Frequent Flier Mile Auctions Look Like A Sucker Bet

If you’re a member of any of the major airlines’ frequent flier programs, you’ve probably received e-mails trying to get you to use those miles to bid on auctions for anything from resort getaways to Kentucky Derby passes. But the people who win these auctions may just be tossing away good miles.

SmartMoney.com points out that the winning bids on many of these auctions are several times the value of a round-trip domestic ticket. In many cases, those tickets are more valuable than what customers are bidding on.

The winning bid for a trip for two to the Country Music Awards was 592,000 miles. For those miles, the bidder could have purchased almost 12 round-trip domestic economy tickets, or six round-trip business class seats.

“Auctions benefit the airlines more than the consumer,” George Hobica of AirfareWatchdog tells SmartMoney. “They’re trying to find ways to reduce their mileage liability.”

The airlines defend the auctions by saying that they offer experiences that are often not generally available to the public.

And if you are a business traveler with a 6-figure stash of miles that you’ll probably never get around to using, maybe it might be a good idea to use them on passes to awards shows or seats in the American flight simulator.

But most people will want to double-check that they aren’t giving away miles that could be better used in the more traditional way.

3 Ways Not to Use Airline Miles [SmartMoney.com]

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  1. Blueskylaw says:

    “The airlines defend the auctions by saying that they offer experiences that are often not generally available to the public.”

    Notice they didn’t say it was a good value to the consumer.

  2. TuxthePenguin says:

    “The winning bid for a trip for two to the Country Music Awards was 592,000 miles. For those miles, the bidder could have purchased almost 12 round-trip domestic economy tickets, or six round-trip business class seats. “

    Yet what if you’ll never burn through the miles. I know several employees who were once in public accounting and flew quite often. They have tons of miles and my firm will never send them anywhere. I’ll pass on these auctions… better to use them for something.

  3. thatfunkylady says:

    Awww man. The picture is from Denio’s in Roseville, I haven’t been there in ages! I loved spending money on junk there.

  4. bhr says:

    back when I was traveling extensively for work I cashed in my miles on random crap a couple of times. Thanks to my company paying full fare most of the time I wound up with enough miles to fly anywhere I wanted many times over, but personally hate flying and would be hard pressed to fly for a vacation.

  5. CycloneBD says:

    I’ve had difficulty redeeming miles in general. I’ve got a little over one tickets-worth on Delta and US Air. I’ve tried to use them a couple of times, but either no seats are available, or I have to pay a premium (more than 25,000 miles) for a round trip ticket. I worry that having them banked is risky, because the airline could change the program any number of ways to my detriment.

    • Autoexec.bat says:

      I’ve fared OK (pun intended). I managed to wrangle two round-trip flights from DCA to HHH in the summer using 80,000 miles. The fare would’ve cost $1600 otherwise.

      I don’t even have silver status or anything.