Chase Manipulating Award Transfer to prevent their easy use
I’m curious is there are any other others there who have run into Chase delaying the award travel points transfer for up to 7 days, effectively killing award reservations that only have a few-day grace period? Chase does cover themselves legally by saying that most travel point transfers happen instantly, but may take up to 7 days. I am currently stuck in the 7 days case (for the first time ever) with no explanation of why, and am about to lose an excellent reservation with KLM (who has a 3 day grace period) with no explanation from Chase as to why the delay. I am wondering if Chase is doing this strategically to force me to use points using Chase Travel (which would cost me almost five times the number of points as my direct KLM reservation (now about to be canceled), and here we’re talking about points worth over $10,000… I’m not paranoid, but I can believe some automated system selectively delaying point transfers when they see an opportunity to force customers to their own travel service even if grossly unfair to the customer. This believe was reinforced when talking to a supposedly more senior escalation representative who actually suggested I use Chase Travel due to the delay (the fact that I don’t have nearly enough points to do that notwithstanding). If there are others out there with similar experiences, I’d like to hear from you. If this really is Chase manipulating the system to benefit their own travel service, this could result in a class action suit, which I am willing to entertain starting to investigate if there is evidence that this is what is happening. Randy Frank
Well, that sounds frustrating. I’m sorry for your loss.
As humans, we are drawn to the idea that the universe revolves around me, and this is particularly acute with U.S. as corporate marketing tends to really hone in on this to drive sales. So it’s understandable.. to have this line of thinking.
Doing a benefits analysis can help dispell this misconception.
Let’s say that there’s a $10,000 flight, selling for 100k airline miles. And you can transfer from Chase, and 100k Chase points is worth $1,000.
When you book this flight with 100k points, someone is not making the $9,000 potential revenue that could have been made if sold with cash. So your theory is that Chase missed out on $9,000 profit and that’s why they are manipulating transfers.
Chase actually doesn’t make a $9,000 profit. That’s the airline. When you use 1M points to book a $10,000 flight through Chase Travel, Chase pays the airline $10,000 and probably gets some % commission from the airline. Let’s say, just to make up some numbers, that they get 5%, so $500. (To simplify calculations, let’s ignore the CSP/CSR 25%/50% bonus)
On the other hand, if you transfer 100k points to the airline, Chase gets the $1,000 (100k points) at some pre-agreed upon rate (probably something lower like $500) from the airline. Chase doesn’t know whether your intention with those 100k points is to book a crappy $600 flight or to book a $10,000 fllight. In fact, of those few customer who transfer points, most pople transfer to United and book a crappy $600 domestic flight with those points.
Now let’s compare where does Chase make more money.
It’s $500 for Travel Portal vs $500 points transfer, so it’s the same profit, right?
No. Chase made $500 profit when you spent 1 million points at Chase Travel.
On the other hand, you spend 100k points and Chase still made a $500 profit. If you transferred 1 million points, Chase would have made a $5,000 profit.
In other words, Chase makes 10x more profit when you transfer points to the airlines. Maybe my % assumption is wrong – maybe Chase gets only $200, not $500, for every 100k you transfer. That’s still twice of the profit they would make through the Travel Portal.
Chase doesn’t have a profit motive to make the transfer difficult.
The airline, on the other hand, is in a different position. The airline would prefer you to book with cash, not points. So maybe they are manipulating the system and they give under-the-table payments to Chase for their reps to play dumb with you and delay it until the award ticket is gone… right?
No. There’s two fallacies with this logic.
First, the award ticket is not “gone”. Someone else booked it with points. So from the airline’s perspective, they still took the L, just not with you – someone else.
Second, the airline already has mechanisms in place to ensure customers don’t get too much out of transferring points or just points in general. They restrict seats.
It’s a big airplane. It has 50 business class seats and 300 economy seats.
But in each airplane, you can only book 2 business seats at saver rate and maybe 10 economy seats at saver rate. For KLM & AF, it’s worse, there’s only 1-2 flights in a month where they make thse 2 seats available. They don’t even release it every other day.
So the real cabal in the game is how stingy airlines are with business saver availability. They are making sure that for all the other 48 business seats, they are raking in the $10,000 profit.
In fact, they have algorithms in place to try to predict which flights will have spare, empty seats. And usually it’s THOSE seats that they make available at business saver rates.
So basically, we are going to the bakery to get free giveaways. The bakery knows that they cooked 50 baguettes, but they will only sell 45-48 baguettes today given past sales trends. So they give you two baguettes for free (not really free but you get the idea).
So we are begging for leftover crumbs at the bakery, and there are bumps and glitches in the process, and coming up with conspiracy theories on why they are not giving me the crumbs.
There is no conspiracy needed. It’s just crumbs, sometimes we can’t get them. And bakery owner doesn’t really care that much either way.
But, maybe you should do you and file a class action lawsuit and see where it goes. Hopefully we’ll get more crumbs. Can we get 4 baguettes each day? That would be great.
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