Protecting Airline Rewards: Transportation Department Takes Action

Government inquiry seeks to ensure customers receive promised benefits

An inquiry into airline rewards programs at the nation's four largest airlines seeks to protect benefits earned by consumers, according to a statement by the U.S. Department of Transportation.

Transportation Secretary Pete Buttigieg sent letters to American Airlines, Delta Airlines, Southwest Airlines, and United Airlines asking for detailed information about rewards programs offered by those companies.

Buttigieg says that customers expect to receive value for rewards earned and can face real harm when airline rewards programs change.

“Points systems like frequent flyer miles and credit card rewards have become such a meaningful part of our economy that many Americans view their rewards points balances as part of their savings,” said U.S. Transportation Secretary Pete Buttigieg. “These programs bring real value to consumers, with families often counting on airline rewards to fund a vacation or to pay for a trip to visit loved ones. But unlike a traditional savings account, these rewards are controlled by a company that can unilaterally change their value. Our goal is to ensure consumers are getting the value that was promised to them, which means validating that these programs are transparent and fair.”

The DOT's inquiry seeks to ensure that customers earn some value from promised and earned rewards. Specifically, the inquiry asks the airlines for information on issues like dynamic pricing (which can diminish the value of rewards miles), retroactive changes to rewards programs that devalue earned rewards, and extra fees charged for using rewards miles or other benefits.

The move to address airline rewards programs comes after the DOT moved earlier this year to address and reduce junk fees charged by airlines and to ensure customers are compensated when flights are delayed for excessive periods of time or cancelled.

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