One of the many irritants of travel-rewards programs is expiring miles. Typically, miles or points expire if there’s no account activity during a two- or three-year period. It’s a policy that’s irrelevant to high-frequency travelers, because they’re constantly on the go, pushing the expiration date forward with every trip. But for the great majority of travelers, who fly infrequently, the danger of allowing hard-earned miles to disappear is clear and present.
Sure, it’s easy enough to extend the life of miles, by making the occasional qualifying transaction or using a program-affiliated credit card. But such tactics aren’t widely understood or embraced by many of the travelers who stand to benefit from them the most.
And of course, airlines will restore expired miles to your account. But the cost to reinstate lost miles borders on the extortionate.
Not surprisingly then, there’s at least one legislative initiative in the pipeline that would outlaw expiring miles and points.
The Legislative Assembly of Ontario, Canada, is currently considering Bill 47, a proposed amendment to the Consumer Protection Act of 2002. The bill would prohibit loyalty programs from expiring members’ miles, except when the program is terminated, and require that programs reinstate all miles expired since October 1, 2016.
In presenting the bill, its author, MPP Arthur Potts, makes the following argument, likening loyalty points to gift cards:
We changed the Consumer Protection Act in 2007 to protect the investments that consumers made in gift cards so that they would not expire. We’re essentially doing the same here now, by recognizing that loyalty reward points are pretty much the same thing as a gift card. They’re the same, because they do have currency. When someone goes out and purchases goods or services and receives rewards, there’s an expectation that they could be transferred for value-added goods or services. And that’s no different than a gift card.
It’s a compelling argument, that’s sure to resonate with anyone whose miles have disappeared. It would be vigorously contested by the airlines, however, which have famously reserved for themselves the right to impose whatever rules and procedures they deem commercially advantageous.
And as a practical matter, if passed, the bill would only apply to residents of the province of Ontario. Rather than carve out special policies for Ontario citizens, loyalty-program operators would be more likely to prohibit them from participating in the programs altogether.
Given the choice between programs with expiring miles and no programs at all, it’s a safe bet that a majority of consumers would choose the former.
Reader Reality Check
Bill 47: Aye or nay?
After 20 years working in the travel industry, and almost that long writing about it, Tim Winship knows a thing or two about travel. Follow him on Twitter @twinship.
This article first appeared on SmarterTravel.com, where Tim is Editor-at-Large.
add they should retain the value that they were earned at, not lose value when the rates for flights go up.
I think gift cards are different in that almost all the time somebody paid cash for those. In the instances where people buy miles they usually don’t do it to hold them unused long enough to expire. If not bought the miles are awarded to encourage a minimum amount of repeat business.
No expiration of miles could also hurt everybody. With the increasing points/miles liability on the books some programs might be devalued (even more than now) or stopped. United now has about a 5 billion dollar liability on the books for outstand miles. I don’t if anybody knows what that liability would be if points never expired.
Lastly, these are “loyalty” or “frequent ____” programs. If your miles are expiring you aren’t very loyal. Let’s just further educate those that care how to easily (usually) keep their miles from expiring. It’s just unreasonable for them to assume they’ll be there forever.
The liability on the books of the program would case even great devaluation or curtailment. United has a $5 billion liability for miles already. Imagine the number if miles never expired.
I don’t get the gift card argument. Somebody usually pays cash or equivalent for gift cards. Miles/points are more often to reward repeat business. The miles that bought are usually bought with near term use in mind – not to sit and expire.
These are “loyalty” programs after all.