Why the maths behind UOB’s latest promotion makes my head hurt

For the festive season, UOB is running a promotion to encourage people to spend overseas on their credit cards. Banks generally earn big margins every time you swipe your card overseas, so it’s not surprising to see them trying to sweeten the deal with giveaways like this.

From 23 November 2016 (yes, I’m late) to 31 January 2017, anyone who spends the foreign currency equivalent of S$300 on their UOB credit card in a single receipt is eligible for one prize token. Online spending does not qualify- only physical, in-person swiping counts.

There are a total of 400,000 prize tokens to claimed during this promotional period.  These prize tokens can be entered on UOB’s promotional site in exchange for a chance to win one of the following prizes

The top prizes sure sound sweet. But if you’ve got your eyes on the miles prizes and are about to splurge on your card overseas, let me explain why I’m a bit uncomfortable about this giveaway.

(1) Are there really 10 million Krisflyer miles up for grabs?

Although UOB slaps a big “10 million Krisflyer miles to be won” sticker on this, I have my doubts that the 10 million figure is anywhere near the actual figure that will be won. Why? Look at column 3.

Column 3 describes the theoretical maximum number of prizes of each category that can be won each day. This promotion runs from 23 Nov 16 to 31 Jan 17, both dates inclusive. That’s a total of 70 days.

On each day, a maximum amount of 260,000 miles can be won based on the 43 Krisflyer miles prizes available (1 prize of 60K miles, 1 prize of 43K miles, 1 prize of 39K miles…..20 prizes of 1K miles). So 70 days into 260K miles per day gives a figure of 18.2 million miles, potentially up for grabs. So far so good, that’s well in excess of 10 million. But if that’s the case, why does UOB advertise 10 million instead of 18? Here’s what I’m thinking-

(a) 10 million miles might be the expected number of miles to be given away (based on probability) – which I doubt because even if we assume that UOB can buy miles from SQ at 1 cent each, you’re talking about $100,000 worth of miles. That seems like a very expensive promotion if you factor in a 55% win rate (10/18.2)

(b) 10 million miles is the correct theoretical maximum (and that implies my 18.2 million figure is wrong because of some other factor I’m unaware of so we’ll ignore it from now on) because not all gifts will be won. I was trying to figure out why there was a discrepancy between what it says here

and what it says in the T&C

I think the reason for the discrepancy is that there are 500,000 sure win prizes + 3,010 Krisflyer miles prizes to be won (43 prizes a day * 70 days), but only 400,000 tokens, meaning that in theory 10 million miles could be won but in reality the number depends on the odds of how many of those 3,010 tokens are within the 400,000 claimed.

In any case, it’s safe to say that UOB has carefully set its probabilities behind the scene and the odds aren’t in your favour. Which brings me to my next point…

(2) The probabilities are difficult to pin down

Here’s how the T&C describe the prize card draw

Prizes are awarded for each Prize Card based on a random probability-based prize generator at the Prize Card Website. Where there is any breakdown or malfunction of the random probability-based prize generator at the Prize Card Website, the Bank shall have the right to allocate the Prizes for each Prize Card on a random probability basis

(emphasis mine)

The problem is that we don’t know what the probabilities assigned to each prize are.

When I first saw this I thought- ok, there are 2,199 different prizes to be won each day (sum of column 3) so my odds of winning 60,000 Krisflyer miles are 1 in 2,199.

That’s not correct. First, even if number of prizes is related to probability, there are an “unlimited” number of Kaligo $35 vouchers and UOI insurance discounts to be won (see next point) that mess up your calculations.

Second, it’s not correct to say that the maximum number of prizes in each category/ total number of prizes= probability of winning because they could be two completely unrelated numbers.

This gets simpler with an example. Let’s look at a 3 prize scenario with the number of prizes and probability of winning in the brackets)

(1) 60,00 Krisflyer miles (1 prize, 5%)
(2)  Wallet  (10 prizes, 20%)
(3) UOB Travel Voucher (Unlimited prizes, 75%)

We know the red number, not the green. As you can see, in any independent token redemption, I have a 5% chance of winning the miles, a 20% chance of winning the wallet and a 75% chance of winning the travel voucher. However, once all the wallet prizes are exhausted, I have a 6.25% chance of winning the miles and a 93.75% chance of winning a travel voucher.

That’s why the unlimited prizes are included in this game- because they can’t be exhausted, they soak up the bulk of the “wins” and ensure that the odds of winning the miles remains small. Presumably, in the UOB system, the unlimited prizes have been assigned a much higher probability of being won.

(3) The draw is flooded with prizes that aren’t quite prizes

You’ll notice I highlighted some prizes in yellow above. These are the ones I like to call “give with one hand” prizes. Some of these are obvious marketing tie-ups, eg the opportunity to buy a Canon camera or Rimowa luggage at a discount. Plaza Premium’s contribution to this giveaway is just sad- they’re awarding a maximum of 2 free lounge passes a day, but will gladly give away 110 prizes of 50% off lounge access for the second person. Yup, the second person. The first person needs to buy lounge access at full price.

The UOB Travel vouchers? T&C state no combining of vouchers in a single booking. Yup, it’s just to sucker you into paying UOB Travel’s inflated prices. And don’t get me started on the unlimited number of 50% off single trip plan/20% off annual multi trip plan “prizes” offered by UOB Insurance. That has to be the ultimate booby prize.

The way I see it, there are only 122 prizes per day that come with no strings attached (in the form of minimum spending ,or require you to buy something to enjoy the discount)- the 43 miles prizes, the 27 tote bags, 50 wallets and the 2 lounge passes.

Conclusion

I could of course just be misreading all of this, and I invite any reader with a better understanding of probability (and online giveaways) to educate me about this. Have a read of the full T&C here.

TL;DR. If you’re planning to spend overseas anyway be sure you get your token. But don’t spend deliberately just to take part because I suspect we’re going to see a lot of lucky UOB Insurance discount voucher winners…

Here’s a challenge to any mathematically inclined reader- can you figure out the maths behind this? Is my analysis correct? Or am I just embarrassing myself here?

In summary- this is the question you need to ask yourself:

Image result for do i feel lucky clint eastwood

The Milelion Directory has been updated for December

Hello everyone and blessed Advent season

The Milelion directory has been updated for December. More useful articles on travelling better for less await.

Note that this is not an exhaustive list of every article on the site. I do not mention below timed promotions or limited period offers which will eventually expire. For these you need to try the tags on the side of the page or watch the main page (and click through to older articles at the bottom).

You can always find the latest directory here. As of December, the directory reads as follows-

Airline Programs

Credit Cards

Hotels

Rental Cars

SIM Cards

Reviews of Flights and Hotels (Trip Reports)

Other useful stuff

[Last updated: [4 Dec 16]

How to get from Singapore to Miami, or why March can’t come soon enough

I finally had time to sit down and plan my leave for 2017. Although the vast, unexplored spaces of South America and Africa beckoned, I consider myself to be pathologically boring and decided to visit the USA (again). But just so no one could call me predictable, I decided to explore the great state of Florida this time round.

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Florida, aka America’s wang

Miami would be my first port of call. My virgin US open experience had whet my appetite for more high quality tennis and the Miami Masters were scheduled to take place at the end of March/start of April.

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But Miami is also known for great beaches, beautiful art deco buildings, Cuban and Argentine influenced cuisine and much more.

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And since I’m in Florida, it only made sense to visit Orlando too. I do love theme parks and the idea of visiting the theme park capital of the world, excites me to no end. Orlando boasts Disney World, the Epcot Centre, Discovery Cove, Universal Studios, Universal’s Islands of Adventure, Legoland. Seaworld…the list goes on and on.

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I’ll definitely do a separate writeup on Orlando and Miami with things to do ala my DC trip report, but let’s first look at the higlight of the trip- getting there!

Getting to the States

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It’s not that straightforward to get from Singapore to Miami on miles (if you’re wiling to pay revenue prices you could fly SIN-LHR-MIA, with the LHR-MIA leg operated by Virgin Atlantic). The closest major international airports to Miami were Houston and New York, both of which were about 2.5 hour connecting flights away from Miami. SQ25/26 is one of the hardest routes to clear award flights on, so I decided to look at Houston instead.

SQ recently announced that it would start routing its IAH flight through Manchester instead of Moscow, presumably due to the downturn in the global oil sector leading to less oil-related travel between Houston and Moscow. The flight is currently operated in a 3-class 77W (with the 2006 premium cabin products) but eagle eyed observers noted that from 1 Jan 2017 First Class space was no longer available for redemption or revenue bookings. The most logical conclusion was that SQ has identified this route for deploying the A350.

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I’m going to fly Thai’s A350 in December from Bangkok to Singapore, but this will be my first long haul A350 experience and I’m really excited.

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SQ’s A350 has its newest (2013) business class seat, and although there are some complaints out there about how narrow the cabin is, I think it’ll still be a great trip report to write. The cost of a one-way redemption was 72,250 miles + S$412 of taxes.

Once I land in Houston I have 90 minutes to make my connection to a domestic flight to Miami. It’s a short connection for international-domestic and some might say I’m playing with fire, but I’ve recently been approved for Global Entry which gives me a good feeling about this. What could possibly go wrong!

Here’s where I took advantage of one of the great sweet spots on the Krisflyer partner award chart– the ability to redeem domestic US tickets for only 12,500 in economy.

Image result for united economy

I did so because the one-way ticket prices from Houston to Miami that matched my schedule were in excess of S$400. 12,500 miles and S$8 of taxes got me my United economy ticket. It’s a 2.5 hour flight and since Netflix now lets you download movies to watch offline, I figured I’d be just fine.

Getting back to Singapore

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The next problem I faced was how to get back from the States. I had two options.

I could fly back to IAH and take EVA back to Singapore. The problem was that flights between Orlando and Houston were expensive and didn’t suit my timings. The most workable option was to fly with United, but that would get me into Houston at 5.55pm for a flight that took off after midnight.

And that would be an awkward kind of layover, because it’s too long to stay in the airport and too short to go out and explore. Plus, I didn’t really fancy paying US$70 for an Uber roundtrip to downtown Houston for just a couple of hours, with my bags in tow.

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So I looked at option 2 instead, which was to fly to JFK and take EVA’s 1.25am flight home. And that solved it- Jetblue was offering S$219 tickets one way from Orlando to JFK (with a bag included- any FYI, Jetblue flights now earn Krisflyer miles) that got me into JFK at 11pm. That was plenty of time to make the connection.

Despite hearing so many great things about Jetblue, this is actually going to be my first time flying with them, It’s unfortunate I couldn’t take advantage of their great points matching promotion not too long ago, but I’m nonetheless excited to see why this LCC is so much more loved than the legacy carriers in the states.

The only downside of this arrangement is that EVA operates its Hello Kitty service to Houston but not New York.

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High on my to-do list is try one of the EVA Air Hello Kitty flights at some point in the future. But I guess that’ll have to wait until I travel one of the follow routes…

Sidenote: I cannot access the EVA Air Hello Kitty website from my office. why? Well…

The flight cost me 78,000 Lifemiles +$30 of taxes for a total outlay of about US$1,100 (I bought my Lifemiles at 1.375 cents during the last sale)

My only regret is that I really wanted to try a new cabin product this time round. I suppose SQ’s A350 sort of counts, but I was secretly hoping there’d be award space on Asiana’s Business/First class or something available with one of the European carriers.

Has anyone been to Miami/Orlando? Any highlights/must dos?

Travel Better for Less