Points plan peeves Calgary consumer
Published Tuesday, December 4, 2012 4:46PM MST
Last Updated Tuesday, December 4, 2012 6:52PM MST
More than four million Canadians belong to Aeroplan and make purchasing decisions based on the ability to earn free travel but sometimes those miles expire before consumers can use them.
Cris Nannarone had 42,000 miles in his Aeroplan account and was saving them to go to Italy.
When he tried to book he was told all 42,000 miles had expired since he hadn't earned or redeemed any miles for over 12 months.
"What? I didn't buy milk! How do they expire, explain that to me. They said they expired, it's your fault. It’s up to you to keep track of your account,” said Nannarone.
Aeroplan told him he could buy the miles back for around $500.
“And that's when I lost it, I said, you guys are double ending. I’ve already paid for these, I’ve earned these through your program,” said Nannarone.
Aeroplan's expiration policies are not new. The company announced its 12 month inactivity expiration policy as well as its "any mile not used seven years from the date it is earned expires" policy in 2006.
Aeroplan started as Air Canada's frequent flyer program but now it's a for profit company owned by International Loyalty Program Operator Aimia.
Here's how it works:
- Aeroplan sells miles to its business partners, like Air Canada, CIBC and ESSO to offer customers as an incentive. When customers redeem their miles, Aeroplan uses the money from air mile sales to buy preferentially priced Air Canada seats.
Our consumer specialist Lea Williams-Doherty says that Aeroplan makes money on the spread between what it sells miles to its business partners for and what it costs Aeroplan to buy the seats for you. That means any miles earned but not redeemed, because the miles have expired for example, are pure profit for Aeroplan.
Lea asked Aeroplan why it instituted the expiration polices in the first place and was told that "Expiry policies are very common in the loyalty and frequent flyer industries, they...remind members to stay active. Engaged members are what brings value to a program."
When she asked what percent of Aeroplan miles are earned, but never redeemed, she was told,"we don't report this number".
In 2009 Merchant Law Group filed a class action lawsuit alleging Aeroplan's mileage expiration policies are unfair.
Aeroplan told Lea it has strong arguments against the class action and will vigorously defend against it.
Those who have lost miles to Aeroplan's expiration policies can join the class action through Merchant Law's website.