Selling airline miles: Is it legal? Should I sell my miles?

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    Tony Mecia is a business journalist who writes for a number of trade and general-interest publications. Every week, he answers readers’ questions about credit card rewards programs in his “Cashing In” column.

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    Is it legal to sell airline miles? Should I sell my frequent flyer miles to a miles broker?

    Selling your airline miles isn’t illegal, but it is risky.

    If you want to offload the points to somebody you met over the internet, you have to actually buy the ticket for them and trust they will pay you back.

    And since loyalty programs forbid selling or bartering points, if the airline catches you, they have the right to excommunicate you from their program, void your tickets and seek repayment.

    There are other, safer options for sharing and redeeming miles. 

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      Dear Cashing In,

      I just read the CreditCards.com
      article
      saying that American Airlines frequent flyer miles are worth about
      1.9 cents per mile. But on the black market, I can’t seem to get a bid above 1
      cent per mile.

      Do you know of a miles broker who would pay somewhere in the
      ballpark of 1.9 cents? – Donny

      Dear Donny,

      When you think of items sold on a black market, you tend to
      think of things that are illicit, like blue jeans being smuggled into the old
      Soviet Union or drug deals.

      In the digital age, though, black markets thrive online,
      too. There are people willing to pay money online for hacked
      credit card data
      , Netflix
      passwords
       and, yes, frequent-flyer miles.

      If you have something of value and want to receive cash for
      it, there has never been a better time.


      But just because you have the ability to trade
      something doesn’t mean that doing so is legal or allowable. Trading in frequent
      flyer miles with somebody you don’t know is risky, and you should avoid it.

      See
      related:
      American
      Airlines AAdvantage guide: The best ways to earn and use AAdvantage miles

      Establishing value of frequent flyer miles

      A lot of people who avidly follow travel loyalty programs
      routinely assign values to points and miles.


      Doing that helps people compare the value of
      points across different programs. For instance, if you see a credit card offer
      for 50,000 AAdvantage American miles and another offer for 50,000 Marriott Rewards
      points
      , you can quickly judge which offer is probably more valuable – answer:
      American.

      Value of points varies widely

      But just because somebody values American miles at 1.9 cents
      per point doesn’t mean that every redemption will be worth that amount. It is
      really just a ballpark estimate.

      Further, there are varying philosophies on valuing points
      and miles and a plethora of factors that can affect the value of an award flight,
      such as the miles you lose out on earning by paying for a ticket with miles
      instead of cash or the lowest possible price you can get for a flight over
      time.

      You should always try where possible to stretch the value of your points and miles. For instance, if you are redeeming 25,000 American miles for a round-trip ticket, those miles are more valuable on a $500 ticket across the country (2 cents per mile) than on a $200 ticket to Orlando (0.8 cents per mile).

      That doesn’t mean you shouldn’t go to Orlando, just that you might consider if it’s worth using your points on a trip to Orlando or saving them for a more valuable future trip and paying out of your pocket for that flight.

      Selling frequent flyer miles is not allowed

      Not surprisingly, loyalty programs forbid selling or bartering points. They give you the points as a reward for being a loyal customer, not for you to dispense and sell as some side hustle.

      Some programs allow you to transfer points to a spouse or household member, but most have no mechanism for you to shift the points to somebody else without paying a hefty fee.

      Sharing miles with strangers comes with risks

      That means if you want to offload the points to somebody you met over the internet, you have to actually buy the ticket for them and trust they will pay you back or transfer the miles to that person’s account and pay a big fee for that privilege.

      That’s the first risk – that you are having to trust somebody you don’t know.

      The second risk is that the airline will find out and sanction you. American’s terms and conditions state that miles and award tickets cannot be “purchased, sold, advertised for sale or bartered. … Any such mileage or tickets are void if transferred for cash or other consideration. Violators … may be liable for damages and litigation costs.”

      But wait, there’s more from the lawyers: “Use of award tickets that have been acquired by purchase or for any other consideration may result in the tickets being canceled, confiscated and/or the passenger being denied boarding. … The passenger and member who attempts to use such a ticket may also be liable to American Airlines for the cost of a full fare ticket for any segments flown on a sold or bartered ticket.”

      OK, so American really doesn’t want you doing this. You might still consider that they might not find out. But airlines are becoming more sophisticated, and you might be setting off red flags by transferring points or buying award tickets for strangers.

      It’s not illegal, and you don’t have to worry about the FBI coming after you. If the airlines catch you, though, they have to right to excommunicate you from their program, void your tickets and seek repayment.

      Sharing, redeeming miles: Exploring other options

      It is tempting to receive money for points from an online
      broker. If you consider the risks to be too steep, you do have other options.
      The best value of airline miles is to use them for flights – if not for you,
      then perhaps for a friend or relative.

      In the case of American, you can also use
      miles
      for magazines, gift cards, newspapers, rental cars, hotels, and
      identity-theft protection. The value is inferior to using them for flights, but
      if you are in a pinch, those can be sensible ways to liquidate frequent flyer
      miles. You can also donate them to charity.

      Personally, I would avoid brokers and find another way to
      use the miles.


      Because of the risks involved, you’re unlikely
      to find somebody willing to pay that 1.9 cents per mile – that’s really the
      value they are worth to you, using award miles as they were intended: for your
      flights.



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