Southwest Restricting Point Redemption- Others to Follow?

I have 3 million miles on American and just the other day was wondering about their current and future value. My husband has a bit over a million on American as well. We’ve also got over a million Chase points that we transfer to other travel partners but who knows how long that’ll last?

We earned most of them from many decades of actual travel. We only use them for flights but if we’re not traveling again for a little while, maybe I’ll start shopping for Christmas presents with miles. I haven’t seen any restrictions yet from American about doing that so I should probably start.

A good place for these discussions is flyertalk.com. There is usually up to date information about proposed changes to airline schedules, use of and possible changes to FF miles, etc.

Let's briefly understand how airline reward points/miles programs work:

1- Airlines sell miles/rewards for credit cards/banks, stores, other non-airline programs that allow transfers of points to airline frequent flier accounts etc. (and, incidentally, they also give miles/points for people who fly with them on paid tickets).

2- Airlines sell tickets for points/miles, trying really hard to optimize overall yield (thus the usual caveats on using points to issue 'free' tickets).

3- Airlines, in turn, buy alternative rewards with third-party providers (such as hotels, car rentals etc) for heavily discounted prices, and, in practice re-sell them to their frequent flyer members in exchange of points.

In the near future, airlines will not lack spare seats. But they are tight on cash right now and will be for a while. Overall flight demand might tank for a while, and they do not want to be spending lots and lots of their scarce cash in order to buy more and more alternative rewards (since people are not flying right now and might fly less in the next months).

Thus, you will be able to 'spend down' points/miles on future flights, something that is good for them (creates more certainty about operations and burns down the overall outsdanding mile/point balance they are liable to offer redemption). They don't want you to require their own cash expenses to provide you non-flier rewards.

The 'burnd down the mile/point balance' process is even accelerated because there won't be many people accruing new points/miles while the collapse in air traffic lasts.

Hi Mark. I'm confused by your statement "Went to the Southwest web site today to cash in some points. I do this every so often to keep my account active (which I found using points is not enough anymore)".

My understanding is that Southwest, Delta, and United have all announced that their points never expire. American is now the only one of the big four where activity is needed to keep points from expiring. So for Delta, United, and Southwest, there is no need to do anything to 'keep your account active'. Somebody please correct me if I am wrong.

Ufkak, I flew a lot last year, and when I say a lot I mean a lot. Multiple flights to Europe for work, some as often as two round trips a month, and no recreational spending of any accumulated miles. So yeah, I have 1 million miles in my United account to use. That along with the credits for the flights I had booked and cancelled means I will not have to spend another dollar with United for the foreseeable future for all my travel needs. I just hope they stay around long enough for me to be able to use all the miles without them cancelling the program or doing major changes (which they have every right to do).

Oh, and I went through all of my other frequent flyer accounts and donated the miles to charities, where allowed. I hope the charities I chose actually get some value from them.

Bob, It is true the points don't expire anymore. Apologies for stating otherwise. For a while you had to use the points or they would expire after 18 months of no activity in your account. Then they changed that to you had to EARN points within 24 months or you lost the ones you already had. That change proved very unpopular, and was not very well publicized, which caused a lot of annoyance among the customers. Then there was the wave of airlines removing expiration of points/miles and Southwest jumped on that.

But old habits are hard to break sometimes. And so I would get a Starbucks gift card every so often with my accumulated Southwest points to keep the account in an active state since I never seemed to have enough in my account for the flights I wanted to take with them. At least it was some real value.

There’s no need to hoard points anymore. The days when the points can be saved up to be used for some fancy vacation are long gone. The airlines keep moving the target.

But yes a lot of airline are not really letting you use them as much on merchandise. Because they have to pay for the merchandise and right now they don’t have any cash coming in. And if you’re waiting for an announcement from the airline to tell you this, there won’t be one. You need to go check your airline and decide what you want to do.