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The Ethics of Miles & Points

Travelling the world on points can be a wonderfully fulfilling pursuit. But where do we draw the ethical lines among the many different ways out there to earn and redeem points, and how do we make sure we don’t cross them? 

Everyone has their own perspective on this question, so depending on who you ask, you might get a very wide range of answers. I think that’s what makes it an especially interesting topic to ponder, so allow me to channel the spirit of the “A+” I received in Philosophy 101 many years ago and share some of my loosely catalogued thoughts on the ethics of Miles & Points. 

The Different Ethical Standards

Before we launch into the discussion of whether specific actions are right or wrong, I think it’s important to mention that there are many different ethical standards out there, all using different sets of judgments to determine whether a certain behaviour is consistent with those standards (“acceptable” or “right”) or not (“not acceptable” or “wrong”). 

Let’s examine some ethical judgments that we often encounter in the people around us, and then we can use these to assess how some of the actions we take in the game of Miles & Points stack up. 

One very common ethical yardstick is the maxim of “do no harm”: you shouldn’t take actions that cause harm to others. Conversely, if an action does no harm to others, then it’s fine to do.

I think the “do no harm” principle is a reasonable standard that many of us can agree on, but an interesting offshoot is the question of whether big corporations, like the airlines and credit card companies, can even be harmed in the first place. 

Some might argue that a reduction in a company’s profits directly harms the lives of its customers, employees, and shareholders, so yes, “do no harm” must be extended to your dealings with big corporations as well. 

Others might approach this question based on a perceived sense of justice. These people would argue that unlike individuals, corporations are ethically neutral entities in the single-minded pursuit of profit (often to the detriment of individuals, like banks fleecing its financially vulnerable customers with high interest rates, or forcing their sales reps to engage in deceptive sales practices), and so we ought to deal with corporations in kind: by maximizing our own personal gain above all else. 

And following on from the “do no harm” principle, most people would agree that it’s acceptable, and even necessary, to maximize your self-interest as long as you aren’t harming others in doing so. Let’s take that as our starting point, then…

The Lighter Shades of Grey: Exploiting Loopholes

In my view, the more innocent things we do in Miles & Points would fall into the category of taking advantage of the various loopholes or flaws within the system.

A perfect example would be “churning” credit cards, or applying for the same card over and over again to get the bonus multiple times.

An action like this certainly isn’t within the spirit of the rules – after all, profit-seeking banks and credit card companies aren’t supposed to be charities handing out free trips to anyone who asks.

But what about the letter of the rules? Or in this case, the terms and conditions? This is a more interesting question, since many credit cards do have terms saying that you are only eligible for the welcome bonuses if it’s your first time holding the card, but in practice, people still end up receiving the bonuses on repeat applications anyway.

Is it at all unethical to repeatedly apply for these credit cards in the hopes of receiving the welcome bonus again? Many would say no – you’re simply asking politely for something and you happen to be receiving it, even though you technically aren’t supposed to.

Moreover, it isn’t considered bad behaviour to maximize your TFSA and RRSP contributions, nor is it wrong to avoid taxes (using legal means) and maximize your after-tax income. So why would it be wrong to do maximize your credit card points and frequent flyer miles (again, using legal means)?

Looking elsewhere in the landscape, there are many loyalty programs with features that seem ripe for exploitation. One example would be Marriott Bonvoy’s Points Advance policy, which allows you to make speculative bookings without even having the points in your account. 

This feature was probably intended to help people secure one or two bookings for their upcoming trips and not to book out the entire inventory at luxury hotels on different dates when the prices were about to increase – but lo and behold, that’s exactly what ended up happening!

Another classic example of exploiting a loophole would be manufactured spending (MS), which is simply a way of using various services and resources in unintended ways in order to generate huge volumes of points. Many would argue that that’s about as unethical as using a heavy book as a paperweight – after all, both are examples of using something for an unintended purpose to achieve a certain end.

Crazy routings on Alaska Airlines. RBC product switches. Subtle Aeroplan tricks. The list goes on and on. 

But the reality is that this this stuff, while not illegal, certainly feels unethical to some people. I mean, just look at the comments on this CBC article on MS – it’s not pretty! 

And I think that’s because all the examples we’ve described are exploitative by nature. You’re “getting something for nothing”, and imposing the costs of your extravagant trips around the world onto a third party, whether that’s a travel provider, a prepaid card company, or American Express’s marketing department. MS just happens to be by far the most blatant example of this exploitation.

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So is this type of behaviour ethically above-board or not?

It depends on who you ask, but I wouldn’t be surprised if many of us drew our ethical lines to allow for the exploitation of big companies, based on that sense of perceived justice I had mentioned.

“They don’t hesitate to fleece me of my money whenever they get a chance, so why shouldn’t I fleece them back if I can?!” 

Who are the parties being “harmed” in cycling through credit card bonuses, taking advantage of loyalty program sweet spots, and manufactured spending? It’s the big corporations behind many of these products, and that’s simply fine with many people. 

Of course, there are downstream impacts of such behaviour, like future travellers no longer getting to enjoy the same sweet spots, or people who genuinely want to manage their foreign currencies no longer finding as much value in the CIBC AC Conversion Card. 😉

But these impacts are easily rationalized away in the name of good old self-interest. If you feel that the epic trips you’re taking right now outweigh the inconveniences you’re imposing on future strangers whom you don’t know, then of course you’re going to earn the points and take those epic trips.

The Darker Shades of Grey: Misrepresentation

Here’s where a more interesting discussion takes place. Among the many ethically grey areas we tend to dabble in, I think the slightly darker shades would encompass the actions that aren’t outright fraudulent, but have an element of misrepresentation about them. 

Actions in this category might include misrepresenting your income on a credit card application, or using a special offer code (like the Amex Gold Rewards Card from Perkopolis) that you technically aren’t eligible for. 

The Visa Infinite and MasterCard World Elite products have relatively higher minimum income requirements, and while the issuers are well within their rights to verify your stated income, they mostly don’t bother.

Does this mean you should falsify or misrepresent your income? No. Do many people do so anyway? You bet.

It’s a similar case when it comes to taking advantage of offers that you’re not technically eligible for. While enforcement of the conditions may be loose, in the long run, this kind of misrepresentation dilutes the benefits for those who are eligible. 

To a lesser extent, I’d say that this category encompasses things like applying for small business cards as someone who doesn’t have a real business, or getting US credit cards as a Canadian as well.

In these cases, the “story” is easier to craft – income levels and Perkopolis membership are a pretty clear-cut matter, whereas someone can reasonably be a serial entrepreneur who operates many side businesses, or be in the process of starting to live, work, or do business in the US as a Canadian (and therefore needing to set up a US credit file). 

But unless these are genuinely the case for you, there still exists an element of misrepresentation in crafting these stories, which is being done purely in pursuit of the bigger credit card signup bonuses on business cards or US cards. 

Again, if we were to apply our ethical standards to these scenarios, we’d probably find that most of us view corporations as soulless entities that deserve as much humane treatment as they extend to us (read: none).

After all, misrepresenting your income, small business ownership, and/or US residency status serves to “hurt” no one else but the issuer’s bottom line. And while you could argue that taking advantage of off-limits offers does hurt the customers who are in fact eligible for them, self-interest would dictate that you’d favour your own short-term gain over the long-run effects of the benefits being diluted for the true clientele. 

Being Accountable for Our Actions

So let’s be very clear here. To some extent, anyone who “plays the game” of Miles & Points is operating in an ethically grey area, and there’s no point in denying that.

The same is true for myself – not only do I play the game, but I also actively encourage and champion others to do so as well. I’m definitely no saint.

Now, the purpose of this post isn’t to judge anyone; rather, it’s simply to lay things out as they are. Indeed, we live in a world where most people are comfortable with “ethically grey”, including yourself if you’re doing things like applying for business credit cards on the basis of your neighbourhood dog-walking startup. 

So in light of this, how do we hold ourselves accountable for our actions? If we’re indeed comfortable with the ethically grey, what steps can we take to distance ourselves from the darker end of the spectrum?

First off, I think it’s very important to ask yourself where you would personally draw the ethical lines that are never to be crossed. This is something that everyone will have to decide for themselves, but if something doesn’t “feel” right to you, it might not be something for you to pursue, even if others are doing it.

I know some people who are happy to ruthlessly exploit American Express for a new signup bonus once every three months, but who also think that MS is borderline illegal. So they pursue the former and avoid the latter. To each their own. Do what feels right to you. 

Secondly, it goes without saying that you need to be mindful of where the ethical lines morph into the legal lines. Never venture beyond the bounds of the law, however emboldened you may feel that you won’t be caught.

Lastly, as savvy travellers who use points to fund our adventures, I think it’s important to always maintain the right attitude on the trips that we have the privilege to go on.

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As I mentioned, we have a vast repertoire of tricks and strategies that are designed to shift the cost of our travels to third parties other than ourselves. The prices we pay out-of-pocket, therefore, do not fairly reflect the costs of maintaining the planes we fly or feeding the families of the hotel employees who clean up our luxury hotel rooms.

So I’d say, pay it forward. Use these opportunities to travel far and wide. Mingle with the locals, engage with their cultures, spend money at their businesses, and share their stories when you get back home. Carve out your own path through the world, and leave as much of it as possible better than you found it.

And most of all, don’t forget to spread the joys of travelling on points with as many people around you as you can (those who’d be ethically comfortable with it, of course!) 😉

Conclusion

If I wanted to, I could really go on for much longer about the ethics of Miles & Points, since it’s a topic that throws up many tough questions and that elicits so many opinions and viewpoints from different people. While some would contend that there are no ethical qualms about maximizing your gains from profit-seeking banks and credit card companies, there’s no doubt that certain elements of the game we play carry a trace of misrepresentation, which is something that I think everyone should carefully consider.

I hope this post has made you think about where you’d draw your own ethical lines, and I’d love to hear your thoughts on any ethical dilemmas you’ve run into throughout your Miles & Points journey as well.

4 Comments
  1. Eric

    Iv’e worked hard my entire life and paid my bills promptly since the beginning. Raised two kids and supported my wife. Saved hard for retirement since forever. I haven’t been able to responsibly afford to fly anywhere off this continent on vacation since the early nineties.

    In my lifetime real wages have declined while corporate profits have gone stratospheric. Computers where supposed to give us a 4 day work week. Everyone was supposed to be enriched by tech. The divide between the rich and the poor has never been greater.

    Let’s also remember the value of the data that the CC companies are compiling on our spending habits

    I know that’s rationalizing but I feel no qualms about churning. If I felt I could MS with complete safety to advance the speed I would. The least of my worries is whether my small slice of enjoyment is hurting multi billion (trillion?) dollar corporations. I dont buy that anyone is actually being hurt by this.

  2. Alex YWG

    The way I look at it is that we are paying for credit cards no matter even if you are not using a credit card. Its debatable how many people use cash or debit cards but the cost of buying a product and using a credit card is already incorporated into the cost of the product. So regardless if you use a credit card or dont use one you are paying for someone to be able to use their credit card. Since corporations make money and are charging us for something we might or might not use, its best to use a credit card and at least get some value out of it.

    Now having said that I have had smaller places ask me to use a different credit card or a debit card instead on occasion and I have done that in order to help them out. Not sure if many people know this but there is a higher vendors fee associated with "higher" or "elite" credit cards. For example if you use a AMEX platinum card to pay for a product compared to a basic AMEX basic card, the vendor would pay a higher percentage to the credit card company on the AMEX platinum card compared to the AMEX basic card.

    And the last reason why I dont feel bad about churning credit cards is that you keep hearing about how the big banks in canada are recording record profits all teh time. I remember 20+ years ago where you could having a basic account and it would not cost you anything. Now in order to not pay for an account you have to have multiple services such as a credit card, bank account, investment account and possibly a mortgage before they will waive the $10-30 per month fee on your bank account.
    Oh and heaven forbid you pay off you mortgage, you now have 1 less service so the $10-30 monthly fee automatically gets charged, and yes that has happened to a family member I know. I had to argue with the bank for weeks before they relented and waived the fee.

    I do not feel an ethical dilemma on maximizing the points I aquire since the financial institutions in canada have put their own profit ahead of the consumer and are nickle and dimeing us all over the place. I can name numerous examples I have come across but I dont want to go on a rant. I just want to enjoy my points and keep learning how to maximize my options.

  3. DenB® YTO

    Caveat Vendor.

    Kudos for trying to start a conversation, Ricky. You’ve made one categorical statement I disagree with, or at least which I think is debatable: that when "we" take a luxury trip, we’re "diluting" the pool of opportunity for others. I’d argue that next Thursday’s Cathay First availability YVR-JFK is not "diluted" for others if I fly it, unless demand exceeds supply. In many cases, it’s a self-expiring opportunity which perhaps only I will take. Face it, many of your F flights were in non-full F cabins. If you take the "last F seat", the carrier might release another one. A "pool" therefore is a bad analogy. I’d say we’re the dog, eating the fallen dinner scraps off the floor; they’d have been wasted otherwise and Mastyer might throw more on the floor for us, we really don’t know.

    An empty seat on a plane exists only until the forward door is closed. Did someone with a more legitimate (moral! ethical!) claim want the seat I got? Or was it just gonna be left empty? Anyway, as we all know too well, it’s really fellow PointsMiles folks with whom we’re competing for the scraps.

    If we’re MSing our way to loyalty points, which we use to grab hotel rooms and airline seats, is there an ethical issue because Amex paid for the Aeroplan/Bonvoy points? Maybe, but wait, we don’t own the points. They don’t owe us the points. The Terms of every program, every company in the chain that led to that ANA F flight, that Ritz suite, say "if we don’t like you, if we don’t trust you, if you don’t use the program as we intend, the points in your accounts are ours, not yours, buh-bye. Now please use our card, apply for another, refer your friends, spend lots on the card and Nanny will give you a cookie."

    The companies look at us, after they read your blog, my comments, and all the other media in this space, and yes, after their spies attend our conferences, conventions and local meetups: "how much shrink are we losing to the gamers? Is it still within our acceptable range?" They need us, because although we’re enjoying their tasty scraps, it’s scraps, so they don’t care. When we jump up on the table, they swat us down. When Master wants to test something, he holds back on the scraps. But then Mistress throws down something yummy and we run to her. Master soon smartens up and competes.

    We’re evangelizing their glorious products, services and loyalty programs to "civilians", most of whom won’t get the best scraps because we know where Master hides them, and when.

    They like us, they really really like us! And if we stopped pushing limits, exploiting loopholes and blogging about F travel and churning, they’d loosen their practices (not their Terms) to get the game busier again.

    It’s a corporation. It’s not going to love you back.

  4. Ted

    The ethical discussions are important to have and as you said everyone will approach it differently. One area that I think would be interesting to cover Ricky is the very real ethical dilemma of using points accumulated as a sole proprietor or as a corporation then used for personal travel. The CRA looks at points accrued on a personal basis as a form of discount analogous to "cash back". However when accumulated for tax deductible, business expenses they view that benefit as a taxable benefit.

    Many business owners wouldn’t blink at using their aeroplan miles for this purpose especially when sign up bonuses such as TD’s Business Aeroplan miles go right into your personal Aeroplan account. However the actually moral dilemma according to the CRA paints a different picture.

Ricky Zhang

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