What to do when a Loyalty Program Changes its Expiry Policy (i.e. Air Miles)

CBC has been on a tear this month of July, writing one article after another about the Air Miles program:

• ‘You’re pretty much hosed’: Air Miles rewards lacking for expiring points, customers complain
• Frustrated Air Miles customers struggle to redeem points as expiry date looms
• Your Air Miles could expire soon: What you need to know before cashing in

I am probably missing some article links. Anyway, I thought I’d share some thoughts about this matter, as it seems that according to CBC, lots of people are frustrated with Air Miles.

Just to recap, effective December 31, 2016, all miles earned 5 or more years prior (i.e. December 31, 2011 and before) will expire. Thereafter, miles will continue to expire on a quarterly basis (quarter ending: March 31, June 30, September 30 and December 31). Essentially, you will have 5 years + rest of the quarter to redeem your miles before they expire.

For example, if you earned some miles this month, July 2016, you will have until September 30, 2021 to use those miles. It may seem like a long time to some, but for others, who are trying to save up for a larger reward, it might not be enough time.

I recently already wrote a post about some of my thoughts. Today, I will compliment that post with additional thoughts on Air Miles and then a look at the bigger picture.

Additional Thoughts on Air Miles

Here are a few additional suggestions:

Use the website to redeem your reward

• As frustrating as it is, it is just better to redeem your reward using their website, rather than phoning in. The customer service representatives’ (CSR) moral is probably at an all-time low. If they work 450 minutes a day (7.5 hours), spent 8-10 minutes per person, that around 50 phone calls a day. They are probably listening to 50 complaints a day. If they worked 20 days a month, that’s 1,000 (20 x 50) complaints a month. They probably aren’t paid enough to put up with that and they are probably on the verge of quitting. So you definitely need to manage your expectations of Air Miles’ level of service.

Look for gift ideas

• If you can’t find a reward that suits your needs or wants, there is probably something there that someone else needs. You can save your money from buying a gift that you intended to buy anyway, and just redeem your miles for that gift instead.

Sign up for a credit card to top up your account

• If you have a reward redemption in mind, but don’t have enough miles yet, speed up the process by signing up for a credit card that offers a sign up bonus. Top up your account more quickly so that you can cash out!

Give your business to someone else

• Once you are done cashing out, just switch your business to another loyalty program (including cash back if you choose to do so). The best way to complain about a program is to not use them at all. Once they start losing business, they will figure out a way to win you back, or else they will just go bankrupt anyway. When a business is profitable, they have no need to attract and retain customers.

The next two parts of this post will talk about the bigger picture. What should you do so that you don’t end up in another Air Miles situation?

Diversify your Portfolio

If you have been staying up to day with this Blog, you already know that I routinely emphasis that it is important to diversify your portfolio. Basically, the reason is because you never know when unfavourable policy changes will hit your favourite program. I also talk about earning and burning, which I feel that I may not bring up often enough.

We never know when devaluations, favourite reward redemption gets take off the shelf, policy change, etc. will kick in. So after you earn, you’re better off using the miles or points as soon as you see a reward redemption that you like. You can always earn more miles and points for a future reward. Or better yet, have a diversified portfolio, so that you can use another program to redeem for the same or similar reward at a later date.

Set a Goal and Cash Out

Lots of people accumulate, just because, but without a goal in mind. Terms and conditions change all the time, so if you don’t cash out at some point, you may be caught in the middle of a change like the Air Miles situation.

Even though we are called Pointshogger. I don’t actually hog/hoard my miles and points. What I do is set a goal and cash out when I accumulate enough. The question is, what type of goal should I be setting? I am sure that you caught on already, loyalty programs have the ability to change their terms and conditions at any moment in time, without warning. So because I already know this as a fact, I avoid setting long term goals, so that I don’t get caught in any changes.

Of course, we all want to have 1 million miles and points so that we can do whatever we want. As I mentioned at the beginning of the post, if you are looking to save for a larger reward and you need a long time horizon to achieve that goal, it may not work out, unless you put in some work to do the necessary research to figure out some strategies. The goal must be realistic and attainable, knowing that terms and conditions can change at any time. Don’t get caught!!