Monday, February 22, 2010

Spend those Reward Points

I am not alone in my love of airline rewards points. Air Canada’s ‘Aeroplan’ program has over 4 million active members.

Many people save their travel rewards points year after year as they fantasize about an exotic future trip. This isn’t a good idea.

Did you know that in certain circumstances you can lose your points? Each reward program is unique so read the fine print of your specific program carefully.

Some programs, have an expiration date. Aeroplan’s expiry is seven years after the points were earned. With Jet Blue’s ‘True Blue’ program, you lose your point balance if you don’t redeem them within a year of your last flight. There are often ways to extend the period such as joining an affiliated credit card program, which in True Blue’s case keeps your points active up to 12 months after your last credit card activity.

Many programs also have a rule that if your account is inactive for a certain period of time, your points are lost. For example, if there is no activity in your Air Canada ‘Aeroplan’ account for 12 months you lose your points. You can easily keep your account going by simply buying juice or something else from a partner and inputting the purchase. Check out the Choose More program.

Depending on the situation, you can sometimes have the points reinstated. It never hurts to ask.

People worry that they’ll lose their points if the airline goes bankrupt. All airlines include a clause in their program agreements stating that they can change or cancel the reward program on short notice.

Many industries don’t want consumers to lose confidence in these programs because reward points are a huge customer incentive with a relatively small airline liability since upwards of 17% of airline points are never claimed. As a matter of fact, most airlines make a nice bundle by selling points to credit card, hotel, car rental and other companies not to mention the banks. These affiliated businesses use the points as their own customer incentives. If a floundering airline is acquired by another airline, the account points are usually also taken over

The greatest danger of losing points happens if an airline liquidates.

My advice is to make the most of your points and use them as soon as you can, thereby saving yourself the worry of expiration or airline liquidation.

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