MIAMI (CBSMiami) — Do you have thousands of frequent flyer miles or credit card points you’re wondering what to do with? Some people are now selling their miles and points, and it’s making them hundreds to thousands of dollars. But before you cash-in, you need to know about the risks.
Carlyn racked up thousands of airline miles with no immediate plans to redeem them. Enticed by online ads from mileage brokerage companies, she sold more than 57,000 miles for $460.
“I didn’t see a value in holding onto them, hoping that I would find a flight I could use,” she said.
Though Carlyn made a nice profit, experts say each time you sell your airline miles or points, you’re taking a gamble.
“Lately it’s become very popular and it’s becoming a big business but there are a lot of risks involved,” said Brian Kelly, found of thepointsguy.com.
If you check the fine print of many reward programs, selling miles or points is not allowed. And if you’re caught, you could lose all your miles or points, have your account canceled and be banned from the program.
“You’re not going to end up in a jail cell but the airlines are pretty clear and they play hard ball with people who sell their miles and points,” Kelly said.
Also, it’s a new trend – which means there are still a lot of risks involved.
“If you sell your miles to a company, they take them all and then don’t pay you, you can’t really go to the airline and say, ‘Hey I sold my miles and this guy didn’t follow through on his payment,’” Kelly said.
When people sell miles or points, brokers redeem them for an airline ticket they sell to someone else.
And while in some cases it’s permitted to transfer points or miles to family or friends, experts warn the industry is watching for transfers and tickets that seem unlikely.
“Airlines definitely do not want the client to sell their miles to a company like ours,” said Eli Hoffman with FlipMyMiles.com.
FlipMyMiles.com, one of many mileage brokerage companies operating online, acknowledges the risk but says over the past several years it’s sold more than three billion miles and points.
“Even if something did arise, we still guarantee payment; you would keep the payment even if your account got shut down,” Hoffman said.
And while Flip My Miles says they guarantee payment, experts warn that there are some fly by night companies buying and selling miles and points.
“I made money selling miles that I’m no longer using and somebody else that needed a last-minute flight was able to save some money,” Carlyn said.
FlipMyMiles says the going rate for frequent flyer miles is about one cent per mile. So if you sold 100,000 miles, you’d make about $1,000. And, they say, selling points is more lucrative; they’re worth about 1.3 cents per point. So, cashing in 100,000 points could mean about $1,300.