Ideas that should work

I have a fascination with travel hacking ideas that sound great in principle but for one reason or another are unworkable in practice. For example, I earn a lot of Hilton Honors points, and am perfectly satisfied with the value I typically get redeeming them, but it's not the kind of value you can get at a property like the Conrad Maldives Rangali Island (0.96 cents per point on a sample five-night stay).

Since, in principle, there must be some people paying cash for such a stay, and since I can get it at a far lower cost, we should be able to split the difference, giving me a higher "redemption" value than I usually see, and giving a wealthy vacationer a nice discount off retail. While coupon brokers do exist, I've seen no evidence that this market is deep enough to sustain a gold rush of travel hackers selling points, once transaction fees and the broker's own cut are taken into account.

Here are a few other ideas I think should work, but face obstacles in practice.

Reselling/giving away gasoline

Periodically grocery stores will allow PIN-enabled prepaid debit cards to earn their proprietary points that can be redeemed for a discount off gasoline purchases.

I don't drive anymore, but I understand that car owners treat gas purchases as a major component of their monthly budget. In principle the fact that I, a car-free urban-dwelling millennial, am earning zillions of dollars in free or discounted gasoline, while others are buying just a few gallons at a time in order to get to their minimum wage jobs, should create an opportunity to make some money (or at least get some zakat out of the way on the cheap).

But the obstacles are rather profound. Since I don't have a car or any gasoline containers, or even know where the nearest gas station is, I certainly can't do the work of buying a bunch of cheap gasoline and then spreading it around to the downtrodden.

Likewise, I only have a few of the little bonus cards they give you at the grocery store, so I can't walk around handing them out. I think I could register it to a phone number, but then I'd have to hand out my phone number (or somebody else's) [ed: I just checked and I think I signed up with a fake name so I can't seem to register online at all].

But there's one more problem that I think poses an even more profound obstacle: on what basis would the gas be provided or split? Consider a sort of ideal condition: I find a group of struggling single mothers in the suburbs who all have to drive to their three jobs on the nightshift. I want to save them some money on gas, asking nothing in return (remember, I don't need the stuff so it costs me nothing). I photocopy 5 versions of my plastic card so they can all use them at the gas station whenever they fill up. These promotions don't come along very often, so most of the time there are no points on the card, but occasionally they save $30 on a tank of gas ($1.50 per gallon on a 20-gallon tank).

All I've done is created a situation of conflict and resentment among folks who never asked me to come along and invent this scheme in the first place! It would be a constant battle to try to seize the discounted gasoline each time a promotion came along, and whoever lost out (filling up her tank on the last day of the promo when all the points had already been redeemed) would feel terribly ill-used.

So what did I actually do? I just gave my card to a reader whose son lives in the area and drives to work. I didn't even have to give him my phone number.

Collective Rewards Accounts

This is an idea that I know has actually been implemented by some sophisticated travel hackers, but which I think still has obstacles that make it difficult for most people to pursue.

Most loyalty programs (with obvious exceptions, like Korean Air SKYPASS) don't have strict rules regarding on whose behalf points can be redeemed. That means a team of 4-5 travel hackers could each specialize in different programs, spreading devaluation and unredeemed-point risk across a larger number of people (especially if they have traveling families). Between a Delta Diamond Medallion, American Airlines Executive Platinum, and United Premier 1K, you'd have access to refundable award tickets on all three airline alliances, and no one member would feel the pain of being "locked in" to an award program with limited availability (which is more or less all of them these days).

A similar idea applies to hotel loyalty programs which require paid stays to qualify for elite status but also allow elites to transfer their benefits to others (see Frequent Miler's recent post for some additional thoughts in this vein). World of Hyatt Globalist status qualification requires 60 paid nights, which is a lot of nights for one person, but less significant for a group of 4-5 frequent travelers. By crediting every paid night to a single person's account, they would be able to secure Globalist status for the entire group (and trigger potential points windfalls during promotions).

Finally, a group approach to credit card applications would have significant potential benefits, allowing every member of the group to stay below arbitrary thresholds (staying below 5 applications each every 2 years would leave the entire group eligible for outsized signup bonuses from Chase, for example), while giving the entire group access to lucrative offers like 5% cash back cards from Wells Fargo, which according to their terms are limited to 6 months per person out of every 16.

So what's the problem? First, each individual member of the group would have responsibilities and limitations. It may be that when you joined such a group you preferred flying United and didn't have a problem being the designated Premier 1K. But a change in work or flight schedules might suddenly make flying United unacceptably inconvenient. Your partners are meanwhile diligently pursuing Diamond Medallion and Executive Platinum. What do you do?

Second, the group would need a fairly sophisticated method of keeping track of each member's contributions and withdrawals from the pool in order to maintain harmony. It's true that if well-implemented there should be far more total points in the pool than would ever be redeemed, but if two members both want to fly their extended families on Lufthansa First the same weekend, you can imagine the pool of Star Alliance miles getting pretty depleted.

These are surmountable problems, and indeed I know of groups that pursue collective strategies like this. But despite the obvious advantages I don't think such a system is simple enough to implement for it to be practical for most travel hackers.

Instead, the far more accessible solution is one-time transactions mediated by cash or other instruments. I think that's a reasonable compromise, but nevertheless reduces the potential for outsized value a truly collective strategy would provide.