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Do miles make a good holiday gift?

 
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December 4, 2013

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If you know someone who loves to travel,  air miles might seem like the perfect holiday present.

But before tying a (figurative) bow to a stash of miles, make sure you understand the process involved. Buying miles for another person can get expensive — fast. And even sharing a lump of miles you've already accumulated with your rewards card might not be a good deal.

“Transferring miles is a particularly thorny issue, with a lot of potential downsides,” notes Ryan Lile, founder of Frequent Flyer Academy, which specializes in helping people save money on airfares and maximize the value of their miles and elite status.

Fortunately, giving the gift of travel is still possible. Here, travel experts guide you through the obstacles involved with gifting miles so you can make a loved one's travel dreams come true this holiday season.

Purchasing is pricey

Most frequent flier programs allow you to purchase miles outright and have them placed directly in the recipient's frequent flier account.

“The cost to buy miles varies by program, but is typically between 2 and 3.5 cents per mile,” notes Casey Ayers, travel consultant and founder of PointsAway.com, a site offering advice on traveling with reward points.

At those rates, if you want to buy 25,000 miles (which is roughly enough for a round trip within the continental U.S.), you can expect to be charged between $500 (2 cents multiplied by 25,000 miles) and $875 (3.5 cents multiplied by 25,000 miles). For 40,000 miles, the price could run between $800 and $1,400.

There are also restrictions. You may be required to purchase miles in set blocks, such as in increments of 1,000 or 5,000 miles. You could also be limited by how many miles you can purchase each year.

Due to the high costs involved, Lile just about never recommends buying miles.

“If you are a couple of thousand miles away and have already found the reward space available, it might be a decent solution to top off the account,” explains Lile. Then, to give a gift, you could simply use the miles to book a rewards ticket in the recipient's name.

But what if you prefer to give those miles directly to the recipient so they can book their own trip?

“Purchasing miles for someone else makes the most sense when the lucky recipient already has ahealthy miles account and is only a few thousand away from the trip he or she has been planning,” Ayers says.

For instance, perhaps there is a round-trip flight on American Airlines to Europe that can be had for just 40,000 flier miles in the new year. After checking, you see that you can purchase 4,000 miles from American for $100. That comes to 10 percent of the total number of miles needed for the ticket — a nice boost for a recipient who doesn't have quite enough miles to make the trip. And, depending on ticket prices, purchasing 10 percent of the miles needed could end up being less expensive than offering to pay 10 percent of the ticket cost.

Sharing can bring benefits

Sharing or transferring miles you've already earned to another frequent flier account is generally a cheaper option than purchasing them.

“Transferring miles you already have typically costs about 1 cent per mile,” notes Ayers.

However, you can also expect to pay a transaction fee of around $30.

If you are thinking of transferring miles, first check the terms involved.

“Some airlines set limits on the number of points or miles you can transfer in a given year, so plan ahead,” says Christopher Barnard, president of Points.com, a site that helps travelers manage their loyalty programs in one place. For instance, you might be able to transfer only a certain number miles per year to a particular frequent flier account.

To save on fees for transferring miles, consider booking the trip yourself, suggests Lile. If you aren't sure which dates will work for the gift recipient, or the exact destination, write up a gift certificate that relates the number of miles you want to give. Then offer to sit down with your loved one and help map out a trip.

Sharing miles can be less costly if you watch for promotions.

“Sometimes airlines will have a 100 percent bonus on sharing miles,” notes Jeanne Marie Hoffman, co-founder of HeelsFirstTravel, a frequent flier site. Say you want to transfer 50,000 miles to another account. If you take advantage of a 100 percent bonus offer, you'll be able to transfer 50,000 miles, and the recipient will also receive 50,000 bonus miles (in addition the miles you transferred).

Certain programs, such as the Starwood Preferred Guest program, allow you to transfer points for free in certain circumstances. For instance, you might be able to share with other members of the same household at no charge. Under this setup, you could easily give a gift by transferring points (which can be redeemed for flights, as well as hotels) to another family member's account, provided the person lives at the same address.

Think beyond tickets

If the costs of buying and transferring miles are off-putting, you might still be able to put your miles cache to good use during the holidays.

“Miles can often be used in lieu of cash to purchase products from catalogs,” says Heath Suddleson, founder of BIZPassenger.com, a site offering information and tips on getting the most out of loyalty programs. United and Delta, for example, allow you to redeem your miles for merchandise in their online catalogs. You might decide to use miles to buy jewelry or high-end electronics for a loved one, although do your price comparison homework before you redeem those points to make sure you're getting the best bang for your buck. If you want to give a travel-themed gift, consider picking out an item the recipient could use on an upcoming trip.

You could also boost a loved one's upcoming travel experience.

“If you know the [travel] confirmation number of your friend or family member, you can upgrade them with your miles,” notes Suddleson. For an extra treat and depending on the airline's policies, “you might be able to do it as a complete surprise,” he adds.


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