Sharing or Selling Airline Miles Can be Risky, Pricey

By Cathleen

Dear Cashing In,

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I've got a ton of frequent flier miles from my Delta American Express card, and I'd like to either give some of the miles as a gift -- like to have my sister fly to see me -- or even just to sell them to raise a little cash. I've never done either before, though, and I was wondering if there was anything that I should watch out for when I do either of these. Sincerely 

-Too many miles

Dear Too Many Miles,

The short answer is that it's risky to sell miles, and it may cost you to share them.

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Many sites offer to buy miles or trade them for merchandise, but you risk having your SkyMiles account closed if you do. As a member of Delta's SkyMiles program, you're subject to the program's terms and conditions. The ones for buying and gifting miles state the following: "Delta is solely responsible for the redemption and fulfillment of miles. The sale, barter, gift or assignment of miles, mileage awards or other benefits, other than by Delta, is expressly prohibited.

Delta's "Transfer Miles" program has its own terms and conditions and No. 6 reads: "Any miles transferred through this agreement may not be conveyed to persons engaged in the sale, direct or indirect, of flight miles or arranging for the sale of such miles. Any improper usage of miles pursuant to this Agreement and the Transfer Miles Program, or any other misuse of miles, shall be grounds for immediate confiscation and forfeit of such miles and may be grounds for the forfeiture of all miles in the Member's account and the Member's ejection from the SkyMiles Program."

Most airlines make it easy to give miles away as long as they handle the transfer, and Delta is no exception. The simplest and cheapest way to use your miles to buy someone else's flight is to buy it yourself using your own award miles and put it in their name. If your sister already has a Delta SkyMiles account and you're just trying to help her make up the difference required to purchase a ticket, you can transfer miles from your account to hers.

You can share up to 30,000 miles at a time with family and friends by transferring them from your SkyMiles account to theirs. If you have your sister's SkyMiles account number, you can go onto Delta's website, fill out the transfer form, and the miles will be transferred within 24 hours.

But if you go that route, be sure to have your credit card ready. Why? Sharing miles will cost you more than just the miles themselves. Delta charges one cent per mile transferred, along with a $30 processing fee. For that fee, you can transfer anywhere from 1,000 to 30,000 miles per transaction, in 1,000-mile increments.

Here's what that means:

*Transferring 25,000 miles -- the lowest amount required to score a round-trip domestic economy fare -- will cost you $280 plus tax, nonrefundable (25,000 miles X 1 cent per mile + $30 transaction fee).

*Transferring 40,000 miles -- the amount needed for the next tier of domestic award seats -- will cost $460 plus tax. It costs a bit extra since you'd be going over the 30,000 mile transfer maximum and would thus have to move the miles in two separate transactions. (30,000 miles X 1 cent per mile + $30 transaction fee, and then the remaining 10,000 miles X 1 cent per mile + $30 transaction fee)

You can transfer up to 150,000 miles from your SkyMiles account per year.

Delta's miles transfer program is comparable in price to other airlines, but a little more flexible than some. If your miles were with American Airlines, for example, you would go through a similar process to transfer your miles, but you would only be able to give away a maximum of 15,000 miles in one transaction and 60,000 miles total in a year. That means twice the transaction fees for that 25,000-mile transfer.

American charges $50 for transfers of 1,000 to 5,000 miles, $100 for 6,000 to 10,000 miles, and $150 for 11,000 to 15,000 miles, not including taxes and a $30 transaction fee. So here's what that would mean:

*Giving your sister 25,000 miles on American Airlines would cost you $310 plus tax. ($150 plus a $30 transaction fee to transfer the first 15,000 miles + $100 and a $30 transaction fee to transfer the remaining 10,000 miles)

*Transferring 40,000 miles would cost $490 plus tax. ($150 plus a $30 transaction fee to transfer the first 15,000 miles + $150 plus a $30 transaction fee to transfer the next 15,000 miles + $100 and a $30 transaction fee to transfer the remaining 10,000 miles)

Remember that there is no guarantee that award seats will be available for a particular flight, or they may not be available at the tier your transferred miles have purchased. If you have the miles to spare, it probably makes more sense to purchase the ticket yourself using your own miles. The more you transfer, the pricier it gets.

The bottom line is that the most economical way of using frequent flier miles is to spend them yourself. Airlines charge a premium for transferring and strongly discourage profiting off awards you can't use. They would much prefer you spend those miles in a way that profits the airline or -- better yet -- never use them at all.

What do you think?

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