MSE News: Costs to soar in Airmiles revamp: use points before they devalue

jackieblack

Doc_N wrote: »

Sorry, but the inflation argument just doesn't wash.

Costs rise, yes, and that's why airfares rise. No problem with that.

The difference with Airmiles, though is that Airmiles have already had the money from whoever provided the Airmiles upfront. They invest that money, and they've got the use of the money for the whole time between the issue of the miles and their eventual redemption, perhaps several years on.

Isn't that exactly the same as a shop putting its prices up after someone has bought a gift voucher?

Doc_N

jackieblack wrote: »

Isn't that exactly the same as a shop putting its prices up after someone has bought a gift voucher?

I take your point, but I see it as a slightly different situation - more like the situation where you pay for goods in advance, leave them with the shop for a while, then go to pick them up later and find that they want to charge you a higher price on top of what you've already paid.

jackieblack

Doc_N wrote: »

I take your point, but I see it as a slightly different situation - more like the situation where you pay for goods in advance, leave them with the shop for a while, then go to pick them up later and find that they want to charge you a higher price on top of what you've already paid.

I see what you're saying, but I don't agree.

In your scenario you have selected your product, made a commitment, purchased it and it has been removed from sale. the shop are simply storing the item for you.
If you had selected your flight and purchased it, then just before you came to take your flight the price had changed and they were asking for more, I would agree, but this is not what has happened.

You have 'purchased' some points, which can be exchanged for a product of your choice at some point in the future, provided what you want is 'in stock' - if the prices go up in the meantime.... well surely that's the risk you take by delaying your 'purchase'?

malkie76

Shops frequently put prices up after people buy gift vouchers. You £100 at time of purchase, not time of redemption.

There's no reason, given that background, for the number of miles for any given flight to increase.

Firstly, for the most part the miles required hasn't changed, and even done down on some routes.
Secondly, the cost of fuel has dramatically increased while the returns on investments has gone drastically down.

Any

Got an email from Avios this morning...
Due to Tesco's points going down to 1 point per £1 again Airmiles are going back to 60 miles (or 600 Avios) per £2.50 of Tesco. And Bonus time in Feb 2012 - 1000 Avios for every £2.50!!!

As I already have some Tesco vouchers saved up and then in November statement some more will come, I will wait with exchange to Feb and get loaaads of Avios...

Few flights to Prague awaits me next year I think!! Huraaaaay

Any

malkie76 wrote: »

Shops frequently put prices up after people buy gift vouchers. You £100 at time of purchase, not time of redemption.



Firstly, for the most part the miles required hasn't changed, and even done down on some routes.
Secondly, the cost of fuel has dramatically increased while the returns on investments has gone drastically down.

You make very good points.

malkie76

You are very kind

I just think airmiles users need to be more realistic about the current climate - would you prefer the company to go bust eliminating all of your currency ?

Of note now is that they are offering massive conversion bonuses if you convert next Feb - an extra 40%, which is rather generous.

Doc_N

malkie76 wrote: »

Shops frequently put prices up after people buy gift vouchers. You £100 at time of purchase, not time of redemption.
Firstly, for the most part the miles required hasn't changed, and even done down on some routes.
Secondly, the cost of fuel has dramatically increased while the returns on investments has gone drastically down.

There's an analogy with funeral plans here, though. You pay in advance, with the advantage that when the time comes everything's covered - whatever the rate of inflation has been in the intervening period. The funeral company (eg Co-operative) has the money, and you get the funeral, even if the costs have gone up several times over.

There's no basic difference with the Airmiles scheme. They've had the money in advance, and these price increases (the second major round of increases in recent years) are just a way of increasing their profits.

Hugely unpopular on Facebook and Twitter - I'm amazed that people here (of all places) can't see that they're being conned!

Any

Doc_N wrote: »

There's an analogy with funeral plans here, though. You pay in advance, with the advantage that when the time comes everything's covered - whatever the rate of inflation has been in the intervening period. The funeral company (eg Co-operative) has the money, and you get the funeral, even if the costs have gone up several times over.

There's no basic difference with the Airmiles scheme. They've had the money in advance, and these price increases (the second major round of increases in recent years) are just a way of increasing their profits.

Hugely unpopular on Facebook and Twitter - I'm amazed that people here (of all places) can't see that they're being conned!

Sorry, but your comparison is completely off the line.
It is a special deal by Coop and other companies, kind of an insurance and they promise no price change, no inflation or no nothing for the cost increase in their marketing, their contract etc.

I cannot see how you can compare that with Airmiles/vouchers, who never promised anything like that and even say it can change in their T&C. Some vouchers even expire after time, even though you have paid money for them and that is also completely legal.

You only pick part that justify your argument, without taking in account the whole picture, ie T&C and actually comparing like for like!!!!

malkie76

I think Doc N's analogy is fair, but actually agrees with the airmiles change in policy perfect - ie that fees are not included in funeral plans.

Taking Co-Op for example;

Co-op_Funerals wrote:

9B. All costs related to the interment or disposal of ashes - such as Local Authority fees, ministers’ fees, ashes caskets, transport costs, and any associated Funeral Director’s
services necessary to carry out these arrangements - are not included.

(taken from a PDF on their website - I'm pretty sure you aren't allowed to link to PDFs on this website for security reasons)