The Scam Economy: ScoreBig edition

It's natural for travel hackers (and their concerned family members) to wonder, who really pays for what we do? The obvious answer is, "everybody else." There are enough people buying low-denomination gift cards with cash to make it worthwhile to sell high-denomination gift cards with credit cards. Enough people get trapped under high-interest-rate credit card balances to make it worthwhile to incentivize purchases made with credit cards for those who pay their balances in full and on time. Wells Fargo appears to have simply been a basket case, but they undoubtedly had something similar in mind when they launched their aggressive cross-selling strategy.

I've long wanted to write a book about that economy: the scam economy. I got to thinking about the subject again when I saw Anita's post at Frequent Miler about ScoreBig's current financial difficulties. We can get used to travel hacking, reselling, and extreme discounting, but it's worth taking a step back to really appreciate that the overwhelming majority of these companies are simply scams, and more and more we live in a scam economy.

What the real economy looks like

In the real economy, Lin-Manuel Miranda had an idea for a musical, wrote it, raised some money from investors, hired some actors and musicians, and started selling tickets.

Hamilton was a huge success, and will run on Broadway for years, then close just so it can reopen and also win the Tony for Best Revival.

Add capitalism's secret sauce

People have been putting on shows for a long time, from Russia's traveling skoromokhi to Shakespeare's Globe.

What advanced market capitalism adds is that Lin-Manuel didn't have to put this show on by himself. He didn't need to build a theatre (the Richard Rodgers Theatre opened in 1924), he just has to rent it out. He didn't need to negotiate a contract with his actors or musicians, since they belong to unions (Actors' Equity and Associated Musicians of Greater New York, respectively) that handle those negotiations for all of Broadway. He didn't even need to handle tickets sales, since Ticketmaster has deep experience collecting money from patrons and handing it over to production companies, minus a reasonable fee.

Enter the scam economy

What does ScoreBig add to this equation? Well, for a variety of reasons Lin-Manuel chose to sell his tickets for less than the price that would attract only the number of customers capable of filling up the theatre. Economists call that the "market-clearing" price or the "equilibrium" price, but in the real economy, people set all sorts of prices for all sorts of reasons.

If Lin-Manuel wants to sell tickets for a price low enough that working-class families could conceivably someday afford to attend his show, rather than perform for oil sheikhs and Russian kleptocrats all week, that's his prerogative — it's his show, after all.

It also happens that sometimes people buy tickets that they ultimately don't use for themselves. Maybe they have an emergency that keeps them from the theatre; maybe they bought them speculatively in the hopes they'd go up in value. ScoreBig and sites like it allow owners of unused tickets to sell them to those who were unable to buy tickets at their face value, since the show is sold out months in advance.

But Anita's experience shows that this isn't the function ScoreBig was performing. They weren't moving tickets from willing sellers to willing buyers:

"there may be an issue regarding the continued validity of the tickets you purchased"
"ScoreBig’s email advised that only the seller of the tickets could confirm the validity of the tickets"
"The CSR said...'If it makes you feel any better, we aren’t getting paid for these.  We made a decision as a company that we are honoring the tickets because it is the right thing to do.'”

What the hell is going on here? I can't say for certain, but here's one version:

• Someone wrote a script that was able to purchase a block of Hamilton tickets at their face value;
• After successfully booking the tickets, they sold them on at a markup to a large broker;
• That broker listed the tickets for sale on a variety of platforms, including ScoreBig;
• In order to attract a larger market share, ScoreBig aggressively offers discounts through cashback portals, gas discount programs, and other extreme couponing techniques;
• ScoreBig collected money from Anita for the tickets, but doesn't pass it on to the broker until some time after the tickets are delivered;
• ScoreBig uses the money it collects from Anita to cover its operating expenses, debt, and to pay brokers for tickets that have already been delivered;
• ScoreBig doesn't make enough money doing this, so faces a liquidity crisis and has to renegotiate its capital structure, stiffing its vendors and leaving them on the hook for Anita's tickets.

Let's call this exactly what it is: a scam. And it's a scam whether or not ScoreBig stays in business, and whether or not they ever made any money doing it.

I don't have anything against reselling tickets, whether it's on the pavement in front of the theatre or online. I don't have anything against buying tickets speculatively in order to resell them. I don't have anything against middlemen stepping in to facilitate those sales.

But when you borrow money to start a company that requires an increasing number of customers funneling money in through the front door to cover your operating costs, liabilities, and to pay your vendors, and then when the money coming in the front door ends up not being enough to cover those liabilities you stiff both your customers and your vendors, you are running a scam, pure and simple.

Obviously there's a connection between ScoreBig's business model and the financialization of the American economy in general. If private equity bankers can raise billions of dollars to purchase profitable companies, load them up with debt, strip them of assets, and distribute the cash to themselves and their partners, who am I to complain about ScoreBig's business model?

And maybe that's right. Maybe if we want Lin-Manuel to be able to raise the money he needs to put on the greatest show of the 21st century, we have to tolerate the ScoreBigs of the world ripping off their customers and vendors.

But that doesn't mean we should get jaded about the scamification of our economy. If you want to bet big on ScoreBig, or Uber, or AirBNB, or any of the other criminal enterprises masquerading as technological innovations, go ahead, and just pray you're not the last one left at the party, holding the bag.

Hyatt Diamond benefits, ranked

I'm still plodding towards requalifying for Hyatt Gold Passport Diamond status after successfully matching to the status late last year. I've been intentionally booking towards Hyatt whenever it makes sense financially and logistically. That's included the Park Hyatt in Vienna, the Grand Hyatts in Berlin and New York, the Hyatt Fisherman's Wharf, a whole slew of Hyatt Regencies, and one Hyatt House.

That's given me a chance to see how benefits are implemented in practice at a range of properties. Here's my list of Hyatt Diamond benefits, ranked based on their value to me in practice:

1. Late check out. Diamond members get a guaranteed 4 pm check out time (except at Hyatt Resorts and Casinos and Residence Club properties). I have used this on virtually every one of my Hyatt stays this year. I love being able to leave my belongings in my room instead of having to deal with left luggage offices, and be able to relax in the room while waiting for a afternoon train or flight. And the benefit really is guaranteed: usually check in agents even offer it proactively.
2. Welcome amenity. I often write theoretically about the 1,000-point Diamond welcome amenity offsetting the points cost of a Points + Cash stay, but in fact I almost never choose the points amenity. That's because when checking into a property after a long day of travel I'd much rather have a bottle of wine and a cheese and nut platter (or whatever looks good) brought up to the room while I get settled in.
3. Lounge access. Access to the lounge, and the ability to grab water bottles and coffee or tea throughout the day, is a good way to save money and stay hydrated if you're not sure about the local water. Properties that offer hors d'oeuvres and drinks in the evening are also great places to make evening plans.
4. Breakfast. I've had some phenomenal breakfasts as a Hyatt Diamond, but this benefit has to go below lounge access simply because I'm more likely to sleep through breakfast than I am to sleep through an evening cocktail hour. Your circadian rhythm may vary.
5. Suite upgrade awards. While this is often mentioned as a key benefit of Diamond status, you can ask anyone with Diamond status how much value they really get out of it, and the answer is usually: "not much." I've redeemed two of my suite upgrade awards, at the Park Hyatt Vienna and Hyatt Fisherman's Wharf. And they were both great suites that made the trips feel a little more special! But the obstacles to getting value from suite upgrade awards are significant. First, your awards expire at the end of the February after your qualifying year (so 2016 upgrade awards expire February 28, 2017), and can't be used for reservations beyond that date. Second, an eligible suite has to be available at the time you make the request — you can't waitlist for a suite upgrade. That means longer stays, where the upgrade would be most valuable, are also the hardest stays on which to redeem upgrades!
6. Point bonus. Diamonds get a 30% bonus on base points earned on paid and Points + Cash stays. This is essentially a rounding error, worth perhaps $1 per night on a Points + Cash stay (I earned 89 bonus points on a recent Points + Cash stay with a $55 cash component).
7. United lounge passes. You get two United lounge passes for qualifying as a Hyatt Diamond. That's fine, but it's not a recurring privilege of membership or anything. It's just two United lounge passes.
8. 48-hour guarantee. Since Hyatt offers generous guaranteed award availability when there are standard rooms available, their 48-hour guarantee is just a way to overpay for rooms when a property is completely sold out. Hopefully you'll never use this benefit!
9. Premium Wi-Fi. It's hotel Wi-Fi. It's not going to be great, whether it's "premium" or not.
10. Best Room Upon Arrival. I know that hotel staff have a mental inventory of which rooms are "good" and "bad," but this is a joke benefit.

Looking at this list, it's immediately clear that all the value of requalifying for Diamond status comes from items 1-4, which clarifies the question: will I get enough value from late check out, welcome amenities, lounge access, and free breakfast in 2017 to justify chasing the remaining stays required to requalify?

I'm not sure! But I'm thinking about it.

Overdiversifying, underdiversifying, and practicing what I preach

I recently had the pleasure of redeeming 30,000 American AAdvantage miles for a $290, one-way domestic plane ticket, which gave me an excellent opportunity to reflect on some travel hacking wisdom I never get tired of preaching: the least valuable point is the one you don't redeem.

The real risk of underdiversifying is paying cash

The point of travel hacking should be to pay as little as possible for the trips you want to take. I'm absolutely indifferent to whether you want to travel domestically or internationally, by plane, train, or automobile, with your family or alone, in first class or in steerage. I just want to help you spend as little money as possible to do it.

Diversifying your points balances is a way of achieving that. With no rewards currencies at all, you'd pay the retail cost for all your travel, minus any savings achieved by booking through online portals, paying with discounted gift cards, taking advantage of best rate guarantees, and the other techniques we have available.

With a single rewards currency, you can start to save money when you're able to find award space with that loyalty program. If you only collect Hilton HHonors points, you're in good shape as long as you're visiting a city with a Hilton property, and that property has award space. You'll still pay cash for your airfare, but hotels can often be the biggest expense on a trip, so the savings there can quickly add up.

With multiple rewards currencies, you can start to bring down your costs considerably. If you earn Ultimate Rewards points with an Ink Plus card, then you'll be able to save money by redeeming Hyatt Gold Passport points when you visit a city served by Hyatt, and by redeeming United, British Airways, Flying Blue, and Southwest points when those airlines and their partners make award space available. Even better, when award space isn't available, you can still get a 20% discount on revenue flights by redeeming Ultimate Rewards points at 1.25 cents each.

I won't belabor the point: having more rewards currencies reduces the chance that you'll have to pay retail for your travel. As long as those rewards currencies are acquired cheaply enough, that means each redemption saves you money on your travel, which, again, is the point of the game.

The real risk of overdiversifying is unredeemed balances

Many travel hackers and bloggers believe that "earning and burning," or keeping points balances as low as possible by redeeming award currencies roughly as quickly as they're earned, is the best approach. The reason normally given for this is that regular devaluations decrease the value of earned miles and points, so your balances will never be worth as much in the future as they are in the present.

Meanwhile, I spend no time thinking about devaluations, and don't think you should either. Your travel hacking practice should be giving you big enough savings on each redemption that even substantial devaluations won't affect the calculus of redeeming miles versus spending cash.

But the logic of diversifying your points balances really can be taken too far!

Above I said that when you don't have the right currency to pay for the trip you want to take as cheaply as possible, you run the risk of having to pay cash and not save any money at all. One way to react to that possibility is to accumulate high balances in as many programs as possible, to ensure that you always have enough of the right currency for the job.

The problem with that approach is that it exposes you to the real risk of overdiversifying: unredeemed balances. From hundreds of interactions with readers and friends in the community, I have come to believe that accumulating large, unredeemed balances is the single biggest mistake made by even experienced travel hackers.

There's no mystery to how it happens: a new credit card is launched, or refreshed, or suddenly has a much higher-than-usual signup bonus. Once the credit card affiliate bloggers get their links, you see two or three weeks of blanket coverage online. Sometimes the coverage even runs over into the mainstream media. Even those who are disgusted by the orgy of profiteering start talking about the orgy of profiteering, bringing the offer in front of even more eyeballs.

And then, like clockwork, people start asking: "I have all these Wyndham/Membership Rewards/Amtrak/Choice/Trump Shuttle points. What do I do with them?"

The answer, unfortunately, is usually "nothing."

Pay as little as possible for the trips you want to take

Without travel hacking, most of us couldn't afford to spend a week in the Maldives. But even without travel hacking, many of us could afford to fly home for Thanksgiving.

Paying $150 for a $600 plane ticket you'd otherwise pay cash for is a savings of $450.

Spending $2,500 for a trip someone else paid $15,000 for is an expense of $2,500.

I've heard that the Maldives are lovely, and I'm sure I'd enjoy visiting. But speculatively accumulating huge balances at random as signup bonuses change and cards are launched or discontinued, instead of targeting programs that save you money on the trips you want to take is a way of spending money, not saving it!

Again, this says nothing about the merits, or lack thereof, of the Maldives, of your favorite Park Hyatt, or of Emirates First Class. I'm sure they're lovely. But being talked into taking someone else's idea of the perfect trip is an expensive mistake — travel hacking just makes it less expensive.

Conclusion: my fantastic AAdvantage redemption

All of that brings me to my 30,000-mile, $290 one-way American Airlines ticket. If you believe that the goal of travel hacking is to get the highest dollar value from each redeemed mile, this is a preposterous redemption — less than a penny per point!

But I had a different problem: an unredeemed American Airlines balance. I'd earned the miles cheaply, through Barclaycard US Airways anniversary miles, a negative-interest-rate loan I took out, and some experiments I'd been running through the American Airlines shopping portal, so I was certainly saving money on the ticket compared to paying cash.

But even more importantly, I judged ridiculous the idea of paying $200 (the cash value of the 20,000 US Bank Flexpoints I'd need to redeem) or $232 (the cash value of the 23,200 Ultimate Rewards points I'd need to redeem) when I had more than enough AAdvantage miles sitting in my account unredeemed. I didn't have a plan for the miles because I had earned them more or less accidentally: I had overdiversified into AAdvantage miles, and was sitting on a balance of miles that were, unredeemed, worthless to me.

The point of travel hacking is to pay as little as possible for the trips you want to take. I wanted to take a $290 flight and $5.60 in taxes and fees was as little as I could pay for it. Mission: accomplished.

Reminder: Starwood Preferred Guest transfers to Amtrak Guest Rewards

It feels like it's been a while since I've written about Amtrak Guest Rewards! That's mainly because the program underwent a dual devaluation in late 2015 and early 2016:

• On December 8, 2015, Chase Ultimate Rewards points could no longer be transferred to Amtrak Guest Rewards;
• On January 24, 2016, the previous fixed-rate award chart was discontinued and all Amtrak Guest Rewards redemptions became revenue-based.

That made Amtrak Guest Rewards points harder to obtain (since they couldn't be transferred from Ultimate Rewards) and less valuable (since obscenely lucrative fixed-rate sleeping cabin redemptions began costing additional points in line with their revenue cost).

The program still has value, though — in fact, more value than I expected.

Starpoints can still be transferred to Amtrak

While there's no 5,000-point bonus for transfers of 20,000 Starpoints or more, all Starwood Preferred Guest members can transfer up to 100,000 Starpoints to Amtrak. The minimum transfer is 2,500 Starpoints for non-elite members, 1,500 Starpoints for Gold Preferred member, and there's no minimum transfer for Platinum Preferred members.

Amtrak Guest Rewards points can be valuable, more valuable, or very valuable

Amtrak has always had last-seat-availability for Amtrak Guest Rewards redemptions, meaning Amtrak Guest Rewards points could be redeemed for any seat on any train up to the moment of departure (although this was mitigated somewhat by their onerous blackout dates). As you'd expect, before the program went revenue-based, that meant there was more value in expensive, last-minute redemptions than there was in further out, cheaper redemptions.

That's still true today, although for a different reason. Today, the reason that Amtrak Guest Rewards points are more valuable for closer-in redemptions is that they can't be used for "Saver" fares. A simple example should help illustrate the point:

• On Friday, October 21, a Northeast Regional "Value" fare between Washington, DC, and Boston costs $140, or 4,830 Amtrak Guest Rewards points, for 2.9 cents per point in value;
• On Friday, November 25, the same train has a "Saver" fare of $79, but Amtrak Guest Rewards points can't be redeemed against "Saver" fares at 2.9 cents each. They can only be redeemed against the more expensive $108 "Value" fare at 2.9 cents each, or 3,726 Amtrak Guest Rewards points. But if you'd otherwise book the available $79 fare, not the $108 fare, you're only getting 2.12 cents per point!

In other words, fixed-value redemptions against "Value" fares are a great deal when "Value" fares are the only ones available. That means close-in redemptions are more likely to give greater value, just like they did before the program's devaluation.

These 2.9 cent-per-point "Value" redemptions are available for coach and sleeper-cabin tickets, while Acela Business and First Class redemptions give between 1.71 and 2.56 cents per point (it's not immediately clear to me why some Acela redemptions are at the 1.71-cent level and some are at the 2.56-cent level).

Conclusion: Starpoints are valuable — and this is one more valuable use of them

I've been doing this long enough to know that everybody has their own favorite use of each rewards currency they collect. You might be earning and saving up your Starpoints for a big Alaska partner award, or a Singapore award, or just a hotel stay at one of Starwood's bespoke properties.

But earning up to 2.9 cents in fixed value per dollar of unbonused spend is well above what you're likely earning on your cash back credit cards. So while you're saving up for your dream Starpoint redemption, you can also be saving money by transferring them as needed to Amtrak Guest Rewards, rather than being stuck paying cash for your Amtrak tickets.

Instead of thinking of Amtrak Guest Rewards redemptions as being less valuable than your perfect redemption, you can think of them as being one more reason Starpoints are so valuable in the first place.

Wyndham Rewards is a pretty good program. But is it necessary?

The "news hook" for this post is the launch of a new landing page for Barclaycard's Wyndham Rewards Visa cards, raising the annual fee on the Visa Signature card from $69 to $75 and cutting the earning rate on purchases to 1 Wyndham Rewards point per dollar except on gas, utilities, and grocery purchases.

Meanwhile, the landing page for the old offer is still live, showing a $69 annual fee, a signup bonus of 45,000 Wyndham Rewards points after spending $1,000, and an earning rate of 2 Wyndham Rewards points everywhere.

Barclaycard has, in the past, been pretty good about preserving benefits for existing customers after a product has undergone significant changes. For example, Barclaycard US Airways customers who signed up under a 10,000-anniversary-mile offer continue to receive those anniversary miles, to the best of my knowledge (I cancelled my anniversary-mile card when I wasn't offered a retention bonus).

That means that in all likelihood there's a narrow and narrowing window to sign up for the current, superior offer, and retain its superior earning rate on otherwise-unbonused spend.

So, should you?

Wyndham Rewards is a pretty good program

I'm on record from all the way back in April, 2015, saying that the new fixed-rate Wyndham Rewards program would be great.

I think that prediction has been borne out by events. Wyndham hasn't gone to aggressive lengths to exclude properties or dates from their 15,000-point fixed-rate awards, and the program doesn't seem to have experienced mass defections from properties unwilling to accept however much Wyndham is compensating them for these fixed-rate awards.

Compared with a 2% cash back card, the imputed redemption value of Wyndham Rewards award nights is $150, since the same $7,500 in unbonused spend can earn you either $150 in cash back (which can be spent on paid hotel stays or anything else) or a free night at any Wyndham Rewards property in the world.

Comparing Wyndham Rewards

Whether Wyndham Rewards makes sense for your own travel hacking strategy depends on both your goals and your alternatives. First, here's a quick glance at the imputed redemption value of Wyndham Rewards award nights compared to the imputed redemption value of award nights with Hilton HHonors (earned at 6 points per dollar), Hyatt Gold Passport (purchased for one cent each in Ultimate Rewards transfers), Starwood Preferred Guest (earned at 1 point per dollar), and Club Carlson (earned at 5 points per dollar):

View fullsize

What you see, as you'd expect, is that fixed-rate Wyndham Rewards stays cost less in foregone manufactured spend than higher-tier properties with the other chains, but cost more in foregone cash back than lower-tier properties with the other chains.

In other words, you can save money staying at the Wyndham Grand Chicago Riverfront instead of the Waldorf Astoria Chicago (Hilton), staying at the Wyndham Midtown 45 instead of the Park Hyatt New York (Hyatt), the Wyndham Garden Manhattan Chelsea West instead of the Gramercy Park Hotel (Starwood), and at the Days Inn London Hyde Park instead of the Radisson Blu Edwardian, Sussex (Club Carlson).

Meanwhile, the other programs shown above offer award tiers with imputed redemption values below $150 (highlighted in red) and, of course, some hotel nights simply cost less than $150 in cash, especially when combined with cashback portals and online travel agency rewards programs.

That means that by combining Wyndham Rewards with one or two other programs, as well as a cash back card, you could theoretically limit your downside (since the most you'd ever pay is $150 in foregone cash back) while having almost unlimited upside as you take advantage of cheaper room rates and lower-tier properties in other loyalty programs.

But is Wyndham Rewards necessary to a travel hacker?

All the foregoing is meant to say that I commend Wyndham Rewards for trying something new and fun.

The trouble is that it's difficult to come up with an actual travel hacking strategy that incorporates Wyndham Rewards.

Let me put it this way: I'm totally indifferent between road trips with your kids and luxury vacations with your romantic partner. You do you!

But if you're taking road trips with your kids, you should be able to take advantage of the dirt cheap low-category properties with the chains highlighted in red above.

And if you're taking luxury vacations with your partners, the difference in imputed redemption value between the most luxurious Hilton and Hyatt properties and the most luxurious Wyndham properties just isn't that big.

Conclusion: the right way to use Wyndham Rewards is to plan Wyndham Rewards trips

The $69 Wyndham Rewards Visa credit card has a good signup bonus (3 nights at any Wyndham Rewards property in the world) and a good earning rate ($150 per night in foregone cash back for a night at any Wyndham Rewards property in the world).

But if you have a developed travel hacking strategy already involving Hilton, Hyatt, and Starwood or Club Carlson points, you're unlikely to accidentally get a good value from a Wyndham Rewards credit card.

That means the right way to pay as little as possible for the trips you want to take is to proactively look for the Wyndham Rewards properties that are going to get you outsized value, earn the points necessary for your stays, and then redeem them. Speculatively signing up for Wyndham Rewards credit cards and speculatively manufacturing spend is unlikely to yield savings any greater than those you can earn much more consistently with other programs.

The essential Ritz-Carlton properties

Long-time readers know that I can sometimes have an unfortunately literal approach to travel hacking. So when I decided to look into the Ritz-Carlton program to see if there were any good opportunities to take advantage of Marriott Hotel + Air packages at Ritz-Carlton properties, now that Starpoints can be transferred to Marriott Rewards at a 1:3 ratio, I just looked at every single Ritz-Carlton property.

What would make a Ritz-Carlton Hotel + Air package a good deal?

The first thing to keep in mind is that Ritz-Carlton Hotel + Air packages are priced in just 2 groups: Tier 1-3 packages and Tier 4-5 packages. But the packages are priced on the basis of the highest Tier in each group. In other words, Tier 1-3 packages are priced as 7 nights at a Tier 3 package plus 120,000 miles, and Tier 4-5 packages are priced as 7 nights at a Tier 5 property plus 120,000 miles.

That means, before even getting started, stays at actual Tier 3 and Tier 5 properties are the most likely to prove a good value:

• 7 award nights nights at a Tier 1 property would cost 180,000 Marriott Rewards points. To redeem a Hotel + Air package for those 7 nights, you'd pay 420,000 Marriott Rewards points, giving you a transfer value of 2 Marriott Rewards points per airline mile (0.67 Starpoints per mile) rather than 1 Marriott Rewards point per mile (0.33 Starpoints per mile) at a Tier 3 property.
• 7 nights at a Tier 4 property would cost 360,000 Marriott Rewards points. To redeem a Hotel + Air package for those 7 nights, you'd pay 540,000 Marriott Rewards points, giving you a transfer value of 1.5 Marriott Rewards points per mile (0.5 Starpoints per mile), rather than 1 Marriott Rewards point per mile (0.33 Starpoints per mile) at a Tier 5 property.

Next, any given Ritz-Carlton property could only be a good deal if there are no nearby properties that provide an even better deal. That's the idea of opportunity cost: a Ritz-Carlton stay is only the best deal if it's a better deal than any other equivalent property.

What's an "equivalent" property? Well, here my literal-mindedness kicks in again. I take a look at a map, and if there's a Wyndham, Hilton, Hyatt, or Starwood property in roughly the same neighborhood, I say it's equivalent.

Then I make one exception: since our objective is to convert Starpoints to airline miles at a better rate than the standard 1.25 miles per Starpoint, if the equivalent nearby Starwood property costs more than one third the Ritz-Carlton award price, it's no longer equivalent — the Ritz-Carlton property is likely the better deal.

The five indispensable Ritz-Carlton properties

After looking at every Ritz-Carlton property in the world, and applying the above mechanical filters, there are five Ritz-Carlton properties that are objectively speaking the correct places to redeem 7-night Hotel + Air packages:

• The Ritz-Carlton Amelia Island. If you want to spend 7 nights on the southern end of Amelia Island, Florida, then you want to stay at this Tier 3 Ritz-Carlton property.
• The Ritz-Carlton Key Biscayne, Miami. If you want to stay in Key Biscayne, you want to stay at this Tier 5 Ritz-Carlton property.
• The Ritz-Carlton Lodge, Reynolds Plantation. If you like "rustic elegance" and "Atlanta city dwellers," you'll love this Tier 3 Ritz-Carlton property.
• Al Bustan Palace, A Ritz-Carlton Hotel. Beautiful Al Bustan, Oman, features just one chain hotel, this Tier 5 Ritz-Carlton property.
• The Ritz-Carlton, St. Thomas. Located on the eastern tip of the US Virgin Island of St. Thomas, this Tier 5 Ritz-Carlton property is your only option if you want to catch the sun rising in the East over St. John (note: I have no idea if the sun actually rises over St. John).

The best of the rest

If you're willing to get a slightly worse value for your Starpoints, there are a few more Tier 1, 2, and 4 Ritz-Carlton properties without nearby equivalents:

In the US and Canada:

• Half Moon Bay, Tier 4;
• Laguna Niguel, Tier 4;
• Lake Tahoe, Tier 4;
• Orlando, Tier 2;
• Georgetown, Washington, D.C., Tier 4.

Internationally:

• Jakarta, Mega Kuningan, Tier 1 (Nearby Le Meridien Jakarta costs 10,000 Starpoints per night, making it roughly equivalent);
• Okinawa, Tier 4;
• Bahrain, Tier 2 (Nearby Westin Bahrain City Center costs 25,000 Starpoints per night, making the The Ritz-Carlton, Bahrain Hotel & Spa strictly superior);
• Riyadh, Tier 1;
• Barcelona, Tier 4 (Nearby W Barcelona costs 25,000 Starpoints per night, making the Hotel Arts Barcelona strictly superior).

What did I miss?

I don't have any monopoly on the truth, I just have an internet connection and a pirated copy of Excel. So if you have strong feelings about a Ritz-Carlton property I didn't include here, take a gander at my spreadsheet and tell me what I missed.

Chase Sapphire Preferred trip delay insurance for authorized users

When I periodically trash the Chase Sapphire Preferred as inferior to the Chase Ink Plus (because of its better bonused earning categories) and the Chase Freedom (because of its better earning and lower annual fee) readers invariably come back at me with the Sapphire Preferred's supposedly superior trip delay and car rental insurance benefits.

What does insurance cover?

With respect to rental car insurance, and any other insurance policy, it's important to understand what the policies do and do not cover. Credit card insurance policies, whether "primary" like the Sapphire Preferred or "secondary" like virtually every other credit card, do not cover personal liability, so if you don't have another car insurance policy you'll need to buy one from the rental car agency anyway, and if you do have another car insurance policy you'll still need to make a claim, thereby "revealing" the accident and subjecting yourself to higher future rates, if your car insurance company works like that.

In other words, the supposed advantage of "primary" rental car insurance applies exclusively to situations where you run into a tree or snowbank or something.

That happens!

My dad once backed a rental car into a tree. But it's a silly thing to claim is worth paying a $95 annual fee for, let alone foregoing a more lucrative credit card like the Chase Freedom.

As I explained shortly after my Labor Day itinerary was delayed, trip delay insurance doesn't cover the consequences of your delayed flights — it only covers the costs. That's better than nothing, but what it's worth depends on how much value you get out of the coverage. Since my trip delay insurance claim has now been paid, I can finally shed some additional light on that.

Who is covered by Chase Sapphire Preferred trip delay insurance? It's complicated.

Chase Sapphire Preferred trip delay insurance covers the cardholder, the cardholder’s spouse or domestic partner, and dependent children under age 22.

Importantly, authorized users count as cardholders for the purposes of Sapphire Preferred trip delay insurance.

However, coverage eligibility is not transitive.

Consider two almost-identical situations:

1. Primary cardholder Alice buys tickets home from college for her dependent son Bob and his domestic partner Carol. Bob and Carol's flight is delayed, requiring an overnight stay. Since Bob is Alice's dependent child, his trip delay is covered. But since Carol is not a cardholder, cardholder's spouse or domestic partner, or a cardholder's dependent child under age 22, Carol's trip delay is not covered.
2. Primary cardholder Alice makes Bob an authorized user, and Bob books tickets home from college for himself and his domestic partner Carol. In this case, Bob is a cardholder and Carol is the domestic partner of a cardholder, so both of their trip delays are covered by Sapphire Preferred trip delay insurance.

Like I said, it's complicated.

One possible takeaway is that if you have a Chase Sapphire Preferred card, you can make all your friends and family authorized users and have them pay you back for flights they book with the card. You get the points, they get the trip delay insurance. Whether that's worth doing or not is up to you.

What documents are required for a trip delay insurance claim?

To file a trip delay insurance claim, you need to provide documents verifying 4 broad categories of information:

• Proof of purchase (1). You must prove that you paid for the original ticket with a Chase Sapphire Preferred card. You'll need to upload the receipt for your ticket, showing the ticket was paid for with a Sapphire Preferred card and the credit card statement the purchase originally appeared on.
• Proof of purchase (2). You must also provide receipts for the purchases you're making the trip delay insurance claim against. That means hotel receipts, meal receipts, cab receipts, and receipts for any other covered "reasonable additional expenses incurred for meals, lodging, toiletries, medication, and other personal use items due to the covered delay."
• Proof of eligibility. You must prove that you are either the primary or authorized user on a Sapphire Preferred card.
• Proof of relationship. If you are filing a claim for the itinerary of a passenger who isn't a primary or authorized user on a Sapphire Preferred card, you must prove that person is a covered individual as described above.

What did I submit to get my claim approved?

The best way I can think of to illustrate this process is to list the 11 files I had to upload to get my claim approved (I uploaded all these documents as .pdf files):

1. original itinerary. The e-mail from United listing my original flights.
2. delayed itinerary. The e-mail from United showing my updated flights after the mechanical delay forced an overnight in Denver.
3. credit card receipt. The credit card statement showing the original purchase of the ticket.
4. MSO-IAD MSO-DCA boarding passes. The original and reprinted boarding passes from before and after the mechanical delay caused us to be rebooked.
5. MSO-supper. The e-mail from Uber showing the amount paid for our car from the airport to the restaurant where we ate dinner.
6. supper-MSO. The e-mail from Uber showing the amount paid for the trip back to the airport.
7. meals. Scanned images of the credit card receipts for all our meals after the delay was announced.
8. hotel receipt. The folio from the Hyatt House Denver Airport where we spent the night.
9. united flight delay letter. The letter from United giving the reason for our delay and restating our original itinerary and the flights we ultimately took (see how to request your own flight delay letter here).
10. verification of authorized user. A scan of the back of my authorized user card.
11. verification of relationship. A lease co-signed by my partner and I.

Where the value is hiding

Now that you've read this post, you know infinitely more about this process than I knew when I went into it. That means it probably won't take you a full month to get your trip delay insurance claim approved. But I want to dig into how much value there is in trip delay insurance, and where it is.

• Meals and booze. When a trip is significantly delayed, airlines will sometimes offer airport funny money that can be used for meals at participating restaurants. Those vouchers exclude alcohol, and are normally in the single-entree range of $5-15. On the other hand, as explained to me, Chase's trip delay insurance provider will cover meals up to $49.99 without an itemized receipt (I've seen mixed reports of whether alcohol was reimbursed on itemized receipts).
• Hotels. Likewise, when itineraries are delayed overnight, airlines will often accommodate customers at contract rates at nearby hotels. Those rates typically don't earn elite-qualifying nights or points. On the other hand, if you book your own hotel room as soon as you find out your flight is delayed, you get to book at the chain of your choice, maximizing the value of any current promotions while earning elite-qualifying stays and nights.
• Miscellaneous expenses. There's no better time to buy toothpaste, a fancy new electric toothbrush, or any other expensive toiletries than during a covered trip delay!

Conclusion: if you are willing to pay for trip delay insurance, you have to be willing to take advantage of it

Each purchased ticket during a trip delay is covered for up to $500 by Sapphire Preferred trip delay insurance. If you're holding onto a Sapphire Preferred card, instead of product changing it to a Freedom or Freedom Unlimited, then when an eligible trip delay occurs you need to be ready to get your money's worth. That means booking hotels, buying toiletries, and eating meals that aren't just expensive, but worthwhile.

In other words, if you use your trip delay insurance claim to eat at the airport Qdoba and stay at the airport Ramada, you're paying $95 per year for what United will give you for free.

In which the new Walmart POS software briefly messes with my game

I don't keep track, but if I had to guess, I'd say I swipe cards through point-of-sale terminals around 50-100 times at Walmart store locations every month. That doesn't make me an expert, by any means, but it does give me a lot of individual datapoints to work with. And last week, I found that my swipes were being rejected more or less consistently.

At the same time, I noticed that the point-of-sale software on the customer-facing terminal had been slightly updated, with a different arrangement of the icons and slightly different background color.

I have no idea if the two were connected, but I figured out the solution my problem, so if any readers are running into the same roadblock, I hope this helps.

My old swipe: slow and deliberate

When you deal with a lot of different point-of-sale systems, you develop a certain habit of swiping cards. Mine was not too fast, not too slow, but just the right speed while making sure the card was flush against the swiping surface.

But last week, my old swipe started failing over and over again, with a customer-facing message of "card read error."

My new swipe: greased lighting

After running into this problem at multiple store locations running the new point-of-sale software, I tried something completely different: I tried swiping a card through as fast as I could. Uncomfortably fast. Dangerously fast.

And it worked. The same machines that were rejected my careful, deliberate swipes started eating up my lightning-fast swipes.

Conclusion

If you haven't run into this "card read error" problem, then you're in luck: you don't have to change anything. But if you have been experiencing this problem and been frustrated, or even scared that you got a batch of bad cards or ran into a sudden change in policy, hopefully this will set your mind at ease and get you up and running again.

On thought leadership

As regular readers know, I'm a podcast fanatic. The only thing better than being able to conveniently manufacture spend is being able to listen to great audio content while you do.

One podcast I've given a few chances to, but haven't yet been blown away by, is the Ezra Klein Show. Klein is a great interviewer but has the absolute worst taste in guests to have on the show, which makes most of the interviews ultimately boring unless you're personally interested in the area the guest specializes in.

Back on April 19, 2016, Klein interviewed Ben Thompson on "how to make it in media in 2016." Well heck, I'm trying to make it in media in 2016! So I thought I'd give it a listen.

If you don't know who he is (I didn't), Ben Thompson is the motive force behind Stratechery.

Ben Thompson is a Thought Leader in Technology

About halfway through the Ezra Klein interview, Thompson begins talking about what makes people willing to make a site a "destination," and how to build an audience willing to sign up for subscriptions to get even more content (Thompson seems to have the same model I do, providing lots of free content as well as subscribers-only access to his inner-most musings).

Thompson's theory is that when you have a single, internally consistent vision of the topic you write about, it makes it easy to fit new information into your worldview, allowing you to generate "fresh" content based on the news without taking the time or effort to actually examine the facts on their own terms.

Listening to this interview, I immediately recognized the genre he was talking about, because travel hacking has its own Thought Leader, right in our very midst.

Gary Leff knows one big, stupid thing

When you visit View from the Wing, you are immediately informed that you're in the presence of a Thought Leader In Travel. And after listening to Ben Thompson cooly describe the anatomy of the Thought Leader, it's obvious what Gary Leff's single, internally consistent vision of the loyalty industry is: loyalty programs are the single greatest invention in the history of marketing, and travel companies tinker with them at their peril.

There are many reasons this is stupid, and I encourage you to come up with your own.

But the lowest common denominator explanation for why this is an incorrect world view to drive thousands of words per week is this: if loyalty programs can, through public signaling to one another, devalue more or less simultaneously, then all the programs can individually and jointly spend less on marketing expenses without ceding a marketing advantage to any other program.

And, amazingly, this is precisely the pattern we see in the real world, where the rest of us live.

I know a bunch of small, true things

Clearly, I'm not a Thought Leader in the terms Ben Thompson described. I don't have a single overarching philosophy, and I don't try to cram every new piece of information into my preconceptions. Instead, I know a handful of small, true things. For example:

• Compare every earning choice you make to cash, since you can spend cash on anything;
• Statement credits are worth (much) less than cash;
• Price compression makes more convenient, more comfortable flights more affordable;
• It's possible to beat the house, but only through math, not through magic;
• Pay as little as possible for the trips you actually want to take;
• Every deal dies eventually;
• There will always be more deals.

What are Thought Leaders good for?

This post isn't meant to be an attack exclusively on Gary Leff (although, of course, also on him), but more generally to call into question the species of Thought Leader as a whole.

What is the point of using an overarching philosophy to interpret facts when you have the actual facts in front of you?

On the one hand, Gary Leff really is invited to attend, and even host(!), awards galas and loyalty conferences.

On the other hand, his insistence that the loyalty programs are sabotaging their own success through devaluations and a focus on revenue seems to fall on completely deaf ears, possibly because a graphomaniac internet enthusiast has no influence over the business practices of massive global enterprises.

Conclusion

Looking around today, it's clear that the future of the internet belongs to the Thought Leaders. Mr. Money Moustache is a Thought Leader in Financial Independence. Meb Faber is a Thought Leader in Value and Momentum Investing. Tyler Cowen is a Thought Leader in Condescension.

I imagine there are lots of reasons why people find these Thought Leaders comforting. They repeat the same nostrums over and over again, building a cushion of the familiar, the wise, the sensible. And who doesn't want to live in a familiar, wise, and sensible world?

But there is an alternative to Thought Leadership: taking the world on its own terms. Understanding that loyalty programs will continue to devalue, with or without notice. Understanding that passive, low-cost investing is the only method yet devised that will secure as much of the market's return as possible. Understanding that Tyler Cowen is a twit.

A big, false theory may be comforting, but a small, true fact is even better.

I wonder what's going on with all these Hyatt promotions

[9/29/16: edited to include base and bonus points earned on spend, hat tip to commenter VM.]

I just updated my Hotel Promotions page with yet another Hyatt promotion, meaning there are currently 4 concurrently running Hyatt promotions (although two are only available to co-branded credit cardholders).

The new Hyatt Regency promotion is pretty good

If you have a Chase Hyatt co-branded credit card and register by the registration deadline (turn off your adblocker if you don't see the credit card field) of October 31, 2016, and spend $500 in "net purchases" on the card at Hyatt Regency properties before December 31, 2016, you'll receive a $50 statement credit.

This promotion belongs to a category of promotion I typically blow off. For example, American Express periodically has Offers For You promotions for discounts off certain purchases at Hilton brand properties.

I'm normally not interested in these promotions because my goal is to pay as little cash as possible for my travel, which means redeeming miles and points I've already purchased at a steep discount to their ultimate value. Paying for travel with a credit card, which I have to pay off with cash, is an admission of failure to a travel hacker.

There are two big differences with this promotion:

• The $500 purchase requirement doesn't need to be a single transaction. That means the cash co-pays for Hyatt Regency Points + Cash stays will count towards the $500 threshold.
• 3 Hyatt Gold Passport points per dollar spent at Hyatt properties with the Chase Hyatt credit card is competitive with any other rewards-earning credit card.

That doesn't mean I'm going to "chase" this promotion, but it does mean I'm not writing it off as completely irrelevant. I'll take a look at my existing and possible Hyatt Regency reservations, and if the cash components add up to $500, I'll pay for them with my Chase Hyatt credit card. If they don't, I'll pay with a discounted Hyatt gift card instead.

This is yet another stackable Hyatt promotion

With the addition of this Hyatt Regency promotion, it's now theoretically possible to stack all the current Hyatt promotions by booking, before October 31, 2016, 10 non-consecutive Category 2 Points + Cash stays at Hyatt Regency properties through the Hyatt mobile app.

You would pay 40,000 Hyatt Gold Passport points and $550 in co-pays, plus tax, which I'll hand-wavingly assume comes to 10%, for a total of $605. I'll also assume you select the 1,000 Hyatt Gold Passport-point Diamond amenity during each stay. You would earn:

• a $50 statement credit to your Chase Hyatt credit card account;
• a 4,000-point rebate to your Hyatt Gold Passport account;
• 10,000 Hyatt Gold Passport points in Diamond amenities;
• 15,000 Hyatt Gold Passport points in "More Points. More Play." promotion points;
• 1,815 Hyatt Gold Passport points for your credit card spend;
• 5,000 Hyatt Gold Passport points for booking 10 stays through the mobile app (see Michael's comment on receiving the promotion multiple times);
• [edit: plus 3,575 Hyatt Gold Passport points earned on the $550 in cash co-pays.]

Your total out of pocket expense for 10 elite-qualifying stay credits would therefore be 4,185 [edit: 610] Hyatt Gold Passport points and $555.

Now, that's not a great argument for mattress running, and it's not intended to be. But I do think it's a pretty good argument for staying at a Hyatt Regency, or booking a Points + Cash stay instead of a points-only stay, if you're able to hit the relevant promotion thresholds (10 eligible nights and $500 in spend) at Hyatt Regency properties, and thereby re-qualify for Diamond status.

So what's going on with all these promotions?

To state the obvious, it is not usual for a loyalty program to be running 4 stackable promotions simultaneously. So what's going on?

I figure there are two obvious explanations. First, Hyatt might be trying to get their membership numbers and revenue up in the fourth quarter either to ward off a takeover offer after Starwood's acquisition by Marriott, or to fetch as high a price as possible in the inevitable merger.

Second, Hyatt might be trying to retain all the new Diamond members they acquired poaching from Starwood at the end of last year and beginning of this year. I'm someone who never would have considered staying at Hyatt properties as a non-elite member, but as a Diamond I started booking towards Hyatt whenever possible. And not just that, I also book Points + Cash stays, which I would never do at a chain with less valuable points, like Hilton, which I'm eager to burn.

So it may be that this aggressive push for paid and Points + Cash stays in the end of the year is an effort by Hyatt to retain their new Diamond members, who have turned out to be more lucrative than they expected when they began matching Diamond status back in November and December of 2015.