The Engineer Who converted 12,100 Cups Of Pudding to 1.25 Million Air Miles
todayifoundout.com
todayifoundout.com
Three years ago, there was a LivingSocial deal with a headline to the effect of "$10,000 for one night in the SF Fairmont Penthouse Suite." In a moment of "who would buy this?!," I of course read the whole thing, and the offering was impressive -- it included monogrammed Tiffany table settings for 20 or something, and the suite had a helipad accessible via bookcase-door -- but nothing I'd ever spend my money on.
At the bottom of the blurb, LS mentioned an alternative offer -- "$2000 for a night in the Presidential Suite." In reading that, the last bullet point read "plus Fairmont Platinum Status for Life." Now that, I thought, might actually be a good deal.
Fairmont Platinum gives you a night free, 10 nights of suite upgrades, 10 nights of room upgrades, $100 in spa/dining certificates, and a few other things each year. I'm a young guy, so the math is fairly compelling when you add this up over a lifetime. So I redeemed the deal and posted the opportunity on the frequent flyer forums for Fairmont, where many of Fairmont's best customers lurk, and they quickly snapped up dozens of the deals, leading to Fairmont/LivingSocial putting a freeze on it.
Apparently the "for life" bit had been an error, and they meant "for one year." But now they had some of their best customers, people who often earned their Platinum status anyway, encouraging them to honor it. After taking a weekend to think it over, Fairmont decided to honor the deal, and I've been a Fairmont Plat ever since.
I used the actual night in the suite to throw a surprise engagement party, and it was pretty amazing. Since then, my wife and I have stayed in suites on the cheap in Sonoma, Boston, Chicago, Seattle, and we actually spent 5 nights in an oceanfront suite on Hawaii for $129/night (the AAA rate for the suite was $1200/night). And we get lots of nice perks along the way.
Like I said, it's no 4MM miles for $4000, but for doing next to no work, it'll be a nice perk that my family and I will hopefully take advantage of for decades to come.
They also realize that one negative customer experience in their line of work gets retold over, and over, and over. Taunting customers with "go ahead, sue us!" would be a P/R disaster of even larger magnitude if it got public. Didn't we just see an HN discussion on how rage spreads faster than good news?
It was cheaper for them to honor the deal in the long run. Upgrades are one of the cheapest things hotels can give away, when you think about it.
But the headlines.
"Sweet Suite Deal Means Suits Dealt Suit"
"President in Suit Sued over Presidential Suite"
&c
COUNCIL CALLS
IN COUNSELLORS
TO COUNSEL
COUNCILLORS
There are many other amusing examples of their editorial finesse out there for those who care to look.
Unfortunately the "secret door" in the library was locked so it was not possible to take a look at the helipad.
$2k for lifetime membership to the Fairmont Platinum club is a good deal, nice one!
But don't be surprised Fairmont will drop this 'lifetime' deal eventually. AA did that with the Unlimited Miles First Class group - http://articles.latimes.com/2012/may/05/business/la-fi-0506-...
So take advantage of it every year as much as you can!
Meanwhile, for years, AA has offered lifetime Gold and Platinum frequent flyer status for those who have accumulated one and two million miles, respectively.
It used to be an unpublished thing, but as of recently AA started prominently displaying it as a benefit you can attain.
http://valleywag.gawker.com/livingsocial-is-all-kinds-of-fuc...
Looks like you already got your money's worth and then some so enjoy it. Hopefully it lasts for a long long time.
Out of curiosity, which forum?
Some people (very cleverly) did the math, and ordered ridiculous numbers of dollar coins on their airline-affiliated credit cards. When the dollar coins would arrive, the buyers would take them back to their bank, depositing the money in their account.
In other words, these people were getting thousands of dollars' worth of frequent flyer miles each week, for absolutely free. The Mint found out about this when banks started sending them enormous numbers of dollar coins, unopened, for storage, and that a very small number of customers were ordering a very large number of dollar coins.
The full (and very entertaining) story was done by NPR's Planet Money podcast:
http://www.npr.org/blogs/money/2011/07/13/137795995/how-freq...
Effectively, this works around the usual restrictions on using credit cards for cash advances. Even if you just had a standard cash-back credit card (1-2% on purchases), you could make a huge reward without actually spending any money, and on top of that you'd be able to get a month's worth of cash advance up to your credit limit; you could make a significant amount on the float that way.
However, most credit cards have fine print that explicitly excludes the direct purchase of negotiable financial instruments, so they'd have every right to cancel the rewards and charge a cash-advance fee if they found out.
However, to me it is still the best way of getting all those bonus miles when you sign up for a new credit card, without actually spending any money.
Many credit cards give you about 1% bonus (points, miles, whatever) and miles cards give you a mile per dollar spent. 1% of a dollar is 1 cent. So this math makes sense.
He got 1000 miles for 2.50. If each mile is worth 1 cent, that's a 4x benefit. Great, but not amazing. He got a tax deduction too, so maybe it was a 5-6x benefit. Sounds like a bit of a hassle, but the other perks sound great.
Anyway, the article should say $15,000 worth of miles. The airline might sell them to you for $150,000 but that's why you should never buy miles unless there's a tiny gap in what you have/need for a flight. For example, United will sell you 50,000 miles for $1881.25 which you can then redeem for a ~$500 ticket and not earn miles on that flight.
He now has 4M miles, by taking advantage of the status.
I'm sure he makes lots of good things happen by paying for them with his copious of miles, but it's not from the gold status :)
https://www.aa.com/i18n/AAdvantage/eliteStatus/elite-benefit...
They reduce or eliminate the fees for certain things like award booking, and same-day flight changes. Changing tickets still also depends on the fare class of the ticket. If you buy a low-end restricted fare, you'll pay heavily to change it. They aren't magically turning your tickets into full fares.
Depending on where you work, a great benefit of status is that you can expense economy tickets (Y/B fare) but have a near 100% chance of upgrading.
Personally, I've never seen a flight where redemption matched the article at around $0.10/mi, e.g. a $5000 ticket for 50,000 miles. Let me know when you see one and I'll book a ticket and we can discuss this over coffee.
If you are flying intercontinental, to Alaska/Hawaii, or anything but economy the value can be much, much higher.
If you only fly economy flights within the continental US, you're probably paying peanuts for flying anyway.
A couple of years ago when Germany got the Euro currency there were put a few regulations in place for the banks. If you came to them with 100 Deutsch Marks in your hands (old currency) they had to convert the 100 Deutsch Marks to euro by using the ratio 1:1.95583. The banks had to round up if needed. So in theory you could give them 1 Pfennig ( = 1/100 of 1 Deutsch Mark) and demand that they exchange that to Euro. If you do the math 1 Pfennig ~= 0.5 Euro Cent. Since the banks had to round up you ended up with 1 Euro Cent. That is a 100% return of investment. Now in theory you would have to give your bank 50 million 1 Pfennig coins (separately) and you would have gotten back 100 million euro cents = 1 million euros. But you would have only invested only 0.5 million euros. And so on…
I am not sure if this is an urban legend. It was told to me when I was a kid.
you would have to give your bank 50 million 1 Pfennig coins (*separately*)[1] http://images2.wikia.nocookie.net/__cb20120914205337/seinfel...
The picture is of Newman drinking a soda so he can get the deposit on it.
I was very surprised one time on vacation in Oregon when there was a can/bottle recycling machine right at the entrance of a grocery store. I walked back to it with an empty can from the car I had and fed the can into the machine. I was a little disappointed that all it gave me was a receipt to use toward my next purchase at that store. But if it was a store I went to regularly, it would totally make sense.
Because if you gave them 2 Pfenning that would still be 0.01€
The reason? The scales weren't terribly accurate and rounded down. Each mushroom came to 0.48 cents, which because they rounded down came to nothing. He got a bag of free mushrooms. And a lifetime ban from the store.
http://www.spiegel.de/wirtschaft/euro-umstellung-banken-verl...
They are talking about exchanging coins. Not being able to exchange coins would also mean the loss of a lot of money...
The article mentions that the banks were planning an exchange fee.
Here's a reference. No idea if some particular bank is vulnerable to it, but it's a fun read.
http://blog.acrossecurity.com/2012/01/is-your-online-bank-vu...
And reading that blog doesn't equal 1.25 million miles. I'd like to know what strategies you used.
We had a basement full of a year's supply of cheerio's, because my parents calculated the amount of cereal they had to buy was still significantly cheaper than the ticket would have cost, at that point, for our yearly visit to the granparents in florida.
It's only sort of the same thing...
And they probably sort of deliver, I bet they put fiber and 'mouth feel' agents in it that make it have a lot less calories (there are some hand wavy arguments against food science products, but I bet for lots of people that slight risk is a good trade off for the calories).
Credit card companies would offer a few hundred air miles when he signed up. He would then simply cancel the cards a month later. He said that often when he called to cancel cards, he would be offered additional air miles incentives to prevent him from cancelling. He would keep the card an additional month when that happened.
Anyway this is a fantastic story of a man gaming the system. In the Quora thread I've linked to there are some other fantastic examples. Particularly the ATM bug! I'd heard of that one before but just in case you hadn't...
Cash points have a feature whereby if you don't take the dispensed cash within a time limit, they take the money back, and re-credit your account. However some affected ATMs did not count the cash on the way back in. Now the exploit should be obvious - take the majority of the cash carefully and allow the ATM to swallow the rest. The cash you've taken is yours and the money you were supposed to get goes back into your account. No doubt it would be easy to track down customer's who had been involved in this exploit, but it's a fun story nevertheless.
[1] http://www.quora.com/Gaming-the-System/What-are-the-best-exa...
Airport taxes in US must be quite low, relatively.
In college I racked up 135k United miles through credit cards and then used them for a first class ticket to Thailand and Singapore after graduation. The taxes came out to less than $100.
Not to mention the amount of noise and air pollution planes in general generate.
The tax is simply an offset to this.
The problem here is prices are not advertised tax-in.
Someone was willing to cart my body and luggage 24 hours around the planet for $400. Amazing, really.
Hoover's UK division tried to clear excess stock by offering free air tickets for purchases of over £100. The promotion was so popular that Hoover was unable to supply the tickets to all the participants, resulting in years of legal actions.
Hoover UK eventually admitted that the exercise had cost it £50 million. Three executive directors were dismissed and the business was sold to an Italian company.
[1] http://en.wikipedia.org/wiki/Hoover_free_flights_promotion
I clearly remember one company actively monitoring points collection to identify outliers (i.e. people who went through the trash collecting barcodes for points, etc..) to ensure they weren't becoming unprofitable program members. If the person crossed that threshold, the program would take actions to slow down or limit their redemption (i.e. limit the number of points redemptions which one account can do in one 24 hour period, etc...). They usually wouldn't kick the person out of the program as that action had the potential to generate bad press, and it was usually relatively easy for the person to just sign up again using different information. Limits, on the other hand, actually limited or prevented the "abuse" activity without hurting the "good" program members.
BTW, my favorite part from the article:
David approached the local Salvation Army with an offer; if they gave him a bunch of volunteers to peel off all the bar codes on his pudding, he’d donate the pudding to them. But here’s the beautiful part, doing this counted as a considerable charitable donation, which let David claim just over $800 back in tax deductions at the end of they year.
[0]: http://www.telegraph.co.uk/finance/2773265/Billionaire-who-b...
The real benefit is the hotels, biz class, upgrades, amazon GCs, and more.
So for a few months, we would buy boxes of cheerios at walmart for <$3 and then go see a movie (~$8) and eat our cheerios out of the box in the theatre.
I've read another account that was written far better and with far more detail.
In fact this article just seems like a summary of the first article, skipping over details like he didn't first go with the pudding.
There must have been a lot of times during this that he though, "this is never actually going to work".
Fair play to him though.
At least this first part seems close to most definitions of hacking I know.
Anyway the intent was more sarcasm than anything, but I guess I'll take the karma hit.
Didn't you read the article? They built a salvation army store out of the packaging.
I can't buy a stack of cars and then donate a ashtray to the Salvation Army and claim the car back?
If you want to buy a stack of cars, keep the invoice papers and donate the car feel free
Or that he went to all that effort to keep something of zero value.
That he could extract additional value through the work of removing the bar code does not implicitly reduce the value of the pudding itself.
It is not unusual for it to be possible to extract more value by splitting up a product and selling or taking advantage of parts separately. A lot of businesses are even built on buying lots and separating them to extract value as people are often willing to pay over the odds for a smaller part, or parts of the lots may have been undervalued (as clearly was the case here).
While this isn't probably as egregious as manufactured spending for credit card points (to later be converted into airline miles), his family (and others like him) are taking free seats and upgrades from frequent fliers who have actually earned their miles from BIS (butt-in-seat) flying over the years. And they're not even generating any useful amount of revenue for the airline.
Honestly not sure that anyone at AA thought this one through.
First of all, the fact that this promotion earned miles which could qualify for some type of frequent-flyer status (elite-qualifying miles, or EQMs, to use the jargon) was basically the dumbest thing ever. And EQMs these days are difficult to come by through means other than actually buying a ticket and getting on the plane; typically, only promotions which will actually earn money for the airline can earn EQMs, and even those will have strict caps on them (I have a US Airways club membership and credit card, for example, and IIRC I can't pick up more than about 15k EQMs/year from the combination of them).
That by itself gives a lot more flexibility in dealing with "abuse" of promotions, since non-qualifying miles are only useful to be redeemed for travel. And there are endless ways to cap that:
* Blackout dates to avoid too many "free" seats during peak paid-travel times of the year.
* Dynamic fare-bucket management, allowing the number of redeemable seats on any given flight to be adjusted up or down on the fly, along with confusing schedules for when the mileage-redeemable fare classes open for booking.
* Limiting availability of redeemable seats on alliance partners, making it impractical or impossible to plan longer itineraries as mileage awards.
* Fees for mileage redemption, ranging from simple processing fees up to things like British Airways' stupendous "fuel surcharge" (which can make a "free" business- or first-class ticket cost roughly as much actual cash as a fully-paid economy-class fare).
etc., etc.
And the trend now is toward revenue-based status programs, where qualifying for frequent-flyer status requires not just a minimum number of miles but also a certain minimum number of actual dollars spent, on that specific airline's flights. That eliminates the more lucrative type of mileage-run since low-cost but high-mileage itineraries no longer help with reaching status.
More generally, though, I think the airlines have moved toward no longer considering "frequent flyers" as important as they once did. Frequent business travelers are relevant, of course, but the strong preference is for the types of folks whose corporate travel department just pays the fare the airline asks for, rather than people who spend hours on travel-search sites trying to find the optimal combo of high mileage/low fare.
The development of the Flagship Lounges (based on revenue generation, as opposed to status) by American is strong proof of your thesis.
Not sure whether AA can match that for the US -- especially depending on the merger -- but they seem to be heading in that direction, certainly.
"actually earned"? For reals?
I really, honestly do not get the various negative posts about this. Promotions like this -- just like "earned" air miles -- are all a battle between providers and consumers to optimize their revenue and to minimize your benefit.
Providers offer deals to get you to buy products (like pudding), with every hope of paying out the absolute minimum in actual benefits. They optimize every aspect of such deals, generally, putting just enough exclusions and annoyances that the actual take is profitably low. If someone on the consumer end is optimizing as well, bully for them.
If there were significantly more inventory available (i.e. status gamers didn't dramatically impact ability to get exit row for disabled passengers who need to get up frequently, tall passengers, etc) these practices would probably be tolerable. As it currently exists, however, its yet another unneeded strain on the system. Hence the explanation below from a poster about severely limited programs and benefits.
That sounds so astonishingly entitled that I don't even know where to begin: If you have a problem with "people like this", complain to the airline or choose a different airline. In this case it is a bit bizarre in that you are demanding greater allowances than other patrons on the jet, and feel put out when "people like this" make it less likely you will get it for free. To feel resentment about this is not rational.
Thankfully the Airlines are moving to a revenue based frequent flier model specifically to discourage this kind of behavior.
So you can actually tell who on the plane got there through apparently undeserved scamming, versus the "legitimate" users? Are you sure about that?
As someone who doesn't game or optimize these sorts of promotions, I have absolutely zero issue with those who do. Honestly, good for them.
If other passengers are high on their priority list, I'm happy to admit I'm wrong and have misjudged the situation. I've not seen much evidence, either traveling or reading through FF sites/blogs, to suggest as much.
Also, there are hundreds of thousands of people who earn their living by helping others "game" the US tax code, and they don't even feel guilty about it. Don't they have any conscience at all? I suppose you'd rather have them executed. I mean, who cares that it's actually legal.
This is predominantly the airline's fault and most blame should be placed on them. At least in this case some good came out of it - the food shelter received some (relatively) free pudding. In the case of the new trend in generating miles (manufactured spending for credit cards) there's an externality that impacts people who don't even travel. Credit card companies are required to determine which persons are using the cards solely to generate points for airline miles, to remove them from the programs and potentially cancel their cards. Drug and grovery stores are now required to have their workers fill out federal money laundering forms on these individuals who purchase large amounts of vanilla reloads or conduct suspicious money transfers. The costs of documenting and preventing these abuses are passed on to the end customers, whether or not they even care about airlines miles or even fly. If you use any major credit card company, you're subsidizing these operations.
If the manufactured spenders put 10% of the effort into productive work that they did into gaming credit card rewards systems, we (and they) would be a lot better off for it. Do they deserve to be punished for it, though? No. Still silly and thoughtless.
They determine which seats get placed in their planes how far apart, and how those seats are allocated. They could easily allocate seats with extra legroom based on height, or make it universal should that be in line with their goals. Instead a little artificial scarcity, and people start buying upgrades.
And now they’ve found that adding promotions focuses their customers rage on other customers (and not the airlines). The whole setup is a win/win for the airlines - and I suspect promotions are here to stay.
These promotions died specifically because of these long tail passengers.