How to Buy and Sell Airline Miles
Most airlines these days have frequent flyer programs where you can use your accumulated miles to redeem rewards, often in the form of flight tickets.
It's great when you earn enough miles to pay for free trips, but you don't necessarily have to wait for your miles to build up before you reap the fruits of your miles.
You can also buy, sell, and transfer frequent flyer miles to get a deal you want. (See also: Biggest Sign-Up Bonuses on Airline Credit Cards)
How to Buy Miles
You can purchase miles directly from an airline by visiting their rewards program page. (For American Airlines, it's AAdvantage; for Delta, it's Sky Miles; British Airways has the Executive Club, and so on.) Simply hit the "Buy Miles" link, and they'll walk you through the process.
The cost of miles varies from airline to airline. For example, Delta's miles cost 3.5 cents per mile, while American Airlines sell theirs for 2.5 to 2.75 cents per mile. Generally, buying miles only makes sense when you're just shy of a goal and you buy only enough miles to reach it. You don't want the value of your purchased miles to exceed the value of the ticket.
Another way to buy miles is through coupon broker sites. Now, buying and selling through a broker violates the policy of most airlines, but it's not illegal (except in the state of Utah). However, if you're caught, the airline may confiscate your ticket, cancel your reservation, and wipe out the accumulated miles in your (and the seller's) frequent flyer account.
If you're willing to take the risk, start by visiting the website of a coupon broker. The broker acts as the middleman between you and the seller. The broker will ask for your contact information, your preferred travel dates, service class (such as business or first), airline, and the price you're willing to pay per mile. Once the broker matches you with a seller, and all parties agree to the terms, the broker will ask you for your rewards account number. When the broker receives your payment, the seller will transfer the miles to your frequent flyer account.
If all goes well, any purchase (or sale) through a coupon broker should look like a simple transfer from the airline's point of view.
There are also other ways to get additional miles. Many credit cards reward cardholders with frequent flyer miles for buying everyday things. And some credit cards like the Starwood Preferred Guest by American Express will give you extra points when you spend on specific categories like travel and dining. (See also: Wise Bread Credit Card Guide)
How to Sell Miles
It's great when you can get a free trip out of your miles…but what do you do when you don't want your reward? Even if you don't want your points, someone else might.
Airlines don't like it when their customers sell miles, so if you want to convert your miles to cash, we're back in violates-policy-but-not-illegal-except-in-Utah territory.
If you want to sell your miles through a coupon broker, you first need to provide your contact information. The broker will also ask for the number of miles you want to sell (most require a minimum amount), the name of the airline, the expiration dates, and your asking price per mile. When they find a buyer, you'll transfer your miles to the buyer's account. You receive payment when the transaction is complete.
You can cut out the middleman by selling directly to your friends or family. It works just like a transfer, except that you'll receive money, gifts, or free labor for the miles. This method may not flag the airline's attention, but there are other risks involved — especially if the buyer can't find seats for the trip they want. (See also: How to Score a Frequent Flyer Rewards Flight)
How to Transfer Miles
Airlines allow you to give your miles to family, friends, and even charities, provided that the recipient also has an account with the airline. Simply click on the "Transfer Miles" link on the airline's rewards program page and enter your account information, the recipient's information, and the number of miles you want to transfer.
Even though you're freely sharing miles that you have already earned, don't assume that sharing the miles is free. As with buying miles, airlines charge a processing fee for transfers.
Other Ways to Use Your Miles
In order to compete with other reward programs, airlines have had to make their frequent flyer miles more flexible. Nowadays, if you don't want to use your miles on a plane ticket, you can apply them to another part of your trip. Airlines will allow you to redeem rewards for hotel accommodations, rental cars, vacation packages, Broadway show tickets, gift cards, and more. (See also: How to Save on Travel Accommodations)
To redeem these other rewards, you may need to go through Points.com. This website allows you to manage and exchange your reward points between their partnered programs. Their partners include several large airlines, such as Delta, JetBlue, Korean Air, and American Airlines. They're also partnered with Best Buy, Hilton, CVS, Wells Fargo, Swag Bucks, and other retailers. While the site is free to join, transaction or processing fees still apply and will vary. Some airlines may also restrict how you can use the miles in their program.
The exchange rate on Points.com may also be an issue. You won't find a 1:1 exchange here; a good chunk (if not most) of the value of your miles will be lost, guaranteed. Then again, sitting on miles that you won't ever use doesn't help much, either. It can be worth your while to make an exchange if there's a reward that you want and can use.
Final Tips on Buying and Selling Airline Miles
- No matter what you do, there will be a processing fee. The fee varies from airline to airline and depends on the type of transaction (buy or transfer), as well as the number of miles involved. Remember to factor in the processing fee (and taxes) when you calculate the costs.
- Most airlines set caps on the number of miles you can buy, receive, and transfer per year, per account. Check the terms and conditions of your rewards program to make sure you don't exceed the limit.
- As with most electronic transactions, there's a delay before you see the purchase or transfer (or sale-transfer) reflected in your account. It can take 1-3 days to process a transaction, so plan any last-minute trips accordingly.
- Most transactions involving frequent flyer miles are non-refundable.