Month: August 2024

  1. American Express widened its targeting for adding employee cards to business charge cards, with a 15,000 Membership Rewards bonus after $4,000 spend in 90 days for up to five employees online. These links appear in your AmEx Offers tab, and reader Jim notes that they’re not necessarily on top but may be buried much lower.

    Any cards that already earned five bonuses of 15,000 Membership Rewards using online links from Spring will not get the online bonus again; calling in for offers still works for those and gives a higher capacity of 99 total bonuses per card though.
  2. Canada’s ultra-low cost carrier Flair Airlines has a promotion for $1 base fare (+ tax) tickets between many major Canadian cities and Las Vegas, Orlando, Los Angeles, Fort Lauderdale, Phoenix, Palm Springs, Nashville, New York JFK, and several Mexico airports.

    Surprisingly, I’m seeing limited availability around US winter holidays. I was able to price out a complete bare-bones ticket at ~$15 each way including taxes. That said, “you get what you pay for” very much applies here, and Flair makes Southwest look like luxury.
  3. Capital One has a 20% transfer bonus to AirFrance/KLM FlyingBlue through September 29. Availability out of Canada is often better than out of the US, which I guess pairs nicely with the prior item. (Thanks to virginiarph)
  4. If it was a Cruel Summer and now you’re Down Bad waiting to be Bejeweled to reset your Karma with a Blank Space and Shake it Off, Hilton is giving you a chance to bid Honors points to meet Travis Kelce. You probably won’t meet his girlfriend, but statistically speaking it’s likely your best opportunity on Earth to do so. (This news item was just for Shay at TCB)
  5. The Barclays Hawaiian card has an increased bonus of 70,000 HawaiianMiles after a single purchase using a link from an in-flight mailer. The $99 annual fee is not waived in the first year. For a promotional code, you can try a random number or email me for the promo code that reader Dean shared. (Thanks to Dean)
  6. Gary at VFTW notes that SkyTeam member SAS’s elite status match program doesn’t actually seem to be validating anything and is just awarding status when the form is filled out. So that’s a thing I guess.

Have a nice holiday weekend!

The SAS elite status match validation desk.

  1. Kroger has 4x fuel points promotion running tomorrow through Sunday on fixed value Visa and Mastercards and third party gift cards other than Amazon.
  2. Bilt’s rent day falls on a Sunday in September. This is also the last rent day for double points on up to $10,000 spend; in October the maximum double point spend will be $1,000. There are two main transfer bonuses on Sunday:

    – 50% bonus to Avianca LifeMiles
    – 25-100% bonus to Virgin Atlantic FlyingClub, based on Bilt status

    What’s the maximum transfer for bonus miles, especially Virgin Atlantic with its tiered bonus? They haven’t announced it so double check the terms and conditions on Sunday. (Cynical MEAB thinks that they haven’t announced the maximums because they’re really low, but go ahead and prove me wrong Kerr, please.) UPDATE: Gary at VFTW let me know that these bonuses are unlimited.
  3. Do this now: Register for Southwest’s promotion for increased elite status earning through November 30. (The promotion mainly gives 2x-3x tier qualifying points on flights, and 2,000 tier qualifying points for every $5,000 in co-branded credit card spend). (Thanks to Brian M)
  4. Do this now (if you live in Washington, or move into a closet there during the NFL season): Register for Delta’s 12Status program and you’ll get:

    – One SkyMile for each passing yard earned by the Seahawks
    – Priority boarding on Delta flights at SEA airport during the NFL season

    According to a random ESPN page, last year there were 4,167 passing miles.
  5. Vietnam Airlines has a paid, year long status match for non-SkyTeam elites. The price is $99 for low tier, $159 for mid tier, or $299 for high tier status. Vietnam Airlines has five status lines, these are the middle three. The lowest matched status SkyTeam elite, which gets lounge access on international SkyTeam flights including Delta. (Thanks to FM)

Happy Thursday!

A notorious churner’s Seattle NFL season rented “condo”, which houses a family of 4.

Introduction

Alaska and Hawaiian may merge. If that happens, Hawaiian miles will transform into Alaska MileagePlan miles in a way that “preserve[s] the value of HawaiianMiles at a one-to-one ratio“. This has a bunch of people excited because:

  • Alaska MileagePlan miles are hard to earn
  • HawaiianMiles are easy to earn via American Express Membership Rewards

Alaska MileagePlan miles are valuable partially because Alaska is smaller than the big four major US airlines, and partially because again, they’re hard to earn. HawaiianMiles aren’t worth much relative to most major airline currencies, but if the merger completes then HawaiianMiles will balloon in value overnight.

The Play

Of course, gamers gonna game, and the opportunity to turn low value, easy to earn miles into more valuable miles is an obvious and attractive play. In fact, I’ll be running this play; I too like turning low value things into high value things just as much as the next churner.

The Scale

How big should you go? There are risks to going too big, namely:

On the first point, what’s the expectation value for a time to devaluation? I’d guess it falls between 18 months and 24 months based on past history. How bad is a devaluation? Usually, an average 30% increase in redemption cost is a reasonable upper limit.

The Answer

That brings a simple math formula to calculate how many miles to transfer: the number of miles I expect to redeem in the next 18 months, plus the number of miles to redeem in the following 18 months devalued by 30%, minus the number of miles I expect to earn in other ways.

The numbers for me, which are based completely on how many MileagePlan miles I earned and burned used over the last 18 months:

  • 0-18 month range:
    • 900,000 miles to burn
    • 800,000 miles to earn
  • 19-36 month range:
    • 900,000 miles to burn * 130% for a devaluation
    • 800,000 miles to earn

Running the math:

miles = (900,000 – 800,000 + 900,000 * 130% – 800,000 = 470,000 miles

And if I do it before the 20% Membership Rewards transfer bonus to Hawaiian ends on Sunday night:

miles = 470,000 / 1.20 = ~392,000 miles

So, 392,000 Membership Rewards transferred will cover me (probably) for the next 36 months. Very mindful, very demure, very cutesy. But, what about travel past 36 months from now, you ask? I guarantee my situation, the US airline situation, airline transfer partners, airline alliances, and my travel needs will be different in 36 months, and speculation beyond that timeframe is at best a guessing game, especially since an unredeemed point is worth zero.

Happy transfers friends!

Alaska’s new 2026 alliance announcement.

  1. Do this now: Register for Hyatt’s promotion for 1,000 bonus points per night at Unbound Collection hotels between September 1 and November 30. The promo caps at 20 nights.
  2. Do this now: Register for Best Western’s fall promotion for double points on all stays between September 3 and November 18. The bad news with this promotion is that you’ll be staying in a Best Western.
  3. Meijer MPerks has $10 off of $150 or more in Visa gift cards in-store through Saturday with a clipped digital coupon. This type of promotion typically lets you reclip the coupon after each transaction too.

    Meijer carries both Sunrise and Pathward gift cards.
  4. Hy-Vee stores have have $10 off of $150 or more in Visa gift cards through Sunday. You don’t need to clip any digital coupons and you can repeat the discount ad-infinitum with new transactions, at least until the store manager runs you off of the property.

    These are Pathward gift cards. (Thanks to GCG)
  5. Bilt Rewards now earns on purchases at Walgreens made with any linked card, Bilt issued or otherwise. The earn rate on general spend is 1x for most items, or 2x on Walgreens house branded items.

    Gift cards are excluded via the terms and conditions, but may or may not actually be excluded.
  6. Office Depot/OfficeMax stores have $15 off of $300 or more in Mastercard gift cards through Saturday. For best results:

    – Buy in even multiples of $300
    – Try for multiple transactions back-to-back
    – Link your credit cards to Dosh

    These are Pathward gift cards.
  7. The Barclays Hawaiian Airlines Business card has an increased sign-up bonus of 70,000 HawaiianMiles after $2,000 spend plus a purchase. The $99 annual fee is not waived. The bonus is split into:

    – Main card: 60,000 miles after $2,000 spend
    – Employee card: 10,000 miles after a purchase

    The best play for gamblers is to bet that these will turn into Alaska MileagePlan miles next year at a ratio of 1:1. If they don’t, the best use will probably be either inter-island flying or using miles to upgrade a paid coach ticket to business on Hawaiian metal. (Thanks to BleedBlue__)
  8. Southwest has 30% off of flights to or from Mexico, Hawaii, the Caribbean, and Central America using promo code BEACHES for bookings made by tomorrow, and travel from September 29 through February 10, 2025.

    Blackout dates that you’d expect are present. And just like last time, John Wayne airport is excluded because Southwest hates any actors that promote the southwest as a region instead of as an airline.
  9. Chase Offers has 5%-10% back on Southwest Airlines airfare of $50 or more through September 6, on up to $400-$800 spend for a max cash back of $40. I suppose you could fly somewhere with a Best Western if you’re not into the whole “basic comfort” thing.

Happy Tuesday!

Southwest’s new marketing campaign is coming to a city near you.

Introduction

In one of the weirder developments of 2023, a year full of weird developments, American Express temporarily offered bonuses for downgrading its Membership Rewards earning cards to cheaper variants. It happened in late 2022 as well with the Delta cards too.

These offers have surfaced again in the last couple of weeks, proving that 2024 now officially exists in American Express’s mainframe.

What’s Going On?

The offers appear via targeted link in your online dashboard, via targeted email, or as a retention offer when you chat or call a customer service agent. Because these offers were visible to agents, my assumption in the past was that downgrade offers were an intentional decision by American Express to prevent losing card members who might no longer want a premium card.

My new opinion though is that these aren’t intentional, but rather a periodic bug in American Express’s systems because:

  • Their lifespans don’t match other AmEx offer lifespans (they’re shorter)
  • They’re targeting some members that have had the card for years,
  • They’re targeting members a few months after annual fees were paid
  • The T&C language specifically mentions the word “upgrade”
  • They’re only appearing on personal cards false, thanks to Bork

American Express’s technology stack includes a mix of systems that date back many decades, and I’m sure it’s hard to fully predict the outcome of a change in one part of those systems. I hope it’s obvious that in general that’s a good thing for churners.

How to Play It?

If you get one of these offers, I’d note a few things:

  • To avoid pop-up jail, keep the card open for 12 months after accepting a bonus (but only if you earn the bonus)
  • Earning one of these bonuses won’t put a new card on your credit report or affect 5/24
  • You can stack this bonus with a retention offer, assuming one is available after downgrade

Good luck friends!

American Express’s technology interconnection switchbox.

A balancing act that we frequently face in manufactured spend and churning is knowing how hard to hit a deal. If you push it too hard, you may kill it in days. If you don’t hit it hard enough, you’re leaving money on the table – potentially a lot.

What’s the magic behind how hard you should hit a deal and when you should back off? In my mind it comes back to two fundamental questions:

  • Who’s paying for your earnings?
  • What metrics, compliance, and regulations are important to them?

If you can answer those two questions then you’ve got a guide for how much abuse a deal will tolerate. If, for example, you’re dealing with a small, local casino’s loyalty program that’s relentlessly focused on bringing in gamblers, you can bet that they’ll know pretty quickly if they start paying out a ton of rewards due to your shenanigans. So, I’d treat such a thing as a short, surgical strike and try and run the deal low and slow over months or years.

On the other hand, if you’re dealing with a dinosaur bank that has disconnected legacy systems and trillions of dollars in assets, your debit card funding would probably have to get well into seven or eight figures before it showed up as a blip on anyone’s KPI dashboard, and on top of that they’d have to be curious enough when they see it to dig in and figure out what’s going on. So, this one is a probably a pedal to the metal play, understanding that time and not volume will probably make the deal die.

So, an unsolicited suggestion: When you encounter a new deal, think about who is paying for it and what their regulations are as a guidepost.

Good luck!

Sample bank KPI shenanigan finder.

EDITOR’S NOTE: Yes, today’s post has a lot of words (for MEAB), but there’s good stuff in there, or if not good stuff, there’s at least stuff. I promise.

  1. JetBlue has a status match challenge for elites of all major US airlines except Southwest, which I can only assume was excluded out of spite. The matched status is Mosaic 1 or Mosaic 2, which are low-tier and mid-tier statuses and don’t include Mint upgrade certificates.

    Status lasts three months and can be extended through the end of 2025 by receiving 10-25 tiles within the same timeframe.
  2. Bilt Rewards, the purveyor of fine food and dining to travel bloggers, the program founded by a gamer who hates gamers, has removed Hawaiian Airlines from its transfer partners page with no notice, apparently because contract negotiations didn’t lead anywhere fruitful for Bilt.

    Richard Kerr, the a VP of Travel at Bilt, “[is] confident the partnership [will] return shortly“. I like the confidence, but I don’t completely share it. My actionable take from this news is that I’m going to assume Bilt partners could disappear at any point without notice and act accordingly. For me that means never hold more than 50,000 Bilt Rewards, since the last transfer bonus was capped at that level and I expect future ones will be too.
  3. Kroger has a 4x fuel points promotion on third party gift cards other than Amazon and fixed value Visa and Mastercard gift cards in-store tomorrow through Sunday, again. They’ve also got a single use coupon for $8 off of two $100 gift cards through September 3 which pairs nicely with the fuel points promotion, in the same way that politics pairs nicely with scandal.

    The bulk resale market for gift cards is currently wildly volatile largely due to Pepper; if there were a VIX for gift cards (GIX?), it’d probably be approaching historic highs. (Thanks to GCG)
  4. The merger of Alaska Airlines and Hawaiian Airlines won’t be challenged by the DoJ, but the DoT may still put up road blocks. A few notes:

    – Alaska says they’ll “preserve the value of HawaiianMiles at a one-to-one ratio when they become Alaska Mileage Plan miles“
    – There’s a 20% Membership Rewards transfer bonus to Hawaiian in August
    – Hawaiian miles aren’t worthless, but they’re worth much less than Alaska miles

    I’ve seen the question “should I transfer miles to Hawaiian with the bonus?” in about a dozen places since the news dropped. My opinion that no-one asked for: Wait until August 30-31 to decide and see if we get any indication of the DoT’s feelings in the meantime. And also how many Alaska MileagePlan miles have you redeemed in the last 18 months? That should probably play into your calculus.
  5. Southwest opens its schedule this morning for travel through April 7, 2025. Booking tomorrow gives you, statistically speaking, the best random choice odds for gaming schedule changes during Spring Break, 2025.

    Fair warning on these flights: Southwest will have some form of assigned seats in early 2025, so you may find yourself paying for a seat assignment in the new booking window. (Thanks to JR76)

Happy Thursday!

More calculus, but put to evil. Also the answer is π because mathematicians hate society.

EDITOR’S NOTE: If the math formula doesn’t render correctly in your reader, check the website at this link.

Introduction

In advantage play (gambling with an edge over the house), the Kelly Criterion or Kelly Formula gives a simple calculation for the best amount to bet to maximize earnings. We can draw an analog for resellers, whether it’s the buyer’s group kind or the gift card arbitrage kind.

The Propeller Head Part

The generalized Kelly formula, rewriting a bit to express terms familiar to resellers, is:

\%_{float} = \frac{(1-p_{loss})}{\%_{loss}} - \frac{p_{loss}}{\%_{gain}}

Where:

  • %float = The percentage of your budget to float
  • ploss = The probability that you’re going to lose your profit
  • %loss = The percentage you’ll lose if a loss happens
  • %gain= The percentage you’ll gain if you don’t lose

A Simple and Specific Example

Let’s look at Pepper, which may or may not pull the rug out from under you at any point in the next year. With Pepper, you’re probably earning about 3.9% from your credit card (4x Membership Rewards, worth 4.4% cash back, times 90% due to Pepper’s convoluted redemption). Assuming your buy rate equals your sell rate after rewards are paid out (buy at 90%, sell at 90%), then we’ve got a simple calculation:

  • ploss = 10% (pick your own number here, but let’s say there’s a 1 out of 10 chance of Pepper failure)
  • %loss = 10% (worst case you lose all of the discount Pepper gives)
  • %gain= 3.9% (the percentage you’ll gain if you don’t lose, in this case Membership Rewards)

Then run the numbers and get:

  • %float = (1-0.10)/0.10 – 0.10/0.039 = 644% (when probability of loss = 10%)

What the hell, you might ask? Why is that number over 100%, and how do I invest that much? Well, the answer is either (1) you should float all of your bank roll to maximize profit because you’re much more likely to win than lose, or (2) you need 5.44 other players to help you.

Increasing the Chance of Failure

What if you think there’s a 30% chance of Pepper failure though? The calculation is again simple:

  • %float = (1-0.30)/0.10 – 0.30/0.039 = -692% (when probability of loss = 30%)

What the double hell, you might ask? Why is that number over 100% and also negative? The formula is telling you that if you think Pepper’s got a 30% chance of failure in the next 30 days, you shouldn’t invest anything; “kill it with fire” says the formula.

Finding the Middle Ground

So, what’s the cut-off at which the formula switches from LFG to hells-to-the-no? I’ll spare you the algebra, but it’s easy to find by setting %float=0 and solving for ploss. Doing that gives:

  • ploss (cutoff point) = 0.2806 = 28.06%

In other words, if you think Pepper is < 28% likely to fail before you can cash out your rewards, you’ll maximize your profits by playing the resell game. If you think Pepper is ≥ 28% likely to fail, stay away. (I generated a boring graph illustrating how float percentage varies with the probability of loss for turbo-nerds here).

Conclusion

The Kelly criterion is surprisingly insensitive for churning problems, switching from above 100% (1.0) to below 0 very quickly. But, if you’re 3/4 certain that Pepper isn’t going to fail before your rewards are paid out, keep going.

Special thanks to John Reeder for poking me on the subject, and another special thanks to John for the idea for a follow-up piece on the subject: what if you know they’re gonna steal your money, but not when? Stay tuned, or, like yesterday, don’t; you do you.

Another helpful MEAB plot.