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United wants to trade you airline miles for your gift cards

February 17, 2012|By Hugo Martin
(Associated Press )

If you got a stack of gift cards for the holidays, United Airlines now has a deal to turn those cards into miles.

Frequent-flier members with United, which will soon merge with Continental Airlines, can exchange gift cards from 60 major retailers for frequent-flier miles in United’s MileagePlus program.

The program is unusual because most airline mileage programs convert accumulated frequent-flier miles into credit toward hotel room stays, car rentals or meals.

The new United program flips that concept around. But it makes sense because a recent survey said that 80% of consumers planned to give out gift cards during the recent holiday season.

To exchange gift cards for miles, members of the MileagePlus program must log into their account, select the retailer that issued for the gift card and plug in the card information. The cards from such retailers as Home Depot, Starbucks and Kmart must have a minimum of $25. The airline then deposits the frequent-flier miles into the member’s account.

But the program is not getting soaring reviews from consumer experts.

For example, United says the exchange rate for the money on the gift cards depends on “market pricing” that can change over time. Consumers can back out of the deal if they don’t like the rate offered by the program.

“So, you don’t know what the exchange rate is until you go through the whole process,” said Tim Winship, publisher of frequentflier.com, a website that offers tips and updates on frequent flier programs.

A reader of his website was offered an exchange rate of 3.75 cents per mile for a Home Depot gift card, Winship said, but the market rate for frequent flier miles is closer to 1.2 cents per mile.

“Based on the pricing I’ve seen so far, I don’t think you are going to get a very good value from it,” he said.

Andrea Woroch, consumer expert at Kinoli Inc., a Colorado-based Internet marketing company, said consumers might get a better exchange by simply selling their unused gift cards to friends and then use the cash to buy airline miles.

United spokesman Charlie Hobart declined to discuss the program’s exchange rate, but he defended the offer. He said it gives airline passengers a way to get value out of unwanted gift cards.
“We think it offers members a convenient way to earn those miles,” Hobart said.

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