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What's the Best Way to Transfer Reward Miles?

 
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July 22, 2013
Ask Eva
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QHi Eva,

I'd like to gift my dad 30,000 miles that I've accrued in the American Airlines Aadvantage program for his 60th birthday. I just had a baby, so I know I won't be using those miles anytime soon. My dad has had very few opportunities to travel, so I'd like to surprise him with the miles and let him choose the destination and dates on his own. What will it cost me to do this? I know I'll probably have to set him up with an Aadvantage account. – Courtney

ADear Courtney,

How exciting! That's a very thoughtful birthday gift, and I'm sure your dad will be very pleased.

There are several ways to transfer airline rewards benefits to friends or family, and it's a good thing you are checking, because it can cost you a pretty penny if you don't redeem rewards earnings the right way. The American Airlines Aadvantage program is similar to other frequent flier programs in this respect. Here's an overview of the different options and their pros and cons.
Ask Eva
Gifting miles: For frequent flier programs, gifting miles means buying “new” miles and giving them to someone, not transferring existing miles.

For the Aadvantage program, as for most frequent flier programs, you pay dearly for the pleasure of buying miles to give them to someone else: about 3 cents per mile, or $29.95 per thousand miles.

To see why this is a poor value, just do the math and calculate what a ticket would cost at this rate. The basic redemption requirement for a round-trip ticket using Aadvantage miles in the U.S. is 25,000 miles. At 3 cents a mile, that would be the equivalent of $750 for a round-trip ticket!

Sharing miles: Fortunately, you're not looking to gift miles, technically speaking. You're looking to share miles. Unfortunately, you're really not much better off. To share miles, you transfer miles from your frequent flier account to family or friends with an Aadvantage account, but you still pay for the privilege. For the Aadvantage program, transfers start at 2 cents a mile, and even though rates go down the more miles you transfer, you're still looking at $350 to transfer those 30,000 miles to your dad, plus a $35 transaction fee. At that rate, you might as well just buy the ticket for your dad.

Booking a rewards ticket for someone else: Gifting or sharing miles makes sense if you're one or two thousand miles shy of having enough miles for a rewards ticket. But as you can tell, it's not the best way to transfer large amounts of miles. Your best bet is to simply redeem the miles yourself and book the trip of your dad's choosing in his name. Yes, you can do that, and it won't cost you a penny. All you have to do is put your dad's name on the ticket when you book it.

Technically speaking, you could just give your dad the online login information for your frequent flier account and have him book the trip himself in his name when he's ready. But I'll let you in on a little secret about dads: More than likely, the act of planning and preparing for the trip together with you will be just as valuable to him as the trip itself.

So, your best gift to him will be working together to determine when and where he wants to travel and what his options are, given the number of miles available. To get the most mileage out of your miles, avoid holidays and popular travel days. Once you find the best rewards ticket option together, simply book it online for him in his name.

As they say: January trip to Florida: 25,000 miles. Three nights in a hotel on the beach: $550. Working with your daughter to plan and prepare the trip: Priceless.

Got a question for Eva? Send her an email.


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