Can Frequent Flyer Miles Become a Real Currency?

Thanks to Bob Meyer of Barter News for some important news on “bartering” airline miles. There is a new Global Points Exchange where you can “Trade the miles and points you have, for the miles and points you want.”

The catch, at least for the moment, is that (1) only a handful of airlines are participating (however, American Airlines is one of them), and (2) the airlines are imposing large cash fees on trades. (See the excellent article on this development at Smarter Travel.)

Airline miles could become a true alternative currency if the airlines would make it easy and cost-free to transfer miles/points from one account to another. – t.h.g.

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4 responses to “Can Frequent Flyer Miles Become a Real Currency?

  1. Hopefully Points.com get more airlines, GPX is a handy service if you require a few top up points. I recomend them to my readers

  2. Similar to GPX and the airlines, trade exchanges are “imposing heavy fees” on holders of their currency. If one has an ABC Trade Dollar and wants to exchange it for an XYZ Trade Dollar he will be charged a transaction fee of 10%; however, the fee is levied in U.S. Dollars. Additional fees include the cost of joining & maintaining membership in 2 trade exchanges. Unlike the trade exchanges, the airlines don’t charge a membership fee or maintenance fees to the best of my knowledge.

    The true cost to a trade member to exchange one trade dollar for another trade dollar exceeds 10% because the market value of a trade dollar is closer to USD 0.50 than USD 1.00.

    If the value of an American Exchange Network Trade Dollar were USD 0.50 than the true cost to exchange out of AEN would be 20%.

    This fact is one reason why the U.S. trade exchange industry has high member turnover and anemic growth.

    Its unfortunate that most trade exchange owners don’t understand the importance of liquidity.

  3. hi bob.. nice blog. But i dont really understand about flyer miles?BTW.. great job man…

  4. Tom, Hopefully, with your efforts along with others, we will see the growth of solid alternative currencies developing around the world. It would be welcomed and is certainly needed by many entities, i.e. consumers, small businesses, non-profits, etc. Let’s hope the airlne industry sees the light and change their present policies.

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