As of today JetBlue TrueBlue points no longer expire, which is pretty big news. The last airline to make a similar move was Delta, which in February 2011 eliminated mileage expiration. Unfortunately for SkyMiles members, they’ve done everything they possibly can to make active miles as valuable as expired ones, so I’m not sure what to make of that. ;)

What’s interesting about JetBlue is that they’re going from having one of the most strict points expiration policies to not having them expire at all. Previously JetBlue points expired after 12 months of “inactivity,” with activity strictly being defined as a JetBlue flight or a purchase with their co-branded American Express credit card. That’s extremely strict, given that most other miles expire after 18-36 months of inactivity, with a much more liberal interpretation of what qualifies as “activity.”

Look, this is obviously good news and a positive move, though to be honest I don’t get why they’re doing this. I think their policy was too strict. I think points shouldn’t have expired within 12 months, and they should have counted partner activity as any activity.

But there’s a cost to loyalty programs of not having points expire, especially for a revenue based frequent flyer program like JetBlue’s, where there are no hoops you have to jump through to redeem points. I assume there’s some serious liability on their books for unredeemed points, and when miles never expire, who knows how many outstanding points are for accounts of people that have since passed.

In the press release their director of loyalty marketing says:

“Customers can still be loyal even if they’re not traveling every year.” says Dave Canty, JetBlue’s director of loyalty marketing. “Loyalty shouldn’t have an expiration date, and neither should your points.”

And while perhaps there’s some truth to it, could the same be said if the points expiration policy was 24 months and included all partner activity? Could you really still consider that person “loyal?”

So let me be clear, this is an extremely positive and customer friendly change. But there’s a cost to providing it, and I would have rather seen new benefits in other places for at least semi-loyal customers (maybe more TrueBlue points per dollar spent on airfare, for example). If they instead changed the policy to 24 months and included more activity, they’d be giving people the best of both worlds, in my opinion. I’d also be willing to bet that soon enough both Delta and JetBlue will introduce mileage expiration policies, or at the very least mileage inactivity policies.

Am I off base? What do you guys think?

  1. June 17th, 2013 at 7:22 pm

    Sanjeev M said,

    The programs are so devalued it doesn’t matter. People can’t use the miles anyway

  2. June 17th, 2013 at 7:59 pm

    Frindle said,

    Wouldn’t mileage inactivity policies basically be re-instituting a mileage expiration?

  3. June 17th, 2013 at 8:01 pm

    lucky said,

    @ Frindle — Correct. This wouldn’t be the first time that has happened in the airline industry… far from it.

  4. June 17th, 2013 at 8:22 pm

    Jonah said,

    I stopped flying Jet Blue a few years ago because _twice_ I got to enough points for 1/2 a ticket and had them all expire. I like flying JetBlue, but they don’t go where I need to go most of the time, so I don’t fly them that often.

    If they re-instate my expired points, maybe I’ll come back.

  5. June 17th, 2013 at 9:32 pm

    Denis said,

    This is good news. I am a TAM customer, and having miles that expire 24 months after accrual (doesn’t matter that the account is active and still earning miles) is really frustrating. And the problem continues with the credit card companies, that also have expiration policies based on date of accrual.
    Brazil is not an easy place to be in the points game.

  6. June 17th, 2013 at 9:39 pm

    DBest said,

    Removing the expiry doesn’t mean that they can’t estimate liability, often with astonishing accuracy. Instead of a recurring level of ‘breakage’ their baseline shifts to x% of unredeemed mileage liability that is almost as predictable.

  7. June 17th, 2013 at 10:00 pm

    Grant Thomas said,

    @Lucky, any use for 100 jetblue miles??

  8. June 17th, 2013 at 11:32 pm

    lucky said,

    @ Grant — Hmmm, not that I can think of.

  9. June 18th, 2013 at 7:06 am

    Seth Miller said,

    Not hard to make the argument you have in the abstract, but I’m not so sure it works that way in the real world. The points in TrueBlue already have a limited and reasonably fixed value. They’re also relatively hard to earn (near impossible compared to Delta) which means that the outstanding balances/liability aren’t that huge.

    I doubt we’ll see the conversion value of the points drop as a result of this change and that’s basically the only way it could be a negative for customers in the real world.

  10. June 18th, 2013 at 7:35 am

    Bgriff said,

    I could see this being a strategic decision for JetBlue. I would bet they have a fair number of customers who don’t fly super often but do like to fly JetBlue on those occasions when they do fly (or who primarily fly a network carrier but fly JetBlue occasionally). Those types of customers would certainly be happier to come back if they know their miles will always be around, especially since while JetBlue’s program doesn’t offer any spectacular uses of points, it also offers pretty easy access to free tickets with a balance of only 5-10K points.

    As for whether making those customers happier actually translates into more revenue at the end of the day, who knows. (JetBlue is already giving those customers more legroom than any other carrier, even if you don’t pay for extra legroom, after all.) But it’s certainly consistent with their “customer-friendly” and “occasional traveler who likes something a little extra” brand.

  11. June 18th, 2013 at 9:23 am

    Anthony said,

    I primarily fly Delta but have had Virgin America and Jet Blue points expire. That experience has made me less likely to book flights on those airlines on the occasion they may have the best schedule / itinerary for a desired flight.

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