Tricks to Redeeming Frequent-Flyer Miles

If you're a frequent business traveler, chances are you share two things in common with every other business traveler: you're a member of more than one airline frequent-flyer program; and you can never redeem your miles for when -- or where -- you want to go. How can you get the most out of your mileage program?

Successfully redeeming frequent-flyer miles is becoming a more frustrating exercise every day. Why? Because airlines have reduced capacity, they are flying fewer planes. Fewer planes mean fewer seats, and as that intersects an increase in demand, the numbers work against the basic payoff premise of loyalty programs.

If U.S. airlines are filling an average of 87 percent of their seats (that's more or less filling their flights), there's an exponentially diminishing incentive for these airlines to give away free tickets that would displace revenue passengers.

Yet, most of us joined loyalty programs -- in fact we were induced to join --by the promise that when we reached the 25,000 mile plateau we'd be on a beach with a piña colada in hand.

As more and more travelers will attest, when you hit that 25,000-mile level, the airline says:

1) There are no frequent-flyer seats available

2) There are seats available, but only at the 50,000-mile level

3) If you want to go from Los Angeles to Hawaii, they will route you LAX-Salt Lake City-Atlanta-Honolulu. On a Wednesday.

Facts About Frequent-Flier Miles
There are now more than 17 TRILLION unredeemed miles out there. To make it worse for business travelers, most of those miles are being earned by folks who don't travel a lot. They're using affinity credit cards that offer one mile for every dollar spent, or even more attractive mileage equations.

For the airlines, mileage programs are perhaps their biggest cash cow. In essence they are printing the currency and also controlling the redemption. If the airlines keep the redemption levels of eligible miles under 10 percent, that's a huge return on investment.

The airlines sell those miles to partners such as credit-card companies, car rentals and dining programs, at the cost of about 1.4 cents per mile. The airlines make money by selling miles to partners, and count on the fact that only a small fraction of those miles will be redeemed.

Tips on Being a Smart Mileage Consumer
1. Track Your Miles
MilePort.com is a user-friendly site that tracks loyalty programs for multiple people and accounts, and users can sign up for regular summaries of their accounts.

AwardWallet.com not only organizes the information from several programs, it also sends alerts if the account is about to expire. The site also offers trip-planning options including reservations for cars, hotels, or airlines.

MileageManager.com also monitors miles and expiration dates, but the big bonus is that for an annual fee of $14.95, it helps you search for award seats, which is often what we're collecting those miles for in the first place!

2. Maximize Your Mileage on the Ground
Besides offering double miles, Capital One's Venture card is especially friendly when it comes to redeeming those frequent-flier miles. If you've got 20,000 miles, you can purchase a $200 ticket, and so on, with no blackout dates. The other bonus is that Capital One doesn't charge that nasty foreign conversion fee.

Other credit cards are starting to follow the Capital One example, like American Express. So there's still a chance you can get the flight you want on the date and time you want, because you're actually purchasing a real ticket and not counting on the diminishing generosity of the airline frequent-flier programs.

3. Keep Collecting, But Not for Free Flights
In many cases, business travelers/frequent-flier mileage junkies have already given up on trying to get free flights. Instead, it's just to accrue enough miles to reach elite status with individual airlines, and hoping for the increasingly elusive upgrades.

4. Donate Your Miles
If you can't redeem miles for the flights you want, put them to even better use. Several major hotels and airlines partner with specific charities, meaning travelers can donate their points and miles any time toward a good cause.

American Airlines, for example, works with Operation Hero Miles, in which miles go toward providing a free ticket for military men and women and their families. In other cases, travel providers will convert your points into cash. After the disaster in Haiti, Hilton implemented a short-term program in which every 10,000 HHonors points equaled $25 to the Red Cross, which Hilton then matched, dollar for dollar. Within a few weeks, members raised more than $600,000, proving that even if you're strapped for cash in these tough economic times, it's still possible to help out.

Has your experience redeeming frequent-flier miles changed over the years?

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