Read fine print on air rewards
American Express received a lot of negative publicity when its arrangement with Canadian Airlines was abruptly terminated earlier this year with virtually no warning to cardholders. The finger-pointing over who was responsible is still going on. And Amex was stung by the widespread adverse reaction, not to mention the legal suits.
Since then, they’ve been scrambling to find a new airline partner. Now they have one and they trumpeted the news in a special flyer that promotes all the advantages that the Canada 3000 deal brings to the table: no black-out dates, no minimum stay requirement, no seat limitations on flights.
What they don’t trumpet, of course, are the negatives. Let me tell you about them, since I was among the first to call to take advantage of this offer.
I booked two seats for my wife and me from Toronto to Fort Myers, Florida and return. By the time all was said and done, I was initially told the two “free” seats would cost me a total of $339.42. To put this in perspective, Canada 3000’s quoted price for one return seat on the days we are flying was $295. So we ended up with a “rewards” price that was more than e quoted cost of one seat.
Of course, as anyone who has ever flown Canada 3000 knows, the posted rates bear little relationship to what you actually pay. The airline then adds on “taxes”. These are really a whole range of charges. Some are not taxes at all and others could only be called such by a broad stretch of the imagination.
Two examples given to me by an Amex supervisor handling my complaint: fuel surcharges and airport docking fees. Amex has gone along with this approach in its rewards program. It’s in the fine print if you can squint hard enough. The “taxes” added up to $109.71 per ticket, I was told. By way of comparison, Aeroplan charges taxes of $8.84 per ticket for the same flight.
That’s not the end of it. With Aeroplan, you can cancel your bookings, or change them. For a fee of $50, you can also put the points back into your account. Amex’s policy is that once you have booked, the ticket is non-transferable, non-refundable, and cannot be altered. But they do offer trip cancellation and interruption insurance. The rate in our case, based on age, was quoted at $60 a ticket. Since I wasn’t about to put 45,000 points at risk (the special introductory rate being offered), I took it. That brought the quoted total cost to $339 and change.
I wrote to the president of American Express Canada to advise him of my dissatisfaction. I received a phone call from a public relations person who went on about how wonderful the program was – no blackouts and all that. Fine, I said. But to hit your top customers with charges of that magnitude on reward tickets is simply not acceptable. Tell your marketing department. When it became obvious I wasn’t about to roll over, he gave up.
A week later he called back, full of apologies. He hadn’t really understood my argument, he said, despite the fact my letter was crystal clear to the point of doing the math for them. But now he had to admit that there was a problem. As a result, they were reducing the “taxes” to $92.77 per ticket. This, he said, was because I should not have been charged GST. Oh? That’s a tax I would have accepted as legitimate.
Also, I was overcharged for the travel insurance. My wife’s rate should have been $42, since she was travelling on a 50 per cent off promotion. My original point was that Amex should have the same flexibility as Aeroplan and forget about making money from the insurance side, especially given the high “taxes”. But anyway, they knocked off $18. So the total amount I paid was reduced to $287.54. Still too much, but proof that it sometimes pays to make a fuss.
He also said something I found interesting. Air Miles has the same problem, he claimed (I don’t know because I have never claimed any Air Miles points). The reason, he said, is that the government gives favourable tax treatment to Aeroplan, as Air Canada’s in-house program. That’s why the others have to load on all these extra charges. Sounds somewhat far-fetched to me, but if this is true, it smacks as unfair competition. Amex and Air Miles might want to make a case to the Competition Bureau.
In the meantime, if you want to use your Amex points for Canada 3000 flights, be prepared to shell out. Oh yes, there is one other point. Aeroplan charges 25,000 points for flights between Canada and Florida, hospitality class. The Amex/Canada 3000 regular rate is 30,000 points. And say what you will about Air Canada. Given a choice between them and Canada 3000, AC wins every time. They just didn’t happen to have any flights into Fort Meyers on the days we wanted to go.
Adapted from the Internet Wealth Builder, published by Gordon Pape. For membership information: http://gordonpape.fifty-plus.net