redeeming an electronic credit voucher for a single-passenger itinerary, it is either greater than or less than the cost of the flight you're redeeming it for. In other words, you either owe money, or will be issued a residual credit voucher.

When redeeming a voucher for two passengers, things aren't so simple. Here's what it looks like when I try to redeem my residual balance for a similar itinerary:

What you're seeing is the that my $862.60 voucher is only being applied against my own fare. The second passenger's $341.20 fare has to be charged to a credit or debit card.

When I asked Delta's normally-helpful @DeltaAssist Twitter team what to do, they told me the only way to redeem my voucher was to call in:

Delta tried to charge me for two direct ticketing fees — then lied to me and charged me one anyway

Call in I did, and eventually got on the line with a reservations agent who understood exactly what I wanted to do.

But instead of the $412.40 my tickets had priced out to online, he quoted me a whole $50 more. When I asked about the discrepancy, he explained that since I was making my reservation over the phone, there was a $25 per-ticket direct ticketing fee.

I told him that since the tickets couldn't be booked online, I expected him to waive the direct ticketing fee. He agreed, and came back again telling me that my total was $437.40 — again, $25 higher than the tickets had priced out online.

This time he explained that while he could waive my direct ticketing fee, he couldn't waive the second passenger's direct ticketing fee.

At this point my readers can imagine that I was more than a little frustrated. So I explained again that the only reason I was calling in the first place is that the ticket I wanted to book couldn't be booked online (you'd have to be crazy to book a ticket over the phone if you could help it!).

My agent went back to his supervisor again, then came back and told me that my residual travel voucher would be $887.60 — $1,300 less the correct $412.40 my tickets priced out at online.

I immediately logged into my account and saw this:

The residual voucher had been reissued less the $25 direct ticketing fee the agent assured me had been waived.

Conclusion

I immediately contact the @DeltaAssist Twitter team — again — and they submitted a refund request on my behalf.

This is the kind of miserable nickel-and-diming that it would be nice to believe Delta was capable of rising above. How many people have to call in to redeem these vouchers and don't think to ask how the phone agent arrives at the final price?

At the end of the day, when you accept voluntary denied boarding compensation for taking a later flight, you are doing a favor for the airline that is able to get their flight out full and on time. It would be nice if the airline was able to appreciate that and make it as painless as possible to redeem those vouchers for any eligible itineraries.

Read the comments!

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I've mentioned before that I rarely read other blogs anymore. Of course the affiliate bloggers just repeat the same bought-and-paid-for content over and over, but even the good guys only occasionally post something that piques my interest. There are a few reasons for that:

  • deals come in waves, and the current wave involving buying and reselling discounted gift cards while earning bonus Ebay credit doesn't have any interest for me;
  • even many non-affiliate bloggers focus on earning huge airline mile balances for premium cabin international travel. I only take one or two international trips per year, so those aren't awards I chase as diligently as other bloggers do;
  • I'm already earning the miles and points I need for the trips I want to take, so big signup bonuses or earning rates in unrelated programs don't interest me much.

There are exceptions: I'll certainly hop on the Discover/Apple Pay 10%/20% cash back deal, for example.

The experiment

Having said that, I know that a lot of the best information on my blog is found in the comments that readers leave about their own experiences testing out the ideas I write about and sharing their own tips and tricks. That being the case, I decided to run a fun experiment: I'd take a popular blog with a focus on manufactured spending, and go back and read every single comment in a range of recent posts (excluding weekend reviews, roundups, and summaries).

I was hopeful that there would be gems even more valuable than those found in the posts themselves. Here's what I found.

Hack Uber surge pricing

In order to avoid Uber surge pricing, reader Mike commented:

"You could also be dishonest and drop your pin somewhere outside the surge zone, then call the driver and tell them where you actually are. I’ve never done this before but it works if he driver agrees."

Open American Express Offer-eligible subaccounts

Since Serve and Bluebird (but not Prepaid REDcard) accounts are eligible for Amex Sync offers, you might want to create multiple subaccounts, each of which can be synced with a separate Twitter account. Frequent Miler responds to a reader by saying:

"You can use your own name if you want to. You might want to change something each time to be able to tell them apart."

Use American Express offers to buy cheap Southwest and Delta miles

Over the holidays last year 1800Flowers offered 30 Southwest or Delta points per dollar. Frequent Miler reminded a reader how to use these offers to buy Southwest and Delta miles for 1.33 cents each.

Amtrak's new program won't allow "saver" redemptions

In the comments to his review of the new Bank of America Amtrak co-branded credit card, Frequent Miler points to this FlyerTalk post where an Amtrak representative says "saver" fares won't be eligible for redemption under the new Amtrak Guest Rewards program.

Acme Markets accepts Apple Pay

If you live in New Jersey, you might be excited to know that Acme Markets, "a supermarket chain in the Delaware valley," sells $500 Visa gift cards and accepts Apple Pay, according to commenter DavidNJ.

Conclusion

Keep in mind that these are just the five comments that jumped out at me from the first three pages of Frequent Miler's blog archives. But there are many, many pages of blog archives, and there's also a search function!

So if there's a particular technique you're interested in datapoints about, you should search for posts about it, and read every comment.

There's no telling what you'll find!

Timeshares?

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Everything I need to know about timeshares I learned from The Queen of Versailles. Still, it's the kind of product — complex, opaque, little-understood — that should be worth at least a passing glance from a travel hacker. Not least because it's travel-related!

Unfortunately, after spending a day researching this post, there's a simple answer: the numbers behind timeshares just don't work out.

Having said that, I already wrote the post, so keep reading if you're interested.

Never buy a timeshare from the developer

I know this goes without saying, but when you buy a timeshare from its developer, in addition to whatever value the timeshare itself has, you're also paying the salary of the salesman and overhead for the sales office. Don't do that.

When buying a timeshare, pay attention to the sales price, maintenance fee, and transfer fees

The Timeshare Users Group is one secondary timeshare marketplace where you can search and filter timeshares currently being offered by their owners, sometimes at a substantial discount, for example, free:

The sale price, however, is only the amount that is paid to the current titleholder. In addition, the developer collects an annual maintenance fee. You can also sort TUG by the amount of those maintenance fees, which can start quite low:

And end up astronomical:

The timeshare developer will typically charge a range of transfer fees as well, which may be paid by the seller, the buyer, or split between them depending on the agreement they come to.

So, what are these points?

If there were a deal in timeshares, this is where it would be: many timeshare developers are subsidiaries of the major hotel chains, and allow you to convert, each year, your physical timeshare (i.e. a week in Florida at a specific property) into that chain's loyalty currency at a fixed rate.

Unfortunately, those transfers are usually restricted by the kind of timeshare you bought and the channel you bought it in. For example, Marriott only allows transfers from their Marriott Vacation Club points to Marriott Rewards points for people who bought their timeshares through official Marriott channels. Everyone else is stuck with their Marriott Vacation Club points.

Hilton Grand Vacations Club is the only timeshare program I looked into which appears to allow more or less unlimited transfers of their HGVC points into Hilton HHonors points. They allow you to convert 1 of their points into 25 Hilton HHonors points. At a 0.35 cent imputed redemption value, that makes 1 HGVC point worth 8.75 cents.

If that's what these timeshare points are worth, the next question is what they cost. To run this test I had to devise a kludge. Since maintenance fees are higher at properties which give more annual points, and lower at properties that give fewer annual points, what we're interested in in the cost per point. But TUG doesn't let you sort by that value, so instead I calculated the cost per point for the 5 lowest and 5 highest maintenance fee properties currently for sale on TUG.

Here are those values for Hilton Grand Vacation Club:

In the very best case scenario, you can pay $80,000 upfront for the right to buy 600,000 HHonors points annually at 0.43 cents each. If, like one of my regular commenters, you're able to consistently get 1 cent per HHonors point in value on redemptions, you'd be earning a roughly 4.3% return on your $80,000 investment.

The much cheaper $23,500 property would give a 7.5% annual return, by the same measure.

Conclusion

This was a fun post to write, if for no other reason than to satisfy my curiosity: are timeshares ever a good deal? The short answer is that they are not, at least not as arbitrage opportunities.

If, on the other hand, some timeshare developer buys up a piece of land you're in love with, and the only way to visit your favorite beach or ski resort is to buy a weeklong timeshare, then don't let me stop you.

But please, buy it on the secondary market. Those salesmen are just terrible; let's starve 'em out.

Fun with award mapper and Hotel Hustle

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There are two free, online tools designed to help make it easier to find the best values when searching for paid or award stays at chain hotels: award mapper and Seth Miller's Hotel Hustle. I use them both all the time, and want to share my thoughts on the strengths and weaknesses of each tool.

Award mapper cleanly shows all a city's loyalty program properties

There are two things I love about award mapper and one thing I hate about it.

First, what I love: the selection of hotel chains and range of points is persistent across searches, and it shows all the corresponding properties within your search area. That lets me select all the chains whose points I'm considering using, then plan a whole trip by simply changing the city being searched.

This is fantastic when you're planning something like our winter jaunt to Italy. I know which chains I have points in, so all I need to do is change the city being searched to see which cities have properties that are conveniently located and within my points budget.

What I hate about it is that it simply wasn't designed to show the actual points cost on a given night, so you end up with absurd results like this for the Hilton Prague:

All award mapper knows is that the Hilton Prague is in the Hilton category that ranges from 30,000 to 50,000 HHonors points per night; it's not interested in telling you the price you'll pay. To find that out, you'll have to use the HHonors Points Search Tool, or search for the dates you're actually interested in (only in June does the Hilton Prague cost 50,000 HHonors points; the rest of the year it costs 30,000).

Similarly, Category 1 and 2 Starwood Preferred Guest properties cost 1,000 fewer Starpoints during the weekend, but award mapper can't give you the actual points price on a given date.

Hotel Hustle shows your actual cost, but requires your actual nights

Before using Hotel Hustle, you should create a free account with Wandering Aramean Travel Tools. Then when you navigate to Hotel Hustle you'll be able to configure the value you assign to each hotel chain's rewards currency. Here are the values I use:

For Hyatt, IHG, and Marriott rewards I use 1 cent, since that's what my transferrable Ultimate Rewards points are worth when redeemed for cash, instead. Hilton's 0.35 cent value is based on a comparison of 6 HHonors points per dollar spent with the American Express Surpass card versus 2.105 cents per dollar spent with a Barclaycard Arrival+ card post-devaluation. The same logic applies to the Starwood American Express (1 Starpoint per dollar) and Barclaycard Wyndham Rewards (2 Wyndham Rewards points per dollar).

Once you've configured your values, you can search for the actual cash rates available at each property in a city, and the actual points cost of those same properties. You can also filter by rewards program (click the asterisk by a program to show only those properties), but those filters are not persistent across searches, unfortunately.

Finally, Hotel Hustle lets you filter your search by "Hustle Hotness." Seth is not fantastic about documentation, but here's how it works:

  • if you filter by 3 Hustle Hotness stars, you'll see all properties where a points redemption saves you more than 85% of the value you assigned to the points;
  • if you filter by 4 Hustle Hotness stars, you'll see all properties where a points redemption saves you more than 115% of the value you assigned to the points;
  • if you filter by 5 Hustle Hotness stars, you'll see all properties where a points redemption saves you more than 145% of the value you assigned to the points.

In other words, the more stars, the higher the revenue cost compared to the value of the points required for a redemption. Since I can usually bring down the revenue price by searching for AAA rates or using corporate codes, I always filter by 4 or 5 Hustle Hotness stars.

Conclusion

Award mapper and Hotel Hustle are complementary tools, and I use both many times each week, especially when I'm planning a trip to a new country or city.

I use award mapper to get a feel for what chains and properties are available in a city, then as my plans come together I use Hotel Hustle to narrow in on the specific dates and properties I'm interested in.

Finally, I go to the hotel's website to verify rates, see whether additional discounts are available, and to make my points reservations.

Earn the miles you redeem, redeem the miles you earn

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While I didn't coin the aphorism, I repeat it every chance I get: the least valuable point is the one you don't redeem.

It doesn't matter how big the portal bonus, or how cheap the manufactured spend, if your balance in a single account never dips below 900,000 you have 900,000 worthless miles.

I'm not judging; we all make mistakes. But the first thing to do when you find yourself halfway up a mountain is to stop climbing!

Earn the miles you redeem

There are two typical strategies for an affiliate blogger promoting the flavor of the month increased signup bonus (or increased affiliate payout):

  • explain how great a loyalty program is and how valuable the signup bonus is;
  • or highlight specific destinations or properties that the signup bonus can get you to.

So you can find Bankrate.com employee Jason Steele discussing free one-ways on United award trips in order to sell Chase credit cards, or Summer Hull name-checking aspirational Marriott properties to promote an increased signup bonus on their co-branded card.

But if United miles aren't the miles you redeem and Marriott properties aren't the properties you stay at, you shouldn't be thinking about these cards at all!

Even if you do read a review of Lufthansa First Class and think to yourself that it wouldn't be too bad to try it sometime, you need to do a reality check first: are you going to learn the nuances of Lufthansa award availability? Are you willing to buy a tag flight to Lufthansa's US gateways if you can't find United award space? Are you able to plan your vacation time around those flights?

My point is that mere interest isn't enough to waste a credit card application on — you need a plan you're willing to commit to. Otherwise you risk ending up with a pile of worthless United miles or Marriott points.

Everyone's miles and points strategy is different, and I'm not going to tell you what miles and points you should be earning, or which are the most valuable, because you already know which loyalty currencies are the most valuable: they're the ones you're able to consistently redeem for the trips you actually want to take.

Redeem the miles you earn

So you got snookered into earning a bunch of miles and points that have been collecting dust and are slashed in value every 18-to-24 months. It's true they're worthless until you redeem them, but the good news is they're only worthless until you redeem them, and that's completely in your power.

So here are some suggestions for cleaning out those stuffy old accounts and finally turning your aging miles and points balances into real-world value.

  • Pay with points. I get e-mails a few times per month from readers who are frustrated that after earning a few hundred thousand Membership Rewards points, they find they're virtually unusable for the supposed "sweet spot" redemptions: Delta and Frontier are the only US-based airline transfer partners, British Airways is distance-based and imposes fuel surcharges, and the other airline programs have learning curves too steep to quickly master. But if you ever pay cash for airline tickets, you're in luck — you can simply buy those airline tickets with your Membership Rewards points and unlock one cent per point in value (more with the Business Platinum American Express)!
  • "Worse" transfer partners and rates. It's true that Membership Rewards points transfer to Starwood Preferred Guest at a 1000:333 ratio. It's also true that Starpoints are both more valuable and more flexible than Membership Rewards points. If Starpoints are the ones you're comfortable aggressively redeeming, 50,000 of them are worth more than 150,000 unredeemed Membership Rewards points.
  • Standard awards. I wrote about "standard" or "high-level" awards in a slightly different context last month, but they fit right in here. If you are sitting on hundreds of thousands of AAdvantage miles from multiple Citi Executive / AAdvantage signup bonuses because you can't find low-level Business or First award space, book an AAnytime award instead. Yes, between the US and Tokyo you'll pay 120,000 AAdvantage miles for Business or 170,000 miles for First class each way, but you'll also have your pick of dates and American-operated flights.
  • Hotel stays. You'll hear many bloggers tell you that airline miles are best redeemed for flights and hotel points for hotel stays. My question is, compared to what? If you're sitting on millions of miles while paying cash for hotel stays, you're missing out on an opportunity to save money, whether or not you're "maximizing" the value of your miles. Kenny at Saverocity wrote last week about redeeming AAdvantage miles for hotel stays and getting up to 1.6 cents per mile, but even getting 1 cent per mile in value is 1 cent more per mile than you're getting while they sit in your account unredeemed.
  • Give away and sell awards. Are your friends and family planning a trip? You may not be able to find award space for the dates you want to travel, but you might have better luck searching for their dates. Have them pay you for economy and book them into first. In my experience, people tend to like that.

Conclusion: remember why we play this crazy game

Everyone's motivation is different for travel hacking. Maybe you want to travel more. Maybe you want to pay less for the trips you were already taking. Maybe you want to travel in classes of service and stay at hotels you wouldn't be able to otherwise afford.

Whatever your motivation is — and no motivation is right or wrong — it's realized only at the moment of redemption, not the moment of earning!

I am not addicted to Amazon

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Earlier today I pooh-poohed the Chase Freedom's earning of 5 Ultimate Rewards points per dollar spent at Amazon.com in the 4th quarter of 2015. While I do make purchases at Amazon.com occasionally, especially since I generate a small amount of Amazon gift credit each month using Amazon Allowance and microhacking, I don't consider myself a regular Amazon shopper. Since I know many of my readers are, I thought I might as well explain why.

"Free" shipping is now standard almost everywhere online

Obviously shipping is a cost of doing business for any online merchant selling physical goods, so it's not clear in what sense shipping can be "free:" it's included in the prices of the goods you order for delivery.

On the other hand, the included shipping that's now standard in online pricing makes those prices easy to compare, where they hadn't always been in the past, when Amazon first started offering free shipping on orders for their Prime members.

Amazon only occasionally has the best prices

To qualify for free shipping, orders have to be either sold or fulfilled by Amazon (although of course some Amazon Marketplace sellers also include shipping to compete more effectively with Fulfillment by Amazon sellers).

Here are some things I've purchased online in the last few months:

  • Dockers trousers. $35 on Amazon.com, $35 on Dockers.com;
  • Culligan Filter Replacement Cartridge. $12.67 on Amazon.com, $14.99 on Culligan.com;
  • Mr. Coffee 12-Cup Replacement Decanter. $10.97 on Amazon.com, $7.99 on Ebay.com.

In other words, sometimes Amazon is the same price as other merchants, sometimes it's more expensive, and sometimes it's cheaper. There's no inherent savings when shopping on Amazon.com.

Amazon restricts portal cash back

Last year I wrote that I was pleasantly surprised to earn cash back shopping at Amazon.com after clicking through TopCashBack, since at the time Amazon was paying 8% cash back for purchases in their "Men's Fashion" department, which happened to be where I was shopping.

The flip side of that is that Amazon regularly changes which departments earn portal cash back ("Star Wars Toys" is a current cash back category).

Actual online merchants like Dockers.com tend to have relatively stable, relatively high payouts: currently 5% cash back through Discover Deals, which rises to 10% cash back if you enrolled in time for the current 12-month double cash back deal.

Conclusion

Thanks to our brothers in the reselling game, every travel hacker has at least a general idea of how cash back portals can save money on actual purchases of physical goods. What they may not realize is that those portals can bring prices down well below the supposed savings offered by Amazon. Even better, sites like evreward and Cashback Monitor make it easy to compare the relative payouts from a wide range of shopping portals.

So by all means, shop at Amazon. But it's always worth a quick glance to find out whether you can save more money at one of the thousands of online merchants Amazon is competing against.

Thinking about ethics in travel hacking

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I spent this past weekend in Austin hanging out with a friend who's heavily involved in travel hacking, and he mentioned a few techniques that he had used to manufacture spend, about which he was embarrassed since they seemed unethical to him.

Everyone has different things they’re wiling and unwilling to do, so I don’t blame him for observing different ethical lines than I do. But I also think it’s useful to interrogate why certain activities seem more or less ethical to different people.

Breaking the law is illegal

The clearest cases are when a technique is illegal. With the exception of laws that are themselves unethical, I believe most people, most of the time, in democracies have an duty to obey the law, and in exchange receive the protection of the law.

For example, since structuring transactions to avoid reporting requirements is illegal, and the law against it is basically reasonable, you shouldn’t structure transactions.

Program rules are often written elliptically

Here’s a thought experiment. Delta SkyMiles can be redeemed for passengers besides the account holder. So let’s say your grandfather redeems his SkyMiles for an award ticket for you, then passes away. The ticket is still valid, and I think virtually anyone would have a clear conscience flying on the ticket that had been “purchased” with their living (since deceased) grandfather’s SkyMiles.

But if the account has been closed, I don’t believe it would allow any changes to be made to the award ticket, since Delta’s system treats award changes as first a redeposit of the miles, then a new redemption. Just in case you need to make changes to the ticket, I would find it reasonable to delay notifying Delta that your grandfather had passed. After all, the ticket was purchased prior to your grandfather’s death, so we’ve already established that these are “guilt-free” miles — why shouldn’t you be allowed to use them?

But if you’re willing to keep your grandfather’s account open until your existing reservations have been completed, it’s a short hop to keeping the account open until his existing SkyMiles have all been redeemed for new reservations. If he earned the miles in good faith and gave you access to his SkyMiles account, then what could be unethical about using the miles he accumulated?

Why should you ever notify Delta that your grandfather is no longer with us?

Here's the relevant rule from Delta's online membership guide:

"Under the SkyMiles Mileage Expiration policy, miles do not expire. Delta reserves the right to deactivate or close an account under the following circumstances:

  • A member is deceased"

In other words, it's up to Delta to cancel your grandfather's SkyMiles account. This is sometimes sloppily referred to as miles "expiring when you do," but that's overstating the case. According to the published rules, miles don't expire. However, Delta reserves the right to deactivate or close dead members' accounts.

Whose responsibility?

The terms and conditions of every credit card I know of states that the purchase of cash equivalents is not eligible rewards-earning activity (although FIA Card Services recently send me a letter telling me I could buy lottery tickets with my Fidelity Investment Rewards American Express). And yet almost all cash equivalent purchases do, in fact, earn rewards. Is earning rewards in that manner unethical?

The key question for me is who carries the responsibility for the enforcement of the agreement. Remember that the credit card contracts you agreed to don’t prohibit the purchase of cash equivalents — they simply say that such purchases won’t earn rewards. Since the credit card companies are the ones running the rewards program, they are also perfectly situated to enforce that clause of the agreement.

In the thought experiment above, Delta can’t be expected to know whether its SkyMiles members are alive or dead. But in the case of the purchase of cash equivalents, the purchase is being run on the credit card’s payment network, being processed by the credit card company, and then being deemed eligible for rewards by the credit card’s rewards program. The customer is making a purchase that is not forbidden by the credit card agreement’s terms.

In other words, if it’s ethical to buy cash equivalents, I don't see how you can have an affirmative duty to notify your credit card company each time they erroneously grant rewards for the purchases.

Conclusion: find the right shade of gray for you

Unfortunately, the vast majority of the techniques we use fall into the vast gray area between the flagrantly illegal and the uncontroversial. If you make a purchase with a credit card, then return the goods for cash, is that ethical or unethical? Does it make a difference if you did so intentionally? How much of a difference? If you return something purchased through a shopping portal and are allowed to keep the points, is that ethical or unethical? If you do so intentionally, on a large scale, after being warned not to, you may end up with date with a US Attorney in Seattle.

Fortunately, man is a morally calculating animal, so the answers to those questions (and more!) are available to anyone willing to think about them.

On the other hand, there’s no guarantee we’ll arrive at the same conclusion!

That’s why the decision of what techniques to use is an essentially personal one. We can try to reason our way through these questions, separately and together, but at the end of the day the only advice that matters is not to do anything that you consider unethical, and try to give everyone else the benefit of the doubt that they’re doing their best to behave ethically as well.

Manufacture spend furiously

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Yesterday Miles Per Day reported that US Bank Visa Buxx cards, which have been closed to new applicants for many months but have continued to work in the interim for existing cardholders, will no longer be loadable with new funds after October 24, 2015.

These cards are terrific, especially if you have access to US Bank ATM's, which allow free withdrawals of the $2,000 that can be loaded monthly to each card at a total cost of $10. If you used a card like the Barclaycard Arrival+ MasterCard, you could earn $40 in statement credits, per card, against travel purchases each month.

In other words, each US Bank Visa Buxx card you carried allowed you to purchase $480 in annual travel at a 75% discount.

I like small, isolated techniques

On the one hand, $480 in annual travel reimbursements is small fry compared to many other available techniques. But what I like about US Bank Visa Buxx cards is that the tool is isolated from all my other manufactured spend techniques: if you have access to US Bank ATM's, you don't need to cannibalize the liquidation bandwidth you're using with any other technique. It's $2,000 in "extra" manufactured spend per month — and cheap, too!

I do everything I can

Obviously, I don't use manufactured spend techniques I don't have access to (I sometimes hear from readers who can still buy Vanilla Reload Network cards!), and I don't use manufactured spend techniques I don't know about.

But to the extent possible, I pursue every avenue of manufactured spend available, because it's impossible to know when any particular technique will cease to be available. Since I do my best to redeem rewards currencies roughly as quickly as I earn them, I never want to find myself with empty account balances and no way forward to earn more.

Two ways to travel exclusively on miles and points

There are two ways to generate enough miles and points to fund the number of trips I want to take at deep enough discounts to make them affordable: be reimbursed by an employer for frequent business travel, or manufacture spend furiously.

While my takeaway from my point density charts is that paid hotel stays are an incredibly inefficient means of generating sufficient points for award stays, that only holds if you're paying for your own stays. A Starwood Preferred Guest elite paying for stays with the American Express co-branded credit card earns 5 Starpoints per dollar spent at Starwood properties, and would have to spend $2,000 on paid stays before they earned enough points for a single award night at a mid-tier property.

I don't think I've spent $2,000 on hotel stays in my entire life to date.

On the other hand, a Starwood Preferred Guest elite paying for stays with their co-branded credit card and being reimbursed by their employer for those stays wouldn't have to pay a penny for an award night at a mid-tier property; they'd just have to wait until their employer had spent $2,000 on their behalf.

Meanwhile, the same 10,000 Starpoints would cost someone manufacturing spend with their co-branded credit card perhaps $86 in fees, depending on the techniques used.

Manufacture spend furiously

If your reimbursed business trips generate enough miles and points to finance all the travel you're interested in, you're in luck.

Otherwise, you can research every technique you come across to find out whether it can be integrated into your miles and points strategy.

The stories affiliate bloggers tell about paying for travel with signup bonuses are "just so" stories, which is why I don't tell them. Of course if you work backwards from the signup bonus you're trying to sell, you can find trips that will be exactly covered by the points earned. But if you want to be in charge of your own miles and points strategy, rather than running off to the Maldives every time an affiliate blogger tells you to, you should be pursuing a robust, diverse miles-and-points-earning strategy.

And unless you're one of the lucky few, frequent business travelers, that strategy should include as many different manufactured spending techniques as possible.

Travel hacking when you've got plenty of money

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Before I learned the first thing about travel hacking, I still traveled, and I was still broke. So for me, travel hacking straightforwardly allowed me to take the trips I was already taking — and more! — while paying far less out of pocket than I had been when all my trips were paid for with cash.

I don't have to fly Spirit anymore, either.

That sometimes leads to some crossed wires between me and my readers, since on the one hand I don't pursue "aspirational" redemptions with the same fervor (the Maldives are expensive!), but on the other hand I have much more time to spend earning miles and points every day than prominent bankruptcy attorneys do.

But that doesn't mean I actually believe travel hacking is just for poor people! In fact, there are some opportunities that are either exclusively available to, or more lucrative for, people with plenty of assets to sink into them. Here are three opportunities I'd pursue if I had a few hundred thousand spare dollars lying around.

Brokerage bonuses

Perhaps the only links on my site that haven't changed in the years I've been blogging are those to Fidelity's United, Delta, and American brokerage bonuses. Deposit $100,000 for 9 months, earn 50,000 miles.

You're eligible for one bonus every rolling 12-month period.

Note that you shouldn't do this if you're going to let a Fidelity salesperson talk you into an expensive, actively managed fund. But if you are willing to put in the effort to coordinate your Fidelity account with your other cash and assets, these miles can be very close to free.

The next-lowest hanging fruit here may be Scottrade, which currently offers tiered bonuses up to $2,000 for deposits of $1,000,000. As a percentage return, you're best off depositing just $200,000, however, and earning a $600 bonus.

See Doctor of Credit's list of current bank account bonuses for some other opportunities available to the well-heeled.

Bank of America Preferred Rewards

With a cumulative $100,000 on deposit in Bank of America, Merrill Edge, and Merrill Lynch accounts, you qualify for Bank of America Preferred Rewards Platinum Honors, which has one key benefit: a 75% bonus on rewards earned with the BankAmericard Travel Rewards credit card. Since the card earns 1.5 cents per dollar spent everywhere, the 75% bonus makes it a 2.625% cash back card, when redeemed against travel purchases made with the card.

That's the best return you're going to get on a Visa or MasterCard for purchases everywhere (the Discover it Miles card gives 3% cash back everywhere for the first year of card membership).

Kiva Loans

I've left the Kiva loan business for two reasons: first, my PayPal accounts have all been closed! But second, I couldn't justify tying up money in months-long Kiva loans when the same money could be turned over weekly at my local merchants, albeit with far higher transaction fees.

With access to much more liquidity but finite local avenues for manufacturing spend, I'd be thrilled to pour that additional liquidity into Kiva loans using super-lucrative US Bank credit cards.

Conclusion

Fortunately, virtually all manufactured spend and travel hacking techniques are available regardless of your income, let alone your net worth, as long as your credit score and income get you approved for the credit cards you want. I'm living proof of that.

But there are advantages to having a few hundred thousand dollars to throw around, as well. This is America, after all!