'I got shafted': Air Miles collectors locked out of cash rewards for expiring miles

Customer frustration is mounting over Air Miles' refusal to let collectors redeem expiring miles for easy-to-use cash rewards.

Instead, whether customers like it or not, all miles set to expire on Jan.1, 2017 have been relegated to a "dream" category. That category offers a lot of high-priced travel and merchandise rewards that some people don't find appealing.

"Your company is a disgrace," a collector recently posted on Air Miles' Facebook site. "Changing thousands of Air Miles into dream miles was a nasty trick."

The site is riddled with complaints about the issue.

Some collectors are demanding that Air Miles make amends by allowing them to redeem their dream miles for cash rewards like gift cards for groceries, restaurants, movies and some retailers.

But the loyalty program claims its system is incapable of processing such a request. 

That explanation has only further ignited the fury of collectors who don't buy it.

"What they did was very underhanded," said collector Gary Johnson from Burlington, Ont.

No gift cards for you

Johnson recently tried to cash in his 656 miles before some of them expire.

On Jan 1., a new five-year expiry rule for Air Miles kicks in. On that day, all unused miles collected before 2012 will become worthless.

Johnson had his heart set on restaurant gift cards. But when he tried to claim them, the 80-year-old discovered he no longer had access.

"I was angry. In the past, I never had a problem cashing them in."

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Air Miles used to offer a selection of gift cards along with all other products, in one large catalogue.

Then in late 2011, the loyalty program announced a new cash category for gift cards.

Collectors aware of the change could switch their accounts and start collecting cash miles from 2012 onward. Air Miles locked all unspecified miles and all miles earned before 2012 in the separate dream category.

That means the mound of miles set to expire on Jan. 1 can't be redeemed for cash rewards — an easy option when trying to use up even a small number of points.

A $10 gift card for numerous retailers can be redeemed for just 95 miles.

All Johnson's miles are now stuck in the dream category. He can't afford many of its offerings such as flights and electronics, and nothing in the catalogue even interests him.

In August, Johnson fired off a complaint to Air Miles' owner, Toronto-based LoyaltyOne. LoyaltyOne's parent company is Alliance Data Systems in Texas.

Johnson says he received a call back from "Natasha" at Air Miles. "I told her, 'You're treating me very badly by not allowing me to convert existing [dream] miles over to cash miles.'"

Johnson says Natasha told him, "'The system won't allow it.'"

That's the explanation Air Miles often offers up. "Our system does not have the capability to transfer miles between the accounts," it has stated numerous times on social media.

Johnson used to work in IT systems development and doesn't believe the explanation. "Systems work the way management wants them to work," he said.

For a fee, Air Miles will transfer miles from one person's account to another. So, CBC News asked the program why it can't also transfer a collector's dream miles to cash.

"Dream miles and cash miles are two distinct programs," said spokeswoman Natasha Lasiuk in an email to CBC News. She explained they "have their own economics."

Cash rewards have a fixed value, while the amount of miles required for dream rewards varies by the product.

Lasiuk added that customers can switch categories at any time to start collecting cash miles going forward. 

'A cash grab'?

Johnson believes LoyaltyOne is trying to conceal a different reason why it can't make the transfer from dream to cash. He claims the company wants to make it more difficult for collectors to redeem soon-to-expire miles.

"Clearly this is just a cash grab for them."

The program started in 1992 and boasts more than 11 million members. Those who let their miles expire on Jan. 1 will save LoyaltyOne a lot of money and improve its profits.

Johnson argues any collector dissatisfied with dream rewards would redeem their expiring miles for gift cards if they could. Because they can't, some will simply let their points go to waste.

"I think there's a very clear financial benefit for [LoyaltyOne]."

Collector, Vinnie De Luca in Toronto agrees. "It's their way of not giving clients what they owe them."

All for nothing?

De Luca has almost 7,000 dream miles that will expire in January. She too wanted to get some restaurant gift cards and says nothing in the dream category interests her. "It's all garbage."

She says without access to the cash category, she fears her points will go to waste.

"I just feel I've wasted all these years collecting," says De Luca. "It's like I got shafted."

Air Miles says it created two separate rewards categories not for its own benefit, but for the benefit of customers.

Lasiuk explained it designed a new program offering instant redemption gift cards and moved all cash rewards into the category to "increase the options for collectors."

But many collectors don't believe the change is working to their benefit as they rush to redeem expiring miles.

De Luca and Johnson did manage to get one perk. After they complained to LoyaltyOne, both received some complimentary cash miles for gift cards.

"Essentially it was a kiss-off, saying get out of our hair," concludes Johnson about his bonus gift of 50 cash miles.