For the past day or so I’ve had a browser window open with the latest US Airways purchase miles offer which runs through February 28. Because I’m being offered a 100% bonus, but not only is it ‘targeted’ this time (only some people have the offer) the offer varies for different folks. And I’ve been trying to sort out US Airways’ thinking here.
Some people get a 100% bonus, some people as little as 50%, and some people no bonus at all.
When you go to the purchase miles page they make you identify yourself.
Then they present you with your offer, here’s the one I got:
If you didn’t get a 100% bonus, but you want one and know someone that did then remember that the bonus applies to buying miles and gifting miles. So that person can buy themselves 100,000 miles and could gift the same to you.
And again, like the American Airlines bonus, points purchases are processed through points.com so they do not appear as though they are airline purchases — and hence do not earn bonuses with credit cards that give extra points for those.
Kids Who Like Data Playing With Targeting Software and Psychology
Isn’t it funny that a 50% buy miles bonus at American generates a price of 2 cents per mile, while a 100% bonus offer with US Airways generates a price of 1.88 cents?
US Airways used to be on of the cheapest to buy miles from, back when they started selling miles with bonuses nearly every month. But they’ve since both raised the price of miles and raised the price of most awards.
It’s interesting that they’ve bumped up the price of miles significantly at the same time they’re constantly discounting those miles. It almost seems like a Groupon for Lasik eye surgery, angling for the biggest headline discount they can come up with. Only I feel much more comfortable buying miles from
Groupon than I do cut-rate surgical procedures.
US Airways has much more complex targeted and data analysis tools at their disposal, as well, than they had back when they began selling miles at such a deep discount. And so we see many more targeted offers than we used to.
Although I’m genuinely curious what they could possibly be learning that then becomes actionable at the point where they keep running 100% bonuses. They can’t possibly be learning they don’t need 100% bonuses. And if they learn that some subsets of their member base are more likely to respond then what of it? Might as well make the offer available to everyone. The only things that could come of this are a means of segmenting customers (some would be willing to buy without the bonus or without as big of a bonus?) or excluding folks who redeem for high value rewards (but that’s not happening when they keep targeting me). So they experiment and play with their software and we’re left trying to figure out towards what end..
An American Airlines Buy Miles Strategy
If you’re targeted for a 100% bonus from US Airways Dividend Miles you can buy up to 100,000 miles (50,000 purchase plus 50,000 bonus) for 1.88 cents per mile. That’s 6% cheaper than American’s 50% bonus offer.
Or, you can get around the 60,000 mile purchase limit that American has.
Of course you have to believe that American and US Airways will merge. Most people believe that at this point, leaked stories in the Wall Street Journal are even that they’re talking about how to buy out remaining entrenched interests that might stand in the way.
And you wouldn’t be able to use the US Airways miles for oneworld for quite some time, or combine miles from the two programs for awhile.
But if you were buying miles for later use then it’s the case that the US Airways offer is cheaper. I do consider there to be greater than 6% risk in this strategy though so I’m not sure I would use the US Airways approach as a way to get American miles cheaper than American sells them. But some will.
The risk in buying miles for future use
US Airways hasn’t devalued their award chart in three years. There are some amazing values in that chart. A great strategy is to top off an account and redeem an award now. A less good strategy is betting that the miles you buy now will be worth as much in the future.
I’ve been expecting a devaluation, especially with as many miles as they sell ‘on the cheap’. They’ve also been rumored as one of the programs considering upending their business model and going revenue-based.
The expectation of an American Airlines merger is what changes all of this, I think they’d adopt the American Airlines award chart which is in many (though not all) cases more expenses but it would also mean – I would think – forestalling major devaluation. The last thing companies usually want to project to their customers during a merger is major upheaval, they tell folks that they’re going to “combine the best of both programs” while making some “changes you’re going to like.” And they wait through the honeymoon period before dramatic change. That’s my guess anyway!