I’m sorry to have to break this to you, as I know that you have frolicked your way through life thus far without a care in the world, waltzing through an abundance of ways to earn points and miles for Free! Your friends often wonder how you can travel the world for free, when they have to grind out a miserable existence in the office, and we both know the secret… it is The Points Fairy.
The Points Fairy in her majesty sprinkled 5x opportunities on your Vanilla (RIP) granted you 25,000 miles for changing your ESCO, and even 30,000 United miles for signing up for DirectTV. I’m not sure where it all began, but at some point, your friendly Points Fairy started turning into a bit of a monster, and I find it funny that other people haven’t noticed the changes in her too. Let me illuminate you, because more and more the Points Fairy has started to sell you out, and the second she discovered that she could get paid for waving her magic wand around, she became quite the slut.
Points and Miles are being used to deceive you
This is not rocket science. Points have value, they are a lure, they are shiny baubles designed to take the eye away from where the money really is. With credit cards many savvy people recognize this and are able to navigate that line between earning lots of points and not paying any interest. But sometimes even the savviest of folk seem to turn into blathering idiots when it comes to earning.
Why is it so hard to focus on the bottom line, and think of each new opportunity from the perspective of the company. Let’s look at that classic that comes up and pisses me off royally, Free United Points with Wine! Yes, the Points Fairy has cropdusted this one with her sparkly waves of magic, and created a deal almost too good to be true…
So lets look at this: You get 6500 United Miles, and 6 Bottles of wine for what, $41.95 including that penny for shipping? OK not bad. I can see why people might want to do this, and there is a ‘cancel anytime’ option too. What’s more you get $109* of value…
The issues that I have with a deal like this are so abundant it would take me years of therapy to get them all off my chest – firstly they use crappy marketing tactics to trick you – I absolutely hate it when firms sell something with some marketing crap and then think it is ok to completely mislead providing there is an Asterisk in place to take you through 2-3 pages of technical terms and conditions that cover their ass in the event that you see through their schemes and call them out on it. Hey marketing people – stop making up this crap and covering it with an asterisk, we both know you are doing that to trick people, what sort of a business are you trying to build?
If you click through to ‘learn more’ about this shoddy deal you get two pages of crap to parse through:
What does that tell you? The math on the first order was wrong, for $41.95 you actually get just 2500 miles and 6 bottles of wine, a $109* value. You may still think that is OK, and more power to you. But you are still allowing someone else to dictate the value, in this example you are allowing this wine club to say “we will charge you $27.50 shipping” psst you have to look at shipping on a different tab… therefore if in month 1 you pay a penny they have just offered you $24,99 in ‘Value’. Feels great right?
That does still leave you $84.01 in ‘value’ which must be great right? Well could someone tell me the math on that, because I can’t see it broken down anywhere. Is it possible that they are shipping you bottles of undiluted cat piss that they opt to otherwise sell for say $24.99 each? Quite possible.
So that is my first problem – you are allowing a firm to set prices and then say how much you saved.
My second problem is month 2… in month 2 you get the 4,000 miles you thought you were going to get in month 1, plus a United club pass, which is a $50 value!!!
Really? When was the last time that you bought a United club day pass? When was the last day that you flew coach, didn’t have any free passes that come with the United Credit Cards every year and said to yourself, screw this I am going to pay $50 and drink a dozen Coor’s Lights and eat all the free pretzels I can get? If the answer was yesterday then sure, maybe this is $50 value for you, if not then let’s say it is worth a bit under $18 that someone would buy it from you for on Ebay after fees.
So what does Month 2 really cost?
- 6 wines ranging from $12-$15 per, lets say $81
- Shipping we decided was $27.50
- $108.50 plus Tax in your state?
It’s an exceptional opportunity to try little-known wines which rarely appear on the shelves of local stores. Plus, you’ll earn valuable miles with every shipment.
Meaning – the wines are sold primarily through these wine clubs, where they artificially fix high prices to create a sense of value when they are discounted.
I’m sure that some people will still say that this is value, and in truth it would be reasonable business practice for the wine club to send out slight loss leaders in their first shipment or two in order to convince you to stick around, but the reality of this is that these companies are selling on crap wine that they markup, and they have roped in The Points Fairy to make you think that you are getting a bargain, when really you are an equation of P/L and you aren’t on the winning side. Sure, people will say ‘I love wine, this is great for me’ well hello you people! I’d invite you to run the math on a bottle of wine with an average (constructed) price of $13.50 plus $4 in shipping, you are paying $17.50 per bottle from the second month, for wine I would argue is valued at a lot less than that.
You simply must understand the intrinsic value
There is such a rush to grab what the Points Fairy has touched with her magic wand that people seem to forget basic intrinsic value. People fueled with the righteous passion that only a bottle of two buck chuck that cost $17.50 and earned them 100 United miles could fathom are chasing after the ‘next big thing’ with reckless abandon.
Another one to raise its head this week is US Airways miles at a Casino in PA, this has people excited! Because they are all ready to have a punt and can earn these valuable miles while they are at it. I can see why it would be so exciting to the points crowd, since they have never before been able to earn points and free flights before, well unless you consider before Vegas was built in 1931 that is… as my readers will know, I have been receiving comped trips to Vegas, and Atlantic City for years, and even get cruises for ‘free’ from these guys, nothing new there! If you want to understand the economics behind the casino comps check out my post that breaks down my Coin in and Theoretical Loss required to earn a free cruise, Another Free Cruise, and what it really costs
I saw much atwitter on the blogosphere as folk wrote of this great new way to earn US Airways miles, well actually if anyone read the terms they would realize that this casino in Valley Forge isn’t actually allowing people to earn miles, it is allowing them to earn their silly Valley Forge points via Coin In on slots, and when they earn enough Coin In they win an entry into a drawing to win Miles. In other words, you have a chance to lose twice, once via playing the slots, and again once you lost all your money on the slots when you don’t win the US miles later in the drawing. That pesky points fairy has tricked you again!
If you are going through life believing in The Points Fairy, rather than believing that the points you earn with such partner offers are a carefully constructed deal designed to entice you into buying things at a price marked up above the cost of buying the miles, then I feel the need to tell you that the Points Fairy you believe in sold out long ago, and doesn’t create magical opportunities for you at every turn, please don’t fall under her spells…. opportunities do exist, but don’t lose sight of the bottom line.
I bought those wines when it was Alaska Airlines, and it was 5,000 miles AND all at once. No free pass, however. And, I have to tell you. That $50 +/- you pay for the wine? That’s more than it’s worth. NONE of them is worth even $10 a bottle, much less $15. Think TJ’s Three Buck Chuck, and you have it.
When I called to cancel, I got the inevitable “Can you tell us why?” I answered truthfully–because your initial price is all that the wine is really worth, and I’m not willing to pay $15 a bottle for $6 wine.
Shocked the girl, but she did ask, right?
This post struck a chord with me. I guess what bugs me is not so much the airlines and banks pitching a bad deal, but that these “deals” get passed on by the mainstream bloggers as if they are a bargain. There is no filter, it seems, that says: “This is such a bad deal that it is not worth writing about.” When the bloggers become the mouthpiece for the banks, they lose their creditability. When they lose their creditability, they are of no value to the banks, who have multi-million dollar advertising budgets to push their products.
Indeed. One way to approach this issue is to point the finger at these types of blogs, or another is just to keep reminding people of caveat emptor and how it is their own responsibility to understand the value of the deal.
Hopefully a bit of both will help keep people on track.
Hilarious!
Very nicely crafted post. I’ve considered this line of thinking, but your post really resonated with me.
It’s one thing to earn 1.2 million miles for about $3K ( http://en.wikipedia.org/wiki/David_Phillips_(entrepreneur) ); quite another to do so on overpriced “cat piss.” Still…cat piss might be attractive if bought through the rewards mall @ 10X points. Too bad it can’t be resold on Amazon.
Glad you liked it Tim. And for what it’s worth you can earn that many miles for a net positive if you do it right 🙂