Near Disaster: Chase Ultimate Rewards And Flying Blue

I needed to take a last-minute business trip to Kiev. Cash fares were hovering over $900 one way for one-stop itineraries, so I started looking for opportunities to use points. When I book my own award travel, I optimize for the most efficient use of points and the stand-out value was 25,000 Ultimate Rewards points for an Air France flight. There was a long layover in Paris, but I really like Paris so the 9 hour layover was fine. It’s enough time to visit the Louvre and enjoy a coffee in a sidewalk cafe.

air france economy class seat

Unlike most airlines, Air France touts their economy class cabin. We’ll see if it lives up to the hype!

Unfortunately, the Flying Blue program is an absolute disaster right now. Air France/KLM just switched the chart from a fixed value redemption chart to variable redemptions (which, based on my analysis, is one of the biggest airline devaluations in history–most awards are up a minimum 30% and some are up 500%). It was a total fluke that the flight I wanted still cost 25,000 points, yielding 3.2 cents per point in value all-in (net of taxes/fees I had to pay out of pocket). This is very good redemption value on a ticket for which I would have paid real money. However, the devaluation comes on top of another negative change, removing the award calendar, which has driven call center volumes through the roof (because the only way to search for availability over a range of dates is to call now). Because of this, it can now take 2 hours to get through to an Air France representative.

Of course, my worst nightmare happened. Rather than posting immediately, after I transferred my Chase points, the points didn’t show up. I called Chase, who said that they transferred the points and it was Flying Blue’s fault. I called Flying Blue, and they said they hadn’t received the points so it was Chase’s fault. Both suggested I just wait. So I waited, and waited, and waited. I called to put the seats on hold so they wouldn’t disappear while I was waiting. Eventually I gave up and went to bed.

The following morning, the points still weren’t there. 4 hours before the flight, they still weren’t, so I called Flying Blue again. Fortunately, the friendly representative in the Mexico-based call center had a solution: “We are aware of this issue so we will advance you the points and your account will have a negative balance. When the points post from Chase, your balance will go back to zero.” She put me on hold, then came back a few minutes later to collect my credit card number. And just like that, I had a ticket to Kiev! I didn’t really believe that I did until I went to check in, and the computer spat out boarding passes.

So, certainly a stressful beginning to a trip, but a happy ending. I have no status with Flying Blue. I have never booked a ticket in their program. They don’t know I write this blog. They just thought on their feet and solved the problem by taking a risk (I could have been lying about transferring the points). And so instead of stranding me, which is totally what I expected, I’m now on the way to Kiev.

Summary

Chase is now reading a new telephone script when you call: “It can take from 1-7 days for your points to post after they are transferred.” After slowing down transfers to Korean Air and now Flying Blue, it appears Chase is trying to make Ultimate Rewards less valuable by making it impossible to redeem them for last-minute flights. This doesn’t appear to be a technical glitch; based on the policy change being communicated by their telephone agents, it seems to be deliberate. Also, there is nothing in writing on Chase’s Web sites to communicate the change, so people are going into this process with no idea that points transfers are no longer instantaneous.

Generally speaking, I like the Chase Ultimate Rewards program better than American Express Membership Rewards. However, the ability to have immediate use of transferred points is key. Award travel inventory is dynamic (a seat that is available now likely won’t be in a couple of days, particularly to a popular destination) and most of the value in keeping your points with a bank program instead of an airline program comes from the immediate ability to transfer and redeem points. There are fewer reasons to collect bank points instead of airline points if you aren’t able to easily redeem them for awards.

Airline points programs are rapidly losing credibility so it would be bad for consumers if banks to go the same direction and make points harder to redeem.

Xiamen Air Transit Hotel Disaster!

Xiamen Air offers some really cheap flights from Seattle to destinations in China and throughout Asia. The catch? You end up stuck overnight in Shenzhen, Xiamen or Fuzhou, China.

Not to worry, though, right? Xiamen Air provides a transit hotel. The details on their Web page are as follows:

Xiamen Airlines offers passengers transit accommodation services free of charge, when the tickets satisfying the following conditions apply:

1. All flights are carried by Xiamen Airlines. (code-sharing, chartered flights are not applicable);

2. Connection time of transit passengers is within 6 to 24 hours in Xiamen (G Class and Z Class are not applicable);

3. Must contain at least one international(regional) flight in the ticket;

4. The service contains only free hotel, passengers have to pay for meals and the other transportation fee.

The position of transfer counter:

Domestic Departure Hall on 2nd Floor, B11 counter or other check-in counter(no priority check-in counter)

Service consultation phone number: (0086-592)5739500 or (0086-592)95557

My tickets qualified. I called the US toll-free number to confirm, so it seemed like I was golden. And I have to admit, the room that was promised sure looked nice:

hotel room promised photo

Wow, what a nice hotel room. Would have been great to stay in it!

Now, if you have experience in mainland China, and with mainland Chinese airlines, you probably know where I’m headed with this. In China, this sort of thing is rarely easy to arrange in practice and also rarely works as advertised. While other airlines in other parts of the world might be expected to whisk you from your flight to a hotel room with a seamless transfer, Xiamen Air makes you figure out how to ask for the benefit when you arrive, and then they hit you with a couple of serious “gotchas.”

Gotcha #1: It’s Hard To Claim Your Room

When I arrived in Xiamen, and again in Shenzhen, I had to hunt around for the desk that could issue the voucher. In Xiamen, it’s a desk labeled “transfer services.” In Shenzhen, you have to go upstairs one floor from the baggage claim and find the ticket counter (where they sell tickets). This agent can take care of the hotel voucher. I’m not sure where to look in Fuzhou, but the guy who was sitting next to me on the flight to Shenzhen, and who continued onward to Fuzhou, emailed me and told me he couldn’t figure out how to get the room (or whether it was even possible) so he ended up sleeping in the airport overnight.

Gotcha #2: You Share A Room With A Random Stranger (Or Pay Extra)

When I arrived at the transfer counter for my room, some forlorn-looking guy was standing there waiting. “I guess we’re roommates,” he said. Um, maybe not. I insisted on escalating as far as possible, speaking to a supervisor, and showed screen shots from the Web page. It was no matter. The supervisor had heard it all before. She pointed to a laminated form and said “you must choose, either share a room (!) or pay 135 yuan (about $21) extra.”

How Xiamen Air tricks you

Oh, you thought you’d get your own room? What a strange Western idea.

This was discussed and explained in Xiamen but it was never discussed in Shenzhen (leading me to believe a different set of circumstances applied there). In Shenzhen, I arrived at the hotel, got my room, took a shower and was fast asleep when some random guy started trying to get into my room! Apparently the front desk had given him a key based on this crazy airline policy. The guy then tried to argue with me (in barely understandable English) that he was going to be my roommate etc. but I was having none of it. I shut the door, sent him back to the front desk and unplugged the phone. The hotel staff didn’t speak any English so I figured that would settle the matter (it did). It’s a good thing I’d locked the door with the chain from the inside! Otherwise, who knows what random stranger might have been trying to climb into bed with me.

Gotcha #3: Transportation Isn’t Always Included

In Shenzhen, the airport hotel has a shuttle that comes and picks you up at the airport, takes you to the hotel, and then returns you to the airport the following morning. You know, like you’d expect an airport hotel to do. In Xiamen, however, you have to take a local taxi to and from the hotel. However, this requires local currency, and the ATMs are all upstairs, and the airport closes down early, so you don’t have an easy way to get local currency for the taxi. Also, returning the next day, it’s hard to get a taxi on the street because the taxis have moved to using dispatch apps. This means you’ll need data service that works in China and an app called DiDi on your phone in order to get a taxi.

The Hotels

Both hotels were very local and Chinese. In Xiamen, it was the HMYL Hotel. It’s a basic Chinese business hotel on a leafy tree-lined street in central Xiamen. The room was typically Chinese with a hard twin bed, and was poorly soundproofed. Hotel staff was friendly but spoke no English.

In Shenzhen, the hotel was called the James Joyce Coffetel. I don’t know exactly what a coffetel is (coffin hotel? I wasn’t dead. Coffee hotel? No coffee in the room), but it had a room, and it was fine apart from being at the end of the airport runway (planes made the windows rattle starting around 6 in the morning) and being across the street from a giant noisy construction site. And, of course, apart from giving some random stranger a key to my room at 2am. They had a shuttle to and from the airport at least.

xiamen transit hotel

Tiny business hotel room with two beds in Xiamen. Should have been free, cost about $30 all-in.

shower picture

Large walk-in shower. This was nearly as big as the rest of the room.

trees in Xiamen picture

The Xiamen Air transit hotel is in a pleasant neighborhood with tree-lined streets.

 

I should probably point out that I lived in mainland China for 3 years and speak basic Chinese, but without that, I would probably have never ended up at either hotel.

James Joyce Coffeetel bed

The bed at the Shenzhen James Joyce Coffetel was more neatly made than this when I arrived, I put it back together for the picture

Extra bed picture

Second bed in a side bedroom. I didn’t sleep in this one. And the random guy who tried to come in at 2am didn’t either.

Shenzhen James Joyce Coffeetel view

Sweeping expansive view of … giant dusty construction site

Xiamen Air Staff Are Great, Despite It All

I have nothing bad to say about any of the employees I interacted with at Xiamen Air. Each and every one of them was kind, polite, and professional, and many went above and beyond for me (in Xiamen, a wonderful kind airline employee escorted me upstairs to the closed part of the airport so I could use the ATM, and then helped me get a taxi to the hotel without being ripped off). I think the airline puts them in a difficult situation of over-promising and under-delivering, and they’re all just making the best of it.

Wrap-Up

The Xiamen Air ground experience seems almost deliberately designed to strand Western travelers unfamiliar with navigating China and without a command of the Chinese language at the airport. Even with extensive China experience and the ability to speak basic Chinese (as long as I’m not trying to do it out of context or over the phone), I was thrown for a loop by the unadvertised shared room policy. It is understandable to do this when two people are traveling together on the same ticket, but hooking you up with a random stranger is absolutely insane. Unexpectedly giving someone a key to your room with no advance warning is even worse. And requiring foreigners to navigate the process of catching a taxi in Xiamen to and from the hotel (in Chinese) is an awful lot to ask.

If you’re prepared to pay extra and negotiate for your own room, and if you can speak Chinese and are familiar with how things operate in mainland China, you’ll probably manage (like I did) to muddle through. However, if you can’t speak Chinese, and you don’t have experience thinking on your feet in mainland China, you might find yourself sleeping in the airport instead.

Shenzhen Bao’an International Airport Priority Pass Lounge Review

The Shenzhen airport was opened in 2013, and is much more comfortable than most airports in China. The Beijing and Shanghai airports don’t have a lot of amenities, but Shenzhen has the majority of the stuff you’d expect an airport to have, along with far more luxury shopping than you’d need any airport to have (seriously, who buys luxury stuff in an airport?). I figured I’d try my luck with finding a Priority Pass lounge. The airport is really huge and the Priority Pass app wasn’t at all clear as to where the lounge was. Since the directions and signage weren’t good, I just went to the biggest, fanciest lounge I could see. It looked really nice and very fancy and I totally didn’t get in. However, someone from that lounge (Shenzhen Airlines) was kind enough to walk me up to the Priority Pass lounge.

I’ll give away the plot: this lounge was below average, even for a typical Chinese airport lounge.

airport snacks, shenzhen

The selection was as unattractive as the presentation

shenzhen airport priority pass lounge

Lounge chairs jammed tight in a corralled-off part of the airport

Probably the most interesting thing in the Priority Pass lounge was the massage chairs. Unlike the general passenger area of the Seoul airport, these chairs in the Shenzhen Priority Pass lounge weren’t free, but you could pay for them with WeChat:

pay for massage chair sign

USB-equipped massage chairs at your service… for a fee

pay for lounge chair with wechat

Want a massage after your long flight? It’ll cost you, and you’ll need a Chinese bank account

Is this a nicer place than the rest of the airport to wait for your next flight? Well, it depends. Do you enjoy crowds? Would you like to overhear loud phone conversations in multiple dialects of Chinese? And how about a warm beer and some Chinese packaged snacks to go with the experience? Well, this Priority Pass lounge may be for you.

Otherwise, give it a pass. Starbucks is nicer, and if you paid a $550 annual fee for access to this lounge, you could have instead bought the entire flight that brought me to it and a coffee and still come out ahead.

Understanding Loyalty Fraud In 2018

Loyalty fraud is a massive problem in the airline industry. It is estimated to cause billions of dollars in losses annually. Most of these losses used to only be “on paper” representing lost revenue; since airlines give away the seats they don’t think they’ll sell, a fraudulent redemption really only cost them a few dollars in overhead and catering. So, in the event that someone’s account was compromised and the points used, the airline would just restore the points and change the password (and optionally try to go after the fraudulent passenger, although this was usually more trouble than it was worth).

I’m sure this guy’s ID was legit. (Photo credit 419eater.com)

These days, it’s a much bigger deal when your miles and points get stolen because they can be redeemed for things other than airline tickets–items such as gift cards and online shopping purchases that cost the airlines real money. Naturally, given the increased risk exposure most airlines have implemented loyalty fraud programs. These look for unusual patterns in accounts and flag suspicious activity. Unfortunately, a lot of legitimate activity can look fraudulent, particularly when the algorithms aren’t updated along with changes in the way that people earn and redeem points.

I have helped people in a number of instances lately in which a frequent flier member’s account was flagged for fraud. Fortunately no tickets were outright cancelled but additional verification and security procedures had to be followed, up to even going to the airport on the day of travel with the credit card used to pay the taxes on an award ticket. However, this is happening less frequently lately and there are some identifiable patterns I will share to help you avoid being caught up by a fraud algorithm.

Now, if you’re here because you got involved with mileage brokers in the buying and selling of points and you just got caught, none of this will help you. That’s something you actually did, and if the airline is talking to you at all, you can assume they have you dead to rights. This post will only help you avoid being flagged if you’re actually innocent.

Fewer False Alarms

One thing that used to be incredibly suspicious in award programs was suddenly earning a large number of points, and then using them immediately for an expensive award redemption. And at one point, this made sense. Back when people earned most of their miles from flying, there was an upper limit to how much flying a person could reasonably do.

These days, this is a completely normal pattern. Many people have started earning points in transferable programs such as those operated by American Express, Chase, and Citi. So, they’ll earn the number of miles needed for a ticket, check for award availability across a number of different airline programs, and then transfer the miles to the program for redemption. And on the part of consumers, this is perfectly rational; airlines have devalued their own loyalty programs so much and so often that it’s better for most people to keep their options open.

The good news is that the horror stories of previous years, in which tickets were cancelled without notice or people were forced to drive to the airport to get award tickets issued, appear to have gone by the wayside in most of the programs that work with bank loyalty programs–provided that your redemption meets the new definition of “normal.” The biggest offender was Flying Blue but this wasn’t the only program that created difficulties.

Understanding Fraud Algorithms

If you book a normal award redemption these days, it’s unlikely to cause you any issues regardless of the loyalty program you’re using (with the possible exception of programs that are new to working with bank loyalty programs; these include Turkish Miles and Smiles and Avianca LifeMiles).

What’s a normal award redemption? It’s one that doesn’t trip the algorithm. To understand this, you just need to think like a computer. Algorithms like these are designed to either add or subtract points on a transaction depending on criteria that raise suspicion. So, for example, suppose that you start with 100 points, and the threshold is 50 points or below. An algorithm might work like this:

Subtract points (less suspicious):

  • You earned the points through flying or partners, or you transferred them in from your own credit card.
  • You are traveling on the itinerary (you won’t get flagged because you bought a ticket for your significant other, as long as you’re both traveling together).
  • The person traveling is someone for whom you have previously purchased a revenue ticket.
  • The person traveling is an immediate relative.
  • The person traveling has an established frequent flier account with the airline and a significant points balance.
  • You’re paying for the taxes with your own personal credit card.
  • You are traveling 3 or more days in the future.
  • The person traveling is going to a low fraud risk destination (such as Canada).


Add points (more suspicious):

  • The points you are redeeming were recently purchased with a credit card.
  • You aren’t traveling on the itinerary.
  • The person traveling is someone with whom you have no obvious relationship.
  • You’re paying for the taxes with someone else’s credit card. Bonus points if it’s a foreign credit card and you have never used one of those before, and even more bonus points if it isn’t a card associated with the person traveling.
  • The ticket is for an immediate departure. Right now, today.
  • The passenger is traveling to a high fraud risk destination (such as Nigeria).

 

How many points are assigned for what specific criteria? And are these the only criteria used? Well, that’s proprietary, and (for very good reasons) loyalty programs aren’t going to tell you. Some programs are more relaxed and others (such as Flying Blue) are less so. Nevertheless, when you look at the criteria that adds points, it’s pretty obvious why it is there.

detectiveManual Review

Keep in mind that one or two things that add points probably won’t trip you up as long as there are enough things that subtract points. After all, this stuff can totally reflect normal life. Your best friend just rage quit her job and you’re buying her a ticket to Costa Rica right now. With the points you coincidentally bought yesterday because there was an incredible mileage sale. You’ll join her this weekend but plan to fly another airline. And you’re using up the crappy gift card you got this Christmas to pay the taxes before the thing starts charging you fees. I mean, nothing about that scenario is suspicious once someone has a conversation with you, but it totally looks suspicious otherwise.

Loyalty programs that over-rely on dumb algorithms will just automatically cancel a ticket, or it won’t go through in the first place. That’s why many loyalty programs implement manual review for suspicious transactions. Most commonly, a transaction that is too suspicious can’t be completed online and the member will be instructed to call the loyalty program. At this point, extensive validation is done when the ticket is being purchased.

There can also be a “soft review.” When this happens, the loyalty program will call the member at the telephone number on file to inquire about the transaction. Of course, if the member doesn’t recognize the transaction, they’ll immediately unwind it. And sometimes, additional validation is required. Most commonly, the airline will require that the credit card used to pay the taxes be presented at the airport (this is becoming a requirement even for transactions that aren’t suspicious, and some programs go even farther by requiring that the loyalty program member’s credit card always be used). The airline may also interview the traveler to determine the legitimacy of their relationship to the loyalty program member.

Wrap-Up

Every verification that I have needed to do in order to satisfy a loyalty fraud investigation was necessary because the activity objectively looked shady: 

  • An intra-Africa flight from Nigeria booked on short notice using an organization’s credit card, using the loyalty account of a member who had never been to Africa (this pattern matches either fraud or a church mission–it was the latter).
  • A last-minute one-way ticket to Nicaragua for a foreign national who wasn’t related, taxes paid with cash equivalent (his new girlfriend had to attend a funeral, and the taxes were paid with a gift card).
  • A business class trip to Asia for an apparently unrelated person on a top-tier carrier leaving the following day with points that were just purchased (his cousin’s employer reimbursed the economy class fare, and the member purchased miles to buy her a business class flight for the same amount of money).

 

In every case, the passenger was able to travel. It did take a little bit of extra work to explain to the airline what was going on, and in the case of the ticket from Nigeria, the airline wanted to see the physical credit card (emailing in a photo of both sides was fine). However, in every case the airline was satisfied with the explanation. No loyalty accounts were frozen, and no tickets were cancelled. The system worked.

Don’t avoid loyalty programs because of potential security problems. If you’re doing something that looks suspicious to, say, Flying Blue, it’s virtually guaranteed to also look suspicious to Mileage Plus. Airlines may react differently and have different tolerance thresholds for suspicious activity, but they’re getting a lot better at this stuff and false alarms are a lot less common these days.

Don’t Be Frustrated By Baggage Friction

Until recently, the majority of airlines had baggage transfer agreements (with the notable exception of Southwest). What did this mean? Provided you weren’t flying Southwest (who did not and does not have agreements with any other airline), you could check in with the first airline in your itinerary and ask them to check your luggage all the way through to the final destination. This was even the case with airlines that weren’t partners (such as United and Delta) and on itineraries involving more than one ticket.

I’m not sure how the airline economics work, but apparently there is some cost involved when bags are transferred between airlines. Over the years, airlines have locked down baggage agreements to the point where the majority of the airline industry looks a lot more like Southwest than previously. The upshot? If your itinerary isn’t all on one ticket, you’re probably going to have to claim your bag and re-check it.

picture of bag with tag

I had to re-check my bag in Phoenix to Seattle

I was just (unexpectedly) bitten by this problem by American Airlines. I’m flying American to Phoenix, and Alaska onward (on a separate ticket) to Seattle. Although American and Alaska are partners, American won’t always check a bag all the way through if you have more than one ticket on the itinerary. Sometimes they will, but it’s inconsistent. In fact, American won’t even necessarily check bags through all the way on their own airline anymore!

How can you be bitten by this problem? It can happen when you buy tickets through sites like Kayak, Momondo or Skiplagged. Many of these sites piece together an itinerary by booking a journey as separate tickets. After all, this can be significantly less expensive. My itinerary is a bit unusual, in that I’m combining an award ticket from Mazatlan to Phoenix with a paid flight from Phoenix to Seattle. However, the award ticket would have been expensive if I’d paid cash (it’s an international flight from Mexico during the shoulder season of a holiday period) and the paid flight was really cheap. It’s the same principle with paid tickets. A ticket from Seattle to Detroit via Chicago might be really expensive if you bought a through itinerary with American, but could be much less expensive if purchased as a Seattle-Chicago and Chicago-Detroit itinerary.

To punish you for saving money (there is really no other explanation I can see when only one airline is involved – if the intent is to charge you two bag fees, they could just collect them up front), American won’t check your bag all the way through. Instead, they’ll force you to claim your bag in Chicago and re-check it. This will require you to clear security again as well. There’s no good reason for this; it just introduces friction that doesn’t need to be there. What’s also odd is that this policy is inconsistent. American will allow you to combine a paid flight with an award flight booked with AAdvantage miles. However, they won’t allow you to combine a paid partner flight with an award flight, and they won’t allow you to combine a paid flight with an award booked on American through a partner (such as British Airways). And this is what just tripped me up. I assumed that the policy of combining a paid flight with an award flight would cover me, but it didn’t because the paid flight I’m taking is on Alaska Airlines (a partner flight) and the award flight I’m taking (on American) was booked with British Airways Avios.

Also bear in mind that I’m relatively expert at this stuff. Even I get tripped up sometimes. The average person, who doesn’t spend roughly 20 hours a week keeping on top of airline policies like I do, doesn’t have a chance.

What can you do? The only way to be (probably) sure that you’ll be able to check a bag all the way through to your destination is to book directly on an airline’s Web site and to book a ticket directly from your origin to your destination (without manual connections). Otherwise, build time into your schedule to claim and re-check your bags and re-clear security in connecting cities. It’s annoying, but not surprising. Full service airlines have been removing almost every last vestige of differentiation between themselves and low cost carriers. It’d be interesting to see low cost carriers go the other direction; when major airlines are creating so much friction that doesn’t need to be there, it stands to reason that they might see an opportunity for differentiation.

And of course, the other option? Travel light. None of this applies if you only have a carry-on bag!

$99 Beijing Flights – With A Dangerous Catch

A startup called Airmule has recently made a big splash by offering $99 flights to Beijing. Obviously there’s a catch. The catch in this case is that you have to give up one of your checked bags (they appear to book you on carriers that allow two checked bags), and your other checked bag is a courier shipment. So, sharing economy, right? Seems like a perfect opportunity for a startup to move fast and break things. Most people don’t check two bags anyway so why not leverage this opportunity to make shipments of up to 50 pounds at low cost, with the fastest delivery possible?

Plus, you really have to love the founders of this company. I mean, as a startup founder myself, I’m rooting for them. One is a hardcore gamer, the other is a former backup dancer for Gucci Mane, and the third loves beer more than you do. I’m not making this up–this is what they say about themselves on their Web page:

Airmule cofounder photos

These guys totally have you covered.

So, despite the obviously strong qualifications in air cargo handling and logistics possessed by the founding team, the reason why I’d personally pass on this is that there’s a really big catch–one so serious it could potentially make you the star of an episode of “Locked Up Abroad.”

When you pass through Customs–particularly Customs in Beijing–you are personally responsible for everything that you bring into the country with very few exceptions. One of those exceptions is to be the authorized representative of a “common carrier.” These are companies like FedEx, UPS, or DHL, or the airlines themselves. Common carriers are considered by governments to be transportation carriers only. They aren’t held responsible for the contents of the shipments they carry; full responsibility lies with the people sending and receiving the shipment.

If you’re acting as an air courier, you may not have any of those protections. You could be fully liable for what you carry through Customs. So, that suitcase of apparel you’re supposedly carrying for a fashion show? If it’s loaded with heroin, that’s on you, and the penalty for that in China is death (no ifs, ands or buts). The suitcase full of baby formula? If you didn’t know that it’s illegal to bring it into China, it doesn’t matter: the massive fine is all yours if you get caught.

Airmule takes a bunch of reassuring-sounding security measures. For example, they participate in a TSA inspection program which verifies that shipments are safe for air transportation. You do too–by letting the TSA inspect your bag when you check it in (although in all fairness, there are some additional security measures cargo companies comply with, and Airmule says they do this). Airmule claims that they inspect shipments as well, and I think they probably do. However, while this provides reasonable assurance that whatever you’re carrying won’t cause the plane to crash, it doesn’t provide as strong an assurance that what you’re carrying is actually legal to carry into the country where you’re carrying it.

I reached out to Airmule to ask them to clarify who is liable for shipments. Just like the Airmule FAQ, I got an answer that sounded reassuring while skirting the question:

Evasive asnwer from Rory

This answer wasn’t reassuring.

So, I pressed for a clearer answer, and got one that is, to me, as clear as mud. I’ll leave it to you to draw your own conclusions:

Rory Is Evasive

I think this is a roundabout way of saying “No”

I lived in Beijing for 3 years, so know that there’s a legitimate demand for this sort of thing. There are a lot of goods that are imported into China through Customs gray areas: they can’t be imported commercially, but they can be imported in personal quantities. One example is certain food items. You’re allowed to hand carry quantities of foodstuffs that are in line with personal consumption or gift-giving, even if importers aren’t allowed to bring in these goods. Similarly, you can bring in bottles of alcoholic beverages that aren’t available in China using your personal Customs allowance. And baby formula is another popular item. You can bring in a limited quantity (the regulation is fuzzy and seems to currently be “as many cans as you can convince Customs is yours”) of foreign-made baby formula for personal use. Every time I left the country, I’d be deluged with orders from new mothers in my office–this is a very popular item given ongoing scandals about tainted milk powder sold in China.

Other stuff is less gray area and more considered to be smuggling. For example, Apple products cost about 40% more in mainland China than they do abroad, so they’re popular items to smuggle in luggage. Even something as innocuous as books could be a really major problem in China. Books and literature are closely controlled in mainland China. That suitcase full of Chinese-language books you’re carrying might actually be hardcore prohibited political speech that could get you in a huge amount of trouble. How good is your Chinese?

And then, there’s the issue of drugs. All you need to do is watch “Border Security” to see all of the inventive ways that drugs can be concealed. If the courier company you’re working with doesn’t figure out that the shipment you’re carrying is actually drugs, but border guards do, your cheap vacation could turn into the last flight of your life. China doesn’t mess around–drugs equal the death penalty and given their history of the Opium War, being a foreigner will get you zero slack. In fact, you’ll get less than a Chinese person would.

Being able to fly for steep discounts as an air courier isn’t a new thing. This is something that has been around for decades. It just hasn’t gotten very popular, because usually you’re going to places where express courier services aren’t able to operate easily (such as Burkina Faso). And there are all kinds of shipments, to all kinds of locations, where hand carrying an item makes the most sense–whether it’s transplant organs, life-saving medicines that require refrigeration, aircraft parts, or other critical shipments that just need to be delivered by the fastest route possible.

I really don’t want to come off as sounding unsupportive of startups, or of this team. I really love innovations that will help people travel and see the world for less. I am the founder of a dating startup myself (one where we’ve had to make some really tough decisions about the trade-offs between usability and security for our users–we have gotten it right so far, but I know it’s only a matter of time before we have a bad day). That being said, there is a massive amount of risk that 20 year old backpackers may be accepting in order to score a cheap holiday, and they probably don’t know that they’re undertaking this risk. As an air courier, you are–in a literal sense–putting your life in the hands of a courier company, and trusting your life and freedom with the integrity of whatever you are carrying for them. Take this seriously, check out the shipment yourself, ask lots of questions, watch a ton of episodes of “Border Security” to find out how inventive smugglers can be, and if you aren’t 100% sure…

…just walk away. A cheap ticket isn’t worth it.

UPDATE

One of the co-founders of Airmule isn’t happy with this article and disputes the facts as I described them. Since the facts about his service came from his own tweets and email I’m not sure where the dispute is, exactly, but I’m happy to correct the record if anything I have written is factually incorrect.

Rory Felton email

Here’s the email I got from Airmule answering my questions

Rory had the following to say on Twitter:

Notwithstanding the tone of the response–which is arguably justified if the facts are wrong–I have offered Rory and Airmule (and will offer the entire air courier industry) an opportunity to respond to any facts that I got wrong. Thus far, this hasn’t happened. Since calling me “unprofessional” and “lame” doesn’t really help to correct the record should any facts be in dispute, I do hope we can have a facts based conversation going forward.

EPILOGUE

Airmule ultimately didn’t dispute any of the facts in this blog post. In fact, their Terms of Service explicitly places full Customs liability with the person carrying the suitcase (many thanks to the helpful reader who pointed this out). NOTE: Airmule has stealth-edited their Terms of Service, the original is here.

Rory also claimed that the Terms of Service was out of date. I’ll leave this to the interpretation of the reader:

another lie

I’m not sure how to read this, but….

Would I personally do this? Not on my life! The risk is definitely not worth it.

Don’t Over-Optimize Yourself Out Of An Award

I book a lot of award travel – not just for myself, but for a lot of other people. It’s at least 10 tickets per month, and usually more than that, so I have gotten a pretty good sense for what is a good award and what isn’t. I have also gotten a good sense for when people get themselves into trouble. One of the biggest problems I see is that people try to over-optimize their award booking to the point of losing the opportunity to fly with points altogether. If you see a good deal, you need to book it right away. Just get the ticket and figure out the details later. This applies to all airline tickets, not just award tickets. Book first and ask questions later.

don't over optimize jpg

Sometimes I just want to…

What is over-optimizing? It’s going into an award booking knowing the fundamental bargain (or having been advised of it): airlines give away the seats they don’t think they’ll sell. Those seats aren’t the good seats on nonstop flights with perfect schedules. Instead, you’re flying cross country on a regional jet connecting to another regional jet in Columbus, or traveling on Ethiopian from Los Angeles to Dublin. In Seat 31B, and you’re lucky if it is anything other than that. And yet, even though you know this, and I briefed you, and you agreed to it, you just dither and dally and tweak and fiddle and try to get a perfect itinerary in Cathay Pacific first class instead of a perfectly good (and entirely reasonable) itinerary in Air China business class. When I say “If you want to go, you really need to book this right now before it’s gone,” you say “I need to ask my wife” and disappear for a day or three while you try to search for something better on your own.

Even though you hired me to help you. Trust me, although I’m not much of an expert at anything, I’m genuinely an expert at this.

Here’s how it ends, all too often. All of the available options evaporate in front of your very eyes because–against my advice (which you have actually paid for)–you don’t immediately book the one highly reasonable option that is available for your travel dates when it becomes available and when I urge you to book it. Traveling around Christmas and New Year? That’s why there was only one option and that is why that option wasn’t a nonstop (which you can almost never get anyway). It was a good option. An option you totally blew. And that is also why there isn’t likely to be another one. At all.

I think this is because people read too many blog articles and develop unrealistic expectations. You’ll never hear hype from me on Seat 31B, unless it’s about an unusually good economy class seat. However, other travel blogs so over-hype certain airlines and their business and first class products that literally everyone tries to book them and it means award availability is very limited. Here’s some tough love: You’re not likely to secure those “aspirational” awards at all, and you’re especially not likely to secure them over holidays, and extra especially when you show up 6 months after the booking calendar opened. Full-time bloggers have schedule flexibility where they can literally book and fly the same day, giving them access to last-minute inventory you can’t reasonably use. They all have relationships with the airlines and often fly on complimentary “industry” tickets. You don’t have any of that. Instead, you signed up for a few Chase cards and got a few hundred thousand points just like everyone else did this year, and they’re all chasing the exact same seats on the exact same dates.

What’s the reality? If you’re flying in a long-haul business class, it’s far nicer than economy class on pretty much every airline in the world. The baseline is so much of a step up from economy class that the differences between airlines are only incremental. For example, the difference between Air China and Cathay Pacific is pretty marginal. Slightly different catering, better English skill level with a Hong Kong vs. mainland Chinese crew, a different selection of alcoholic beverages and teas, and better lounges in Hong Kong vs. Beijing. That’s it. They will both get you to your destination safely in a modern lie flat seat, giving you a comfortable ride and a nice meal.

There are marked differences in economy class. You feel these much more. Premium economy is a major step up from regular economy class. And since there is more economy class award inventory, it is well worth favoring one airline over another (all else being equal). This is particularly true when you’re looking at 9-across vs 10-across economy class seating on a 777. This just isn’t the case with business class. If you’re getting a lie flat seat, worrying about one airline versus another is mostly worrying about which wine is catered. Does it really matter so much that you’d risk losing an opportunity to fly in business class for free?

Apparently, it was. You decided to push your luck. Not content with finding an itinerary that met all of your requirements and was really very good, you held out for something better. Except it wasn’t actually there, because airlines barely give away any seats during Christmas and New Year at all, and especially not premium airlines on premium nonstop routes. Instead, someone else snapped up the award you didn’t book. They were happy to have what you were trying to over-optimize. Your opportunity disappeared right in front of your nose. And I know exactly what’s going to happen next.

You’re going to be upset with me.

 

Tax Day: Should You Pay Your Taxes With A Credit Card?

A reader contacted me and asked a question that a lot of folks are asking on tax day: “Should I pay my taxes with a credit card?” The answer is a strong “it depends” and you need to be careful. Beware of bloggers bearing affiliate links and pushing you to do this.

First of all, any way that you do this, you’ll be paying a fee. That’s real cash that you’re shelling out in return for points. In nearly all cases, if you’re just doing this for the points, you’ll be paying more than they’re worth. Typically, tax services charge around 2% to pay your taxes with a credit card, which is the same thing as buying points for 2 cents each. You can often buy them directly from the airlines for less than this.

If you need to hit a minimum spend threshold, though, this could be an easy way to do it. But it could be an expensive waste too! If you pay the IRS directly (rather than through a tax service) it will almost always code as a CASH ADVANCE which charges interest, fees and doesn’t count toward minimum spend. You will need to pay through a tax service, which will send the money to the IRS on your behalf.

payday loan shop

Bank cash advance fees can cost more than a payday loan!

This could also be an efficient way to get enough points to reach an award threshold, especially if the points are more expensive than 2 cents each to buy. Just weigh the real money you’ll be spending in fees versus your ability to earn the points through regular spending (without fees).

If you pay through a tax service or through your tax software then sometimes–though not always–it codes as a purchase. But you need to be sure not only how the merchant bills you, but how your credit card interprets the charge. If they’re billing you in the “tax preparation service” or “software” categories, you’ll probably be fine. Citi, however, is particularly aggressive about coding things as cash advances that other merchants don’t, so be especially careful with them.

Just as with taxes themselves, how you pay your taxes can be complicated. It’s nice to sweeten the deal with a few extra points, but be careful so it doesn’t backfire!

How To Get Full Mileage Credit On Cheap Tickets

Over the past year, across the board, airline mileage programs have gotten a lot less generous. And this makes a lot of sense–there were just too many people gaming the system and the programs were no longer good at doing what the airlines actually want them to do, which is attracting and retaining high-value flyers. These are typically “road warrior” business travelers who spend tens of thousands of dollars per year on airfares.

High value flyers don’t buy the kinds of deep discount, bargain basement tickets that you and I buy (like the $59 fare I recently bought from Phoenix to Seattle on Southwest, which even included two free checked bags). Actually, airlines lose money on those. Airlines make their money on last-minute tickets to and from business destinations. Want to fly from Washington DC to Cincinnati tomorrow, returning Thursday? It’s only 388 miles, but it’ll cost you a cool $709 in coach.

Delta was the first US program to go revenue-based, and the other two “Big Three” airlines United and American have more or less copied their program so I’ll use it as an example. Before the program went revenue-based, you’d earn credit based on a combination of your elite status and the number of miles flown. If you were an elite member of the SkyMiles program, you’d also earn a bonus. And for any flight, there was a 500 mile minimum. So here’s what your earnings would look like:

  • 1000 miles roundtrip (500 miles each way)
  • Mileage bonus (100% for Gold Medallion)
  • Total: 2000 miles

 

A frequent business traveler (to get Gold Medallion status, you must fly 50,000 miles with Delta and you need to spend a minimum of $5,000) would get 2,000 miles of mileage credit. Someone like me (without elite status) would get 1,000 miles.

These days, with the big 3 major carriers, I’ll net just 5 miles for every dollar I spend. Gold Medallion members get 8 miles for every dollar they spend. So, for our frequent business traveler, here’s what the mileage earning looks like on the above flight:

  • $709 x 8 equals…
  • 5,672 miles

 

Our hypothetical business traveler is pretty happy. She’s getting almost 3 times the number of miles that she would have earned before. It almost makes visiting Cincinnati tolerable.

businesswoman photo

The trip may not be fun, but at least she earned a lot of miles!

However, you and I aren’t buying a $709 last minute walk-up fare. We’re probably flying farther away than Cincinnati. And we don’t have Gold Medallion status. So we get only 5 miles for every dollar that we spend, and we’re buying cheap fares. Here’s what our earnings would look like for the same itinerary on a discount fare:

  • $138 x 5 equals…
  • 690 miles

 

See what happened? The number of miles people earn without frequent flyer status, and who didn’t buy an expensive fare, just got cut back. This may not seem so bad, but it gets a lot worse for longer flights.

For a $59 fare from Seattle to Los Angeles, where I previously earned 954 miles, I now walk away with only 295 miles! Bargain hunters get hit really hard on long international routes. Here’s an example. There was a $457 roundtrip flight yesterday on United from Seattle to Brussels. Routing via Newark, the mileage is 12,154 miles roundtrip. This is nearly enough miles for a free one-way ticket within North America. However, you’d now get just 1,750 miles instead of the full mileage credit. It’s a truly massive hit, so if you’re buying cheap fares, you need to look beyond the Big 3 frequent flier programs.

If you don’t have status and you buy cheap fares, you’re generally much better off with mileage earning programs versus revenue earning programs. Fortunately, there are still a few of these, and there are loopholes where you can still earn full mileage credit.

alaska_airlines_2016_logo

 

 

Alaska Airlines Mileage Plan is still mileage earning rather than revenue based, and Alaska has a very large number of partners. You can also transfer Starwood Preferred Guest points to Alaska. That’s the good news. The bad news is that if you’re flying on cheap fares, you usually won’t earn 100% mileage credit unless you’re flying Alaska. In fact, you can end up with as little as 25% mileage credit.

Still, it’s not necessarily optimal to earn 100% mileage credit if your miles get stranded in a program you seldom use and will have trouble earning enough miles in to redeem a free ticket before they expire. This is particularly true with international partners like Hainan, Emirates and Icelandair. Alaska should be viewed as a program that covers a very large number of partner airlines with middle-of-the-road value.

Let’s go back to our Washington to Cincinnati flight on Delta, and see how it looks if you’re using Alaska Airlines Mileage Plan. Because the program is mileage based, the amount of money spent on the flight doesn’t strictly matter–however, it does matter in practice, because earning is based on fare class. Airlines sort fares into buckets and the cheaper buckets are sold as a different “class” than more expensive ones. You can view Delta’s fare classes in this chart.

fare bucket image

It’s hard to know or control which fare you are buying. Only the first class fare (P) gives 100% mileage credit.

If you sort the chart by “pecking order,” you’ll see that the fare classes more or less exactly follow the mileage earning chart that Alaska Airlines publishes for Delta flights. Note that most of the time, people shopping for flights just choose the lowest fare and it can be hard to know exactly what fare class you’ve booked into until after you have purchased a ticket . It doesn’t actually matter for this short flight, though. Alaska has a 500 mile minimum per flight! So, you’ll get 1000 points for the roundtrip no matter what fare you book. If you have Alaska Airlines MVP Gold status, you’ll get a 100% bonus for a total of 2,000 points. Obviously, frequent business travelers traveling on high fares won’t be better off doing this, but leisure travelers flying on low fares come out ahead.

The upside is that Alaska generally has competitive fares and serves a surprisingly large number of destinations from the West Coast. They are also in the process of merging with Virgin America (the deal is expected to close by the end of 2016), and the number of destinations will only grow.

This program is an absolute no-brainer for crediting Emirates, Icelandair and Hainan flights, because these airlines have very limited partnerships. If you’re flying American or Delta, also consider crediting your flights to Alaska Airlines Mileage Plan. You won’t get 100% credit on most fares, but it may be worth giving up to pool your credit in one program.

singapore_airlines_logo-svg

 

 

 

If you’re flying United, you have very limited options with StarAlliance airlines to accrue 100% mileage credit on discount fares. However, Singapore Airlines Krisflyer has a very competitive award chart and 100% accrual on United. The accrual rates on other StarAlliance programs are competitive with other programs as well.

There are some big sweet spots in the program:

  • You can transfer points to Krisflyer from all of the major bank programs, including American Express, Chase and Citibank. This helps to top up your balance when you want to redeem an award.
  • You can also transfer points to Krisflyer from the Starwood Preferred Guest hotel program (although, generally speaking, Alaska Airlines Mileage Plan is a more valuable transfer partner).
  • The Krisflyer program doesn’t have a surcharge for last-minute award bookings, unlike United who charges $75.

 

Generally speaking, you should be careful when you accrue miles to a foreign frequent flier program; these typically charge fuel surcharges while most US-based programs don’t. Krisflyer is no exception. However, if you redeem your Singapore Airlines miles for flights on United Airlines, you won’t pay fuel surcharges within North America. Also, be sure to use your miles. They expire after 36 months!

Using Krisflyer miles is a little more complicated than using United miles because you have to book most awards over the phone. However, it’s a small inconvenience in exchange for the incredible value that Krisflyer offers.

czech_airlines_logo-svg

 

 

Czech Airlines OK Plus is the only program that offers 100% mileage credit for the majority of Delta fares. The program also has some interesting rules, such as placing Iceland and North America in the same zone. And you get 2,000 bonus points after crediting your first flight to the OK Plus program. You can redeem OK Plus points on any SkyTeam flight, and the award chart is here.

The upsides:

  • When you fly Delta, you get a minimum of 100% mileage credit on most fares. Some fares even give 200% mileage credit. This is more than you’ll get with other SkyTeam programs.
  • You can travel all the way to Iceland roundtrip for just 35,000 miles! You can also travel to Central America or the Caribbean for the same price.
  • If the Air France “island hopper” to from Miami to Cayenne is on your bucket list, this is an available option and is only 30,000 miles roundtrip.
  • There are other “sweet spots” with the program, particularly when flying with Chinese airlines that are relatively stingy in other programs, and when redeeming award tickets from cities in central America.
  • You’re allowed both a stopover and an open jaw. What’s more, you’re allowed to connect up to 8 times on an itinerary and connections can be up to 23 hours each. This is virtually unheard of in airline mileage programs.

 

There are some key downsides to the OK Plus program:

  • You don’t get any miles at all on Delta “E” fares. These are encountered rarely, but should be credited to Alaska.
  • Miles expire after 36 months, versus no expiration with Delta SkyMiles.
  • All SkyTeam awards must be booked round trip. There are no one way awards.
  • There is a 36 euro booking fee, plus an additional 50 euro fee if you use a transatlantic Delta flight, plus all applicable fuel surcharges. Given that a Delta flight is the highest value award (Delta’s seasonal flight from JFK to Reykjavik), it stings a little.

 

Like Singapore Airlines, you have to book your flights over the phone. This is a minor inconvenience, but isn’t a showstopper for most people.

Wrapping Up

Look beyond the mileage programs of the airlines you are flying. If you’re comfortable using the mileage programs of foreign airlines (and calling overseas to book award flights), you can still earn full mileage credit when flying with Delta and United, even on cheap fares. And if you credit cheap American Airlines fares to Alaska, you’ll generally do better than you would using the American Aadvantage program.

Good luck, and see you in the sky!

FlightCar: Sharing Economy Gone Horribly Wrong

If you’re a frequent traveler, you have likely encountered the sharing economy. Uber doesn’t actually own any cars or employ the drivers, but they move roughly as many people around every day as airlines. Airbnb doesn’t actually own any rooms, but they rent more rooms than many hotel chains. I’m generally an early adopter of technology (as you might expect given that I’m a startup founder), so I was eager to try another innovation in the sharing economy: FlightCar. Unfortunately, this proved to be a very expensive mistake.

When you see this company, run the other direction!

When you see this name, run!

FlightCar’s pitch is simple: park your car with them. You won’t pay for parking, they’ll drop you off and pick you up at the airport, and your car will be clean, fueled and waiting when you return. The catch? They can rent out your car to their customers while your car is with them. If they do, you’ll be paid 10 cents per mile driven. Easy, right? This seemed like a no-brainer when I took a recent trip to The Philippines, and needed to leave my car parked at LAX for a month. Nothing could have prepared me for the nightmare that ensued.

Just one problem: this isn’t my car!

When I arrived back at LAX after a long international trip, I had only one thing on my mind: pick up my car so I could get to my friend’s house and go to sleep. My connecting flight had been delayed for 3 1/2 hours in Seoul, so it was late and I was tired. I called the toll-free number for FlightCar and they dispatched a driver.

Eventually, I got a call from a guy who showed up in a creaky old Lincoln Town Car. He drove me in silence to the FlightCar office. I felt a vague sense of impending doom. “Did you see the photos I sent?” was the first question from the representative. “No, what happened?” I replied. “Follow me,” said the representative, taking me out into the parking lot to a scratched and damaged Nissan Versa. “There was an accident,” he said. “Well, just one problem,” I said. “This isn’t my car.”

I looked around the parking lot. My car was nowhere to be seen. “This…isn’t your car?” the representative repeated, slowly. “Yes, my car is a hatchback, this is a sedan,” I replied. “It definitely isn’t my car.” This kicked off a 3 hour long circus, whereupon my car was located in the hands of a renter in West Hollywood. Apparently, since it was the only car on the lot, FlightCar rented it out even though I was returning. They figured they’d pick up the pieces later. I’m not sure how often this happens (the representative wouldn’t say) but I wasn’t having it. I needed my car to embark on a cross-country trip the next day. Eventually, we arrived at a solution where we’d take the damaged Versa to the renter in West Hollywood, swap it there, and I’d retrieve my car. It wasn’t clean, and wasn’t full of gas. I paid to top up the tank (although FlightCar claims they’ll reimburse me). I signed off to receive my measly $97 in compensation for my car being driven nearly 1000 miles by 4 different renters. And I also signed off on the damage report.

The damage on to the lower part of your bumper and plastic shielding beneath your car are considered “Wear and Tear”

While being rented out for nearly every day of the past month, some damage had occurred to my vehicle. When I checked in my vehicle with FlightCar, they assured me that I would be covered if there was any damage, touting their $1,000,000 insurance policy. This is the same insurance policy that is liberally touted on their Web page. Unfortunately, there is fine print, and I was burned by it: Hundreds of dollars in damages to my car are not covered by FlightCar or my own insurance.

That insurance policy? Not so much.

That insurance policy? Not so much.

Just look at the damage that was caused to my car:

IMG_20160316_095219 IMG_20160316_095250 IMG_20160316_095308In case you’re wondering which of these damages is covered by FlightCar’s $1,000,000 insurance policy–the windshield rock chip or the massive paint scrapes and underskirt damage – it’s the rock chip. My own auto insurance is of no help either. Because my car was not operated by me and was being commercially used by FlightCar, my own insurance won’t pay to repair the damage either. I am left holding the bag. Here is FlightCar’s response to me:

Per our “Owner’s Terms” the damage on to the lower part of your bumper and plastic shielding beneath your car are considered “Wear and Tear”. As long as the damage is purely cosmetic.
 
We can, however, cover your windshield. I would need a picture of the chip or crack in your windshield to compare it to the photos we have on file. As soon as you send me that photo I can help you move forward with your claim.
 
 
Thank you,
 
Sayeed Shah
Resolutions Manager

Warning: Not all sharing economy companies are alike and participating in the sharing economy can end up costing you money.

Some companies, like airbnb, have your back. If an airbnb member damages your home, airbnb will take care of you. FlightCar, unfortunately, is hiding behind several pages of dense legalese that apparently say the exact opposite of both their advertising and their representatives.

Update: More than 2 months after I posted this, FlightCar’s new head of customer service reached out to me. We came to an agreement: FlightCar would repair my car to the condition it was in when I dropped it off, and I would update this blog post to say so. They held up their end of the bargain, so I’m holding up mine.