Budget's Free Frequent Flyer Miles Promos Will Cost You

Michael writes, ” I was just reserving a budget rental car, and for some reason decided to actually read some of the fine print.” Buried in the text was something called an “FTP Surcharge,” which basically amounts to a participation fee for any frequent flyer promotion they offer their customers.

FTP SURCHARGE

For rentals in the United States, Puerto Rico, St. Thomas, St. Croix and Canada when the renter chooses to receive frequent flyer miles from the following U.S.
Airline programs Budget will assess a frequent flyer surcharge equivalent to USD $.50 per day up to a maximum of USD $2.00 per rental. The amount assessed is
collected by budget to offset a portion of Budget’s annual cost of participation in frequent flyer programs.

Here’s another example of it that we found on a randomly Googled Budget frequent flyer page.

What we’d really love to know is whether or not the various airlines have hiked their own “participation fees” for third-party companies like Budget—and now Budget is passing the cost on to renters.

Comments

Edit Your Comment

  1. Sherryness says:

    I thought the opportunity to upsell was supposed to be what offset the cost of participation in programs like that. I guess they don’t have a lot of faith in their sales agents. Also, when I saw ‘FTP surcharge’, I thought you were going to say they charged for having to upload content to their server. The way they break costs down these days in order to ding you for a normal cost of doing business, I really wouldn’t have been that surprised.

  2. JustAGuy2 says:

    Hertz has had a similar fee for years.

  3. He says:

    I remember Hertz doing this too. Googling says that so does Avis. The Hertz desk disclosed this when I asked to ad a FF number to the rental. I wasn’t paying so I didn’t mind.

    Can anybody find a rental place that doesn’t charge this?

  4. ffbb says:

    This is nothing new. I rented from Alamo several times and they have the same charge. I believe all rental car companies who offers frequent flyer miles will charge you for this.

  5. dthigpen says:

    Last time I went to the counter to rent a car at Avis, I asked them about my Frequent Flier miles (since they advertise it with my airline), they said “Sure, it’ll be so and so a day for them” with a smile (not sarcastic, which was just weird). I forget exactly how much, but it wasn’t trivial. I declined. I think it’s absurd and that it’s standard in the rental car industry.

  6. freshyill says:

    For what it’s worth, I rented a car for the first time last weekend, and I had a great experience with Thrifty.

  7. cybercjh says:

    Hertz does this too. How do you get around it? Request frequest flyer credit AFTER you’ve paid for and returned your rental. They’ll do it for you. The form to request it is right on their website. And, you don’t get dinged for the 50¢ per day charge. :) Where there is a will, there is a way.

  8. chgoeditor says:

    This fee has been around for years, and most of the major car rental companies impose something similar. The bottom line: One way or another, the cost of those frequent flier miles is built into your purchases. The car rental agenices are just one of the few industries that are transparent about it.

  9. iMike says:

    @chgoeditor: +1. Shows up as a separate line item on the invoice, in all cases where I’ve seen it applied.

    Don’t want to pay the fee? Don’t give the rental company a frequent flyer number.

    However, in most cases the fee works out to $0.01 or less (sometimes dramatically less, as where there’s a triple or quadruple miles promo) per mile, which is cheap.

  10. evarga says:

    Almost all of the rental agencies charge this (somtimes varying with each airline), and it’s based off some sort of tax/fees they have to pay for these miles when they buy them from the airlines. I read this when I was looking into my Budget rental, but I found this on the Avis site:

    For rentals in the United States, Puerto Rico, St. Thomas, St. Croix and Canada when the renter chooses to receive miles in the American Airlines AAdvantage program the frequent flyer surcharge will be calculated based on the federal excise tax expense incurred by Avis when it purchases miles from American Airlines. Under the tax relief act of 1997, all companies that purchase frequent flyer miles from airlines must pay a 7.5 percent excise tax on the cost of those miles (approximately 6 cents per rental day). The 7.5% FTP tax applies to all us states except Arizona, California, Missouri, Oregon and Wyoming.

    The Frequent Flyer surcharge or FTP tax are not applicable to mileage/points or credits earned on international airlines, hotel programs or other non-airline frequency programs.

    I’m sure there’s a little extra in it for the rental companies. As iMike said above, still worth it if you use FF miles. Of course, now I’m going to see if I can transfer those miles to my SPG (hotel) account, and then transfer them to AA at 1.25x. No fees and a bonus!

  11. uhohagain says:

    the airlines charge the rental companies for putting the frequent flyer miles on. the rental companies just turn around and charge the customer for it.

    you can get around it by showing your airline the recepit from the rental company, usually. they will apply the miles without the fee.

  12. Dreyus says:

    National has this program too. You can either choose to be “rewarded” by free rental days or you can pay a small surcharge ($.50 per day) to have your rewards transferred into airline miles. It is also dependent on the airline that you request the miles go to as well.

  13. pragakhan says:

    I thought this was common practice? All of them do this – they have to buy the miles to give them to you.

    Airlines don’t just give them away with out getting some sort of revenue either directly or indirectly.

    Either switch to free car rental rewards or if Budget doesn’t have that option, switch rental companies!

    It’s not news, it’s common sense.

  14. RickScarf says:

    @ He:
    Enterprise doesn’t do this

  15. RickScarf says:

    err.. forgot to add, they don’t usually do FF deals, but when they do do them occasionally with special promotions, they don’t charge any hidden fees.

  16. weave says:

    50 cents to two bucks is cheap to keep your frequent flyer account active, if you need to do so. I just cycle through my various FF accounts each year per rental just to ensure they don’t expire since I don’t fly each airline each year.

  17. NotATool says:

    @cybercjh: Same with Avis. I do this all the time when I travel. Request the frequent flier miles retroactively via their website, and there’s no charge.

  18. JustAGuy2 says:

    Reason the fee is there is that, for business renters, it’s a non-issue (just pay the extra two bucks, it’s someone else’s money anyway).