Gadling

Perusing your favorite airline's frequent flyer web pages, you may have noticed that many of them offer a service to sell and transfer miles among friends. Points.com is a website that specializes in this task, and many programs from Jetblue to Delta to American Airlines participate in their miles purchasing programs.

Take heed before you get your wallet out and buy miles though: it's a horrible horrible deal. Take a look a these prices for buying miles taken from the Northwest Airlines website:

2,500 = $95
25,000 = $725
30,000 = $865

Now, if you recall from your frequent flyer mile handbook, a domestic ticket costs 25,000 miles -- so this basically equates to buying a ticket for $725. Any ticket, domestically in the US, whether this is between New York and San Francisco or New York and Detroit even if you're having the worst day of your life, shouldn't cost $725. And if it does, you can pretty well be sure that the flight isn't going to have award availability either.

Similarly transferring miles is also expensive:

5,000 = $75
25,000 = $300

With a $25 transaction fee. And the airline isn't even selling miles -- it's just moving them from column A to B in their spreadsheet.

Why would anyone take up this deal? Well, the least irresponsible excuse for buying or transferring miles is because you need to top up your account. You're just short of that 25k or 50k award and need another 5k miles to book your ticket as soon as possible. But it's important to remember the amount of cash you're dumping into your miles just to make them work. If you're dumping $100 dollars into a ticket to get it over 25k and your miles are valued at $0.02/mile (a common market ratio), you've just lost $600 in equity on a ticket. Was the market value of the itinerary that much? Could you have bought the ticket for $200 cash?

If you do find yourself in the above situation, try the following solution: take a deep breath, take your wallet out, hide it under the couch and take a good sharp look at your travel plans and finances for the next six months. There may be a time that you're traveling in the near future during which you can accrue a few more miles and balance out that account.

Or you're short on time and out of money, consider checking Gadlings guide to topping off your frequent flyer account.

Filed under: Business, Airlines, Transportation, Airports, Budget Travel, Travel Deals