Inside Flyer‘s October cover story (ungated) is on monster shopping portal mileage deals that didn’t work out for members.

They were all deals that on many levels were ‘too good to be true’ but that at the same time shed light on the workings of the mileage malls which are very poorly understood — by design of the airlines and those outsourced companies running the shopping portals — and shed light on some of the questionable practices of those vendors, with at least tacit approval of the mileage programs.

In August I wrote about what could have been the biggest mileage bonanza ever: an offer on the US Airways and Hawaiian Airlines shopping portal sites to earn miles for transactions with web hosting company EasyCGI. The offers were very explicit that there were no restrictions whatsoever, any transaction qualified for miles.

When it came time for the miles to post, however, the whole thing fell apart.

It turns out that the US Airways shopping portal is contracted with Skymall. But Skymall outsources it to a company called FreeCause, which also runs the Hawaiian Airlines shopping portal. And FreeCause seems to have made an error in judgment in posting the offer.

See, they had an arrangement with EasyCGI to earn commissions on new web hosting accounts. But they posted their offer on the US Airways shopping portal as providing miles for any transaction. Members saw and responded to the shopping portal offer, spending money and believing they’d get miles based on the offer as-posted, unaware of the terms of the EasyCGI agreement with FreeCause stating that FreeCause wouldn’t get paid commissions on any offer. And mileage members aren’t party to that EasyCGI agreement with FreeCause — they don’t know about it and can hardly be bound by it. Instead members saw an offer and made purchases, oblivious to the fact that they were even dealing with a company called FreeCause, let alone that they would only get miles if FreeCause got paid commissions, regardless of what FreeCause promised on the US Airways Skymall shopping site.

While I haven’t seen the specific documents between FreeCause and EasyCGI, it’s not even obvious that FreeCause was acting properly under the terms of their agreement to offer any miles in exchange for commission-earning activities with EasyCGI.

And since FreeCause didn’t get paid, they refused to award miles. Ultimately I understand that consumers were refunded the money for their purchases, but FreeCause claims to have no liability based on EasyCGI’s terms which consumers were unaware of and which apparently FreeCause misrepresented on the shopping portal.

Now, the offer itself amounted to an opportunity to buy US Airways miles at less than a tenth of a penny a point, so was probably ‘too good to be true’ (though several other offers that have seemed too good to be true over time have been perfectly legitimate and rewarding).

But before this debacle, an offer I wasn’t aware of at the time and didn’t participate in, I was completely unaware of the complex nature of the shopping portals. Or the ‘buyer beware’ stance that they would take with their customers.

The Inside Flyer article includes this blog post in full which I wrote on the workings of the mileage mall, how opaque it is, how members really don’t even know whom they’re dealing with.

FreeCause made consumers an offer thinking it would get affiliate commissions, whether based on EasyCGI’s terms or not. EasyCGI won’t pay, so FreeCause gets no cash and therefore they do not wish to pay. That’s my sense of what’s going on. FreeCause is supposed to be buying the miles but only wants to do so when they get paid by EasyCGI, who doesn’t want to pay.

None of this is transparent to consumers, who see an offer and follow it, thinking that’s the end of the story.

Now FreeCause is trying to figure out whether they can get money from EasyCGI or whether they can blow off mileage mall shopping consumers. And they don’t know yet which strategy is more likely to succeed, so consumers just have to wait to hear something.

I admit, I never really understood the relationships involved here before. In fact, I remember wondering why I had to create an online account for AAdvantage eShopping when I already had an AAdvantage account! After all, shouldn’t my AAdvantage account just work for the shopping portal? Since it was American AAdvantage, I had no concern whatsoever giving them my frequent flyer number and using the same password for both!

I mean, I understood the affiliate relationship–but I just assumed the programs ran those, they get paid by the merchants and rebate part of the commission in miles. I didn’t really ‘get’ the third party involvement.

Also in August, the American Airlines shopping portal — not run by American Airline AAdvantage but by a company called Cartera Commerce — posted an offer for about 83,000 miles in exchange for any transaction through the Verizon Wireless store.

A bit of an obvious error, that. Members could buy items less than $5 and earn over 80,000 miles? The economics clearly wouldn’t work out. And Cartera Commerce didn’t honor it, instead offering that customers take refunds for their products and awarding compensation of 2500 miles immediately and 2500 more miles for making an additional purchase through the shopping portal within a month. So members taking advantage of this offer certainly came out ahead.

But what’s interesting is that (1) Members were contacted by Cartera Commerce, they weren’t at all dealing with American AAdvantage, despite shopping through the AAdvantage portal, and (2) that Cartera Commerce cited Verizon’s rules which weren’t immediately obvious to the purchaser when shopping the site, saying that only new wireless plans earned miles — a claim directly contradicted by the very offer being made on the site, which was that specific items would earn large quantities of miles.

Taken literally, the position offered by both FreeCause and by Cartera Commerce is that members dealing with them are subject to the terms and conditions of merchants, terms and conditions that they aren’t a party to and are likely unaware of, and if the shopping portal does something contrary to those terms and conditions then it’s the member who gets nothing.

And to the extreme, a shopping portal could put out an offer intentionally, the member could follow instructions to the letter, and the shopping portal doesn’t consider itself obligated to anything if the offer they made doesn’t conform to the terms and conditions that the portal agreed to with the merchant.

All of this is being done in the name of the mileage program.

Using the US Airways Dividend Miles or American AAdvantage name, a third party company markets to a large database of members. Member shopping earns that company a commission, and that company buys miles from the program to award to the member. All the while, the member thinks they are dealing with their mileage program, but the mileage program isn’t really involved — it’s just their name that is being used, and the third party is just buying miles from them.

These things can go wrong even when the offers aren’t as obviously mistakes, Cartera Commerce also manages the Delta Skymiles shopping portal and at the same time offered 2300 Delta miles for any Verizon transaction, something which is much more in line with the sorts of offers one usually sees. But they didn’t honor that one either, instead offering compensation of 500 miles.

Finally, the Inside Flyer piece goes into detail on the current United “Months of Miles” offer which allowed explicitly unlimited bonus miles for partner transactions — and then after the promo was released, they retroactively changed the terms and conditions of the offer to cap the bonus at 25,000 miles per member. Ultimately they agreed to honor bonus miles earned over 25,000 prior to the introduction of that threshold.

These programs can be lucrative, offering rebates for shopping that you’ll do anyway, you’re better off going through a shopping portal (or cashback site) than not going through one in most cases. But they are anything but transparent, you aren’t dealing with your favorite mileage program even though you think you are, and given the small margins involved you can’t really expect good customer service from these programs.

  1. jerry said,

    Thats a lot of info to digest. If I do want to get miles through a shopping portal, which is a good one to choose? One that is simple, honest and easy to use. I understand that if I go after the special deals, my miles may vary.

  2. Super said,

    Have there been any comments from the airlines regarding the handling of these issues by FreeCause and Cartera Commerce? Personally I associate this mess with the airlines. I am likely to fly with them again. However I am unlikely to trust promotions associated with the airlines and I am unlikely to use the their online portal to buy an airline ticket.

  3. reid said,

    Miles are currency to the airlines, and should be regulated as such for business practices. If someone said “get 3 cars for $10″, and it was clear, they would be forced to honor the deal. Just because miles aren’t actually tangiable doesn’t make them any different IMHO.

  4. beaubo said,

    Freecause ‘settlement’ correspondence comes over TWO MONTHS after our purchases and despite our direct contacts with Freecause President over that period of time.

    Most perplexing is that Freecause does not explain WHY they posted a ‘no restrictions’ offer in the first place. And WHY such an offer was posted for weeks if not months, especially when the volume of transactions was so transparent.

    The Freecause letter below acknowledges NO accountability for their apparently FLAWED ‘no restrictions’ offer that violated all of their separate and undisclosed affiliate agreement T/C with EasyCGI for what constitutes a ‘qualifying purchase’.

    Please understand I have no problem with giving companies benefit of the doubt on ‘mistakes’. But the Freecause letter below conspicuously does not admit that THEIR offer was in error even two months later.

    Dear Dividend Miles Member,

    Thank you for your inquiry regarding the transactions you placed with Easy CGI through the US Airways Dividend Miles Shopping Mall (the “Mall”). We apologize for the delay in responding to you, but we were still waiting for a response to a number of questions submitted to Easy CGI.

    We have discussed the transactions in question with the merchant, and Easy CGI’s position is that these transactions did not meet the requirements of a qualifying purchase for which they will pay a commission. It is the receipt of this commission that allows us to then credit you with miles in the Mall.

    The decision of whether a particular transaction qualifies for miles awards is made by the merchant. Should a merchant decide that a transaction is not commissionable, we have no contractual authority to overturn that decision. Here, Easy CGI initially sent us a report that included transactions attributable to you. They subsequently sent us a report cancelling out each of those transactions after their determination that the transactions did not fulfill the requirements of a qualifying purchase. EasyCGI has also confirmed that they have refunded all of the purchases made with respect to this offer, so you have not been charged for any of these transactions.

    We also understand that EasyCGI has taken the position that they did not authorize FreeCause to make the offers on the Mall. This is not correct and we do not understand why they are taking this position. Until EasyCGI terminated FreeCause as an affiliate in their program in July, FreeCause was an affiliate for EasyCGI for a number of years and was affirmatively accepted by EasyCGI into their program with the understanding that FreeCause provides loyalty and incentive malls, expressly including the Mall in our description of properties.

    As we have indicated above, we cannot control the decisions of a merchant. We sincerely apologize for the inconvenience you may have experienced and we appreciate your patience. In consideration, we have been authorized to issue you a goodwill credit of 10,000 US Airways Dividend Miles as a courtesy and thank you for your continuing business. The processing for these miles has already been initiated and we expect that the miles will appear in your account within 4-6 weeks.

    We thank you for your patience and understanding in this matter.

    Best Regards,

    Dividend Miles Mall Customer Care

    dividendmilesmall@freecause.com

    Tel: 1-888-238-8495

  5. Greg said,

    Come on, guys, this is just silly! You’re delusional if you think these mileage malls were going to pay out hundreds of millions of miles for your penny purchases. It doesn’t make any business sense. I know you all like to ramble about customer service and goodwill and standing by one’s offer, but there’s a point where honoring these mistakes becomes cost prohibitive. Some of us have pulled these deals off in the past -the Goldpointsplus, LLBean, 1800FLOWERS deals come to mind- but the key is MODERATION. Sure, milk it for a few hundred thousand miles over a few weeks, but don’t go all in with tens of thousands of automated purchases in a day. These deals can be highly profitable if you work them from the correct angle! You really only have yourself to blame for ruining a good thing!

  6. Gary said,

    @Greg I didn’t expect the Verizon / AA deal to pay out. If you read the initial post I link to on that, I gave it a VERY low likelihood of paying out. And I didn’t complain when it didn’t pay out. I beleive the really interesting thing that’s come to light through all of these issues is how the mileage program name is being used by you are not dealing with the mileage program. Even when it’s clearly outsourced, e.g. to Skymall, Skymall is then outsourcing further. And the mileage mall operators take the position that you are subject to terms and conditions OF THEIR VENDOR CONTRACTS even when those contracts are not available to you to examine. Put differently, if they don’t get paid you don’t get paid. Regardless of the offer.

    It’s been a real education in the non-transparency of mileage malls, how the airline programs are renting their names but not overseeing the use of those names, and the ‘interesting’ terms under which they operate.

    As I say, it often works out and is worthwhile, but I’m also uncomfortable with some of the business practices here — whether anyone ought to have received miles from these specific offers or not, which we can debate long into the night…

  7. reid said,

    Since when is it my job as a consumer to vet an offer made by a fortune 500 company to see if they really meant it?

  8. danray said,

    I also never got the 2350 AA miles for signing up for Sittercity before they changed the rule on getting miles, also never got the Delta miles for watching the Bose video, and just noticed that the US Air toolbar for Amazon shopping just changed from getting 1 mile per dollar to .5 miles per dollar spent. At least they let you know although I’m still unclear what happens if you subscribe to an item.

  9. Panda said,

    Moderation has nothing to do with this. The problem is the bait and switch by Cartera and United. Then the companies lie and try to pass the buck. I am glad these companies are getting more negative attention for shady business practices.

  10. Seth said,

    Sadly, reid, you actually have no recourse. Read the T&C contracts on the malls and get an understanding of consumer protection laws and contracts law before you start making claims that companies would be “forced to honor” offers. They wouldn’t.

  11. BostonFlyer said,

    The simple ‘buyer beware’ and ‘if it looks too good to be true’ it is. Like others who read these blog I took a flier but I was not expecting any miles and I am not distraught about the mile never posting. But I have learned a lot about how these programs work which in the long run is good for me. As for the buck passing that is not surprising at all.

  12. marathon man said,

    I participated in all of the above. Those that did not “look too good to be true” as well as those that did.

    With the UA/HA gig I think EasyCGI is bad news and I think FreeCause should be put out of business-at the very least a bunch of people who work there should be fired. They made a blunder. Someone there has to pay! And now both airlines have gone silent, meaning they too have some scammy people working for em! I got 10k posted in both my US and HA accounts. I was looking at well over a million in HA. I do still expect to see that one day.

    In the case of the AA gig, I may lean toward knowing it was or could have been a mistake fare, but would definitely go for it again if led down the same path. After all, ya never know what may post, and hey, screw these people!

    And in so doing, I discovered Cartera, who runs the mall of AAdvantage. Cartera is not only in my back yard (and so is FreeCause btw) but also has a bunch of ill-trained personnel working for them. They are huge too and they handle the malls for most major airlines. Cartera lied too. I have yet to see any 2,500 miles nor any second set after having done a new purchase. So they roped me into doing that second purchase! (It has in fact even posted to my AA account so where are my 5k miles? And my wife’s too?) Scam. Pure scam.

    I always had a problem with many mileage mall partners of various airlines failing to post or making me wait some ungodly amount of time like 10 weeks to see my miles. I think that’s a scam. I do not even know why I bother anymore. I guess I must like the fight after all.

    United’s mall gig, also run by Cartera, is a complete mess. The latest is that a bunch of us have had transactions from HomeDepot.com MINUSED out of our Mall activity before they even posted, meaning our entire mall accounts are in the negative! Not even possible! But it happened. So I currently OWE miles to United on something they should owe me. Long story–and I put in calls and emails to three different types of personnel at United and Cartera. The latest latest is that they up and changed the mall portal. Why, just yesterday it had some error on it where we earned $ not miles. Well, guess what: I kinda want my $ now! mistake fare screen shotters go have fun with that one! the new mall site is buggy and has not been tested.

    All of these gigs are missing a key component in anything marketing:

    PROOFREADING!

    When I worked in graphic Design at major Boston area ad agencies in the 90s, PROOFREADING was the key to life. When I got more into marketing, this remained the key to life. One the web, it is both critical AND easy to be sure to get right because you can change a live website at any time! And so you should test it internally beforehand. But none of the fools who make FreeCause and Cartera possible even care to do this.

    And yet there are people out of work today.

    Let’s say we give THEM those jobs! Solve some econ issues, eh?

    Basically, this has left a sour taste in my mouth. I mean, if FreeCause is Pepsi and Cartera is Coke, I am not really into wanting to drink soft drinks anymore, know what I mean? They all taste like crap.

    I hardly want to do ANY online shopping where some sort of reward may come of the clickery. I have to check first to see if there are ANY affiliation to anything involving either company first… and then maybe I will go through with it. Otherwise I may actually chose to JUST shop at the company directly online or off. i would rather not allow some idiot scammer to get a commission on my purchase than to sit here wondering if and when I may get it, and if I do not, that person still gets the comm.

    Unless and until FC and Cartera Cartel shape up, they have lost me and anyone I tell as customers. And I will tell everyone I can. In the mean time I guess the best thing to do is to find holes and maybe game the system where I can. Like I said, screw these people!

    MM

  13. Robert Hanson said,

    I wish it was just the obvious errors that one had to be concerned about, but it’s not. Last fall I joined the AAdvantage shopping mall, just like everyone else thinking it was being run by AA. There was a holiday bonus program with Ballard Designs, offering a bonus of 4 miles per dollar spent. I bought a wall clock for $250, not thinking that getting my 1000 bonus miles would be “too good to be true’.

    Now, after some 20 emails to AAdvantage shopping, over a period of 9 months, I have still not gotten that mileage. Typically, I send them an email {there is no phone number available} and 5 or 6 weeks later get a response of “we’re investigating it”, then nothing more until I email them again.

    A week ago, after my email threatening to take it to small claims court, I finally got an email back that said “sorry for the inconvience, you will get the miles in the next few days”. That was a week ago, and guess what, still no miles.

    How these companies stay in business, without delivering on their promises, and with virtually no customer service at all, is beyond me. I know I had expected to do lots of business with them, and instead do none. I’d rather buy thru Amazon, which doesn’t promise me any miles, than thru a company which promises me things it refuses to make good on.

  14. marathon man said,

    I have another few questions…

    So ok, we see a deal. Looks good. So do we, like… CALL someone at the airline or the store to see if it’s real? Which someone do we call? Is that someone THE end all be all person of knowledge? Should we record their call and hold them to what they say? Is what they say actually the truth or would some other someone there tell us later that this is not true? How do we know? Who knows? Who pretends to know?

    And oh, if I call that someone did I just ‘ruin’ a deal that might have gone through had no one called? So should I EVEN call to begin with?

    But even if I do call and they DO say, “YES SIR! it IS right, you DO get X when you do Y!” then what if they change the terms or make a mistake?

    Take UA and their effed up MoM promo… I got a printed POST CARD in the mail targeted to me that says I can do 3 transactions of $10+ each and get 1,000 miles for this. UNLIMITED.

    I even called MileagePlus and RECORDED my phone call –and told them I was doing that– to hear the CSR state that this does in fact read correctly and I am in fact registered.

    I read every term. I did everything exactly right.
    I bought $10+ items on the UA mall.

    Now, yes, I bought 700+ items, so there is that… But who is to say what is too little or too much for a person? Who is to judge this? What is ‘moderation’ to a man planning to finish his basement and needs to spend $7,000 at Home Depot?

    I bought 700 Home Depot gift cards. There was no rule against that. Not at the time. Gift cards were legitimate purchases. The merchant and a cashier may think it’s strange, but hey, this method of purchase gave me a potential end-savings so I naturally did it in this fashion! In the end, Home Depot just earned my business and my wife is happy I am working on the basement!

    I am not sure that United’s mall or even Cartera has a problem with my type of transaction–in fact I dont even think they do in my case. I do not know if somehow these GCs do not count toward the 1,000 miles thing on my post card, but I do know this: Their systems DID fall apart because they did not foresee what type of huge response they would have to all of this. And so what they did was collapse on us. When this happened, they nipped the unlimited and changed the rules–I think 3 times.

    Why, I therefore ask… is that OUR FAULT?

    I do expect that at some point all my miles will post.

    I also bought about $4,500 in Sams Club GCs and expect to see everything post from those as well. Again, if I know I can and will use what I buy, only my wife has the right to tell me I spend too much. Moderation is all relative.

    :)MM

  15. toomanybooks said,

    IANAL (fortunately), but I fail to see how if Company A and Company B have agreements with one another, it has squat-all to do with me, party C.

    I’d really like an explanation of this from some attorney.

    Of course, I never get involved in these silly “.1 cent per mile” deals, because they never work out. Gotta figure my time is worth something.

    I do wonder how many hundreds of times companies will keep falling into the same traps before they figure out what they are doing.

  16. reid said,

    Seth, that is why I am calling for regulation. Language that says “we can do whatever we want and get away with it” should be illegal. Many courts will throw it out if they get sued, but still…

  17. Katie M. said,

    So, I realize that both of these were mistakes and that nothing is owed to me, technically, according to the details, but I am still curious:

    I bought something with the 83k AA mile Verizon mistake and also with the 2300 mile Delta Verizon mistake. I never received any emails from Cartera regarding the compensation miles that some people seem to have gotten. Did EVERYONE get these emails & compensation miles, or only some subset of people? Which subset?

    I know I’m not going to get 83K + 2300 miles, but I wouldn’t mind receiving the consolation prizes. Is it worth me emailing someone? If so, should I contact Cartera?

    Thanks.

  18. Gary said,

    @Katie M if you didn’t receive the emails you should submit a missing points request through the shopping portal websites.

  19. Katie M. said,

    Thanks! And thanks for ALL the great info and discussion on your blog – I enjoy reading it.

  20. Meta Updates About the Blog - View from the Wing said,

    [...] offers from EasyCGI (US Airways, Hawaiian Airlines) and Verizon Wireless (American, Delta), I realized just how ignorant of affiliate marketing I really was. I didn’t even understand why I needed to create a separate AAdvantage Shopping account, [...]

  21. Earn Up to 500 Bonus US Airways Dividend Miles Shopping and DM Toolbar Gone - Mommy Points said,

    [...] have time right now to get overly detailed about the world of who runs online shopping malls, but this post by Gary @ View From the Wing should offer some insight.  All in all, this is probably bad news.  [...]

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    [...] Commerce” that also runs the American Airlines shopping site and we have all had some recent experience with [...]

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    [...] The absolute first thing I look at whenever there is any type of mileage deal is “How Much Will This Cost Me If I Mess It Up”? While it is extremely easy to get caught up in these types of promotion and go completely overboard,  you always have to factor in the cost of something going wrong. Risking $500 to earn 25,000 miles isn’t really a worthwhile bet especially when you are dealing with shadow affiliate programs like Cartera. [...]

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  26. Add A Comment

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