Gifting miles? How to be smart about it

holiday rewards flightsIf you’re looking for a last-minute gift for the nomad on your list, all those airline miles you earned with your card this year might seem like the perfect fit.

But before you give miles, know that it’s not always a good idea. In addition to the costs involved, there are some obstacles that could make your present, while no less thoughtful, a bit less useful.

We asked some travel rewards experts about the smartest ways to give the gift of travel.

Know the costs

If you want to put miles directly into someone’s frequent flier account, you have two options, and neither is a very good value:

1. Buy miles: You can purchase miles directly from the airline. Typically, this will cost you 2 to 3 cents per mile, says Casey Ayers, managing editor of travel website PointsAway and author of “PointsAway: The Definitive Guide to Free Flights & Nights Worldwide.”

For example, American Airlines miles cost 2.9 cents each:

American Airlines buying miles

That means you’re likely paying more for the miles than they’ll be worth when your loved one redeems them.

“Typically, purchasing miles is a poor idea,” Ayers says. “… It’s possible to get more than 2 or 3 cents per mile of value on award tickets in most programs, but typically only on business or first-class international flights, and not on most domestic trips.”

2. Transfer miles you already have: Even though you’ve already earned the miles, the airline won’t just let you give them away for free. The cost of transferring miles from your account is typically between 1 and 1.5 cents, according to Ayers. American Airlines, for example, charges 1.2 cents per transferred mile:

American airlines sharing miles

While buying miles or paying to transfer your own generally won’t yield a great value, it can still sometimes make sense to do so, says Tiffany Funk of reward travel booking company PointsPros.

If, for example, you know your recipient is just 5,000 miles away from getting a reward flight for their dream trip, topping off their balance might make sense.

Look for purchasing/transferring promotions

Airlines sometimes run limited-time bonuses for purchasing miles. For example, in Fall 2016, United ran a 50 percent mileage bonus with the purchase of at least 5,000 miles. With a deal like that, gifting miles can be much more justifiable — so watch your airline’s website for similar offers.

Allow for delays

Whether you’re buying miles or transferring your own to a loved one, don’t do so speculatively, Funk warns, as reward space is too volatile.Gifting miles_Funk

Say your loved one dreams of going to Paris during spring break. You see that there’s a reward seat for 40,000 miles, so you buy or transfer that many points to the lucky recipient. However, it can take time for those miles to show up in his or her account (how long depends on the airline). In those several days, the reward seat might be gone – or require many more miles. If the destination is trendy (South Africa is particularly hot right now, Funk says), expect reward space to be elusive.

“Reward availability changes really rapidly,” Funk says. “And that can be frustrating. We have a lot of clients who are like, ‘I just bought all of these Delta miles, they were running this promotion, and I wanted to use them on this flight and when I went to book, the flights were gone!'”

You can prevent this if the airline allows holds on reward seats, Funk says. That way, the gift recipient can go through the booking process on the desired reward seat and put it on hold. Once the miles are deposited, they can book. Whether this is possible (and how long the hold lasts) varies by airline.

There’s an easier way

Don’t let the caveats above dissuade you from giving the gift of travel this season. If you’re considering transferring miles you’ve already earned, there’s a simple work-around: You can book a ticket for anyone using your own miles – no need to transfer.

“If you have the miles, simply booking a ticket for a recipient instead of sending miles their way can be a more effective option,” Ayers says.

So consider saving the cost and the hassle by giving your loved one a card and telling them to name a date and the destination. Then book the trip yourself with your own miles when the time comes.Gifting miles_Ayers

“It amazes me how many people don’t know they can do this,” Funk says. She once worked with a client who paid $5,000 to transfer miles into his granddaughter’s account, not knowing he could have booked the trip from his own account for no transfer fee.

Consider last-minute deals

If you’d like to give your gift a bit early, know that the holidays are a good time to snag last-minute reward seats, Funk says.

“There can be great things last minute,” Funk says. “Some airlines are really good about looking at their flight load a week before departure and realizing they didn’t sell all the seats they thought they were going to for Christmas. So they might put some of them up as rewards seats.”

 
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