KrisFlyer miles expire after 3 years unless youโre a PPS Club member, in which case they donโt expire.
Although Iโm not part of the PPS Club, Iโve personally never had a problem with expiring miles. Thatโs because Iโm of the belief that you shouldnโt be holding on to miles for so long that expiry becomes an issue. Whatโs more, your real window is longer than 3 years, because you get the benefit of a few additional years (2 years for the UOB PRVI, no expiry for the DBS Altitude and Citibank Premiermiles) so long as your points reside on the bankโs side.
That said, I realise the 3 year policy can be an issue for people in certain circumstances, especially those saving up for an aspirational award who earn miles a slower rate under an auto-crediting arrangement. Moreover, I still think that KrisFlyerโs current mileage expiry policies donโt make sense, and hereโs why.
What type of expiry policies are out there?
First, letโs lay out the three type of mileage expiry policies that FFPs can adopt:
(1) Time-based expiry
Under this system, miles expire after a pre-specified period of time following which they were earned, regardless of activity.
This is the policy that KrisFlyer currently adopts for basic, Elite Silver and Elite Gold members. Miles are valid for 3 years, and basic members can pay 1,200 miles or US$12 per 10,000 mile block to extend their validity for 6 months; Elite Silver and Gold members can pay the same fee for an additional 12 months.
(2) Activity-based expiry
Under this system, miles do not expire so long as the member has some sort of activity in their account at least once during a specified time period.
For example, miles in United MileagePlus remain valid so long as you have an earning or redemption activity at least once during an 18 month period. Any sort of activity resets the 18 month clock.
(3) No expiry
Under this system, miles do not expire, period. These policies are understandably uncommon, although Delta actively markets this as a key advantage of their SkyMiles program (who needs award charts, amirite?).
This is the policy that KrisFlyer adopts for PPS Club members. Ever since the changes made to the PPS Club back in May 2017, KrisFlyer miles do not expire for PPS Club members so long as they remain part of the PPS Club.
Whatโs wrong with a time-based expiry policy?
Airlines like time-based expiry policies because it enables them to reliably estimate their โbreakage rateโ, or the number of miles that expire without being redeemed. This all-important number affects the fair value of miles on the liability section of the balance sheet, and therefore other investor-relevant metrics like working capital.
The breakage rate also affects the rate at which airlines can recognise revenue arising from the sale of miles, a complex issue I wonโt go into detail in this post (but am tempted to do in another). All things equal, a shorter expiry period increases the likelihood of breakage, reducing the fair value of the outstanding miles.
However, time-based policies arenโt great for numerous reasons. First of all, they penalize members who are saving up for an aspirational award. As David Feldman puts it in this excellent article:
And if they are dutifully earning miles throughout this period (for which your program is receiving revenue)โโโwhy on earth would you kick those members in the guts right when they are generating revenue for you?
Second, time-based policies are confusing for consumers. Consider this scenario:
(1) I have 50,000 KrisFlyer miles that expire on 1 March 2018
(2) On 1 Jan 2018, I spend these 50,000 KrisFlyer miles to redeem an award ticket that departs on 1 October 2018
(3) On 1 May 2018 I decide I canโt travel and cancel my ticket. The customer service rep tells me I wonโt get any miles back because they expired on 1 March 2018
From the customerโs point of view, this isnโt immediately intuitive. โWhat do you mean my miles expired? My ticket is still validโฆโ And yet the rep is technically correct. In one sense, your miles expire on a fixed date, but in another, youโre allowed to redeem those miles for a ticket that flies after the expiry date.
Third, time-based expiry policies penalize customers holding an airline cobrand card, which is kind of insane if you think about it. Someone with a KrisFlyer Ascend, for example, is earning miles that get directly credited into his or her KrisFlyer account. The 3 year timer starts ticking with every batch that get credited.
Contrast this with someone who earns points that donโt expire with a 3rd party credit card. This individual can choose when he or she wants the three year timer to start. If the cobrand cardholder is more valuable to the airline than the 3rd party cardholder, why is this individual on the losing end when it comes to expiry?
Fourth, breakage isnโt necessarily a good thing for airlines. If an airline is seeing high breakage rates on its miles, it means people are not getting the opportunity to spend them. In the short term, an airline may recognise more revenue from higher breakage, but over the medium to long term consumers will lose interest in acquiring such miles, meaning partner programs will buy fewer and ultimately the airline loses.
At the same time, however, I donโt think a no-expiry policy makes sense from the airlineโs point of view. Remember that unredeemed miles hang around on the balance sheet as a liability and a drag on the overall financial position. Some of them may never get redeemed, even with a no-expiry policy, but thatโs going to be a relatively small amount.
So if a time-based expiry policy doesnโt make sense for consumers (and arguably the airline), and a no expiry policy doesnโt make sense for the airline, what should KrisFlyer be doing?
What about an activity-based expiry system?
The problem with time-based and no-expiry policies is that they do not encourage the key metric of customer loyalty- engagement.
Think about it: the reason you have a loyalty program is to build touchpoints with your customers. I want to continually build out ways of interacting with them beyond just the airplane cabin. I want them to think about my airline when they go to the supermarket, or pump petrol, or book a hotel, or dine in a restaurant.
Activity-based expiry policies encourage just that. If KrisFlyer had an activity-based expiry system, Iโd be more inclined to:
- Get and use a cobrand KrisFlyer AMEX, since the instant crediting effectively means my miles never expire so long as I use the card regularly
- Convert my Chope Dollars/Grab Points/Tap for More points/ other 3rd party loyalty program to KrisFlyer miles
- Dine more often with Mileslife and credit to KrisFlyer
- Use KrisFlyer Spree
- Credit miles from a Star Alliance partner to KrisFlyer
- Include my KrisFlyer number when booking a hotel reservation or rental car
All of these activities generate incremental revenue for KrisFlyer, insofar as they create more demand for miles.
More importantly, an activity-based expiry policy has the ability to engage the so-called marginal members. Time-based expiry policies actually arenโt an issue for the vast majority of us in the miles and points game, because we know how to manage our miles carefully. Weโll hold them on the bank side until we need to transfer, weโll make plans to regularly burn whatever balances are in our Krisflyer account, and we generally wonโt be in a situation where we have to accept inferior value (such as redeeming them on Krisshop) for our miles due to imminent expiry.
But weโre not the people that Krisflyer needs to build bridges with. Think about the marginal members on the fringes of the program. The occasional traveler with the odd flight here and there on Singapore Airlines. The guy who used a cobrand card for a while before switching to cashback. The lady who got a couple thousand free miles for signing up for a magazine subscription. Miles tend to be an afterthought to customers with this profile, and they each may have a small balance that ends up expiring or cashed out at a poor value.
โIsnโt that good for the airline?โ you ask. No, itโs not. In the short term perhaps, but the airline is missing out on the opportunity to bring these members into the fold. Suppose the lady with a couple thousand of expiring miles knew that she could extend them by simply signing up for a cobrand card, or giving her membership number when booking a rental car. I imagine sheโd be inclined to do that. Itโs the theory of loss aversion put into practice- if there is a simple way she can extend the expiry of her miles by another 18 months or so, why not?
Activity-based expiry policies make it more likely that these marginal members can make it to their very first award ticket. And thatโs the key threshold that Krisflyer needs to get them to, because research has shown that that successfully attaining a reward increases customer loyalty and subsequent engagement. Thatโs just basic motivational theory- when customers realise โhey, this free ticket thing really worksโ, theyโre more inclined to try harder in the future. Anecdotally, Iโve heard from quite a few people that the moment they were truly won over by miles and points was when they first sat down in 1A and received a glass of pre-departure champagne.
Whatโs the tradeoff?
If Krisflyer moved to an activity-based expiry system, the expiry period would certainly be shorter than 3 years. Thatโs a tradeoff Iโm willing to accept, so long as the period is something reasonable like at least one activity every 18 months. Thatโs because the abundant ways of earning Krisflyer miles for those of us in Singapore means itโs easy to say active.
The equation would of course be different for you if you were a Krisflyer member in a country that didnโt have a lot of earning opportunities. But even then, it might encourage these members to do things like use Krisflyer Spree more often, or actively seek out channels that partner with Krisflyer like Kaligo or Rocketmiles to book hotels. That sort of behaviour is also good for Singapore Airlines.
Conclusion
Moving to an activity-based expiry policy would encourage Krisflyer members to stay active. It would also have the effect of drawing in marginal members. I canโt think of any real downside for those of us who carefully manage our miles and points, and in fact it might even be better for road warriors who earn big but donโt have the time to burn.
Or to put it another way- an activity-based expiry policy effectively means an active memberโs miles never expire. Given the low threshold for โactiveโ, this should benefit the vast majority of users.
What do you think? Does the 3 year expiry policy work well for you or would you prefer an activity based system?
Any solution to a childโs KF miles? I canโt redeem them as the system doesnโt allow me to book a flight as the child is below 12 yrs old.
ah, family pooling is a feature i wish KF would add too.hereโs the relevant text- you can book if youโre traveling together with the child. the thing is your child would be redeeming miles for you as his/her redemption nominee, which is a bit messed up. A KrisFlyer or PPS Club member who is 12 years old or below cannot redeem his/her KrisFlyer miles for award tickets online, unless a redemption nominee who is 18 years old or above is travelling with him/her on the same flight. A KrisFlyer or PPS Club member who is between 12 and 17 yearsโฆ Read more ยป
Activity based is good unless they treat redeeming flight as minimum qualifying activity
If I had a thousand thumbs Iโd give this article a thousand thumbs up. KFโs expiry policy is one of the reasons I didnโt move to them, and away from United Mileage Plus, when I first moved to Singapore. I didnโt necessarily think my own miles would expire โ I make pretty good use of them โ but to me it said a lot about how the whole program is run, and I decided Iโd be better off staying with MP. As a result, I feel no loyalty to SQ and will just as happily look to another Star Allianceโฆ Read more ยป
activity-based would be great, but at this point iโll just be grateful if they donโt follow delta and scrap the FF program altogether
This is precisely the reason why I never registered nor bothered with krysflyer. Choosing to invest in alaska and asia miles instead. So what if there are more options cos they end up expiring anyway especially in the context of constant threat of program devaluations etc.
The irony when asia miles also have a 3yr expiryโฆ
err, Asiamiles point expiry shifts with account activity. Did you even read the article?!
This is extremely useful after finding a way to transfer a few hundred points to Asiamiles without any transfer charges. Also remember there are instances of credit card cancellation decisions and the points have to be converted.
What is a suitable arrangement for you (the fixed 3 yr clock) does not mean it fits everyone elseโs.
asiamiles points expire after 3 years, regardless of activity
Even so, I prefer Asia Miles which I also maintain. Despite the grumbles about CX, they are more efficient than SQ and pretty well run. At least I donโt get the feeling Iโm something the cat dragged in!
I donโt think the 3yr clock is a big deal. Those who know how to avoid dumping huge points in kf will do so anyway by warehousing on the banks side. Kf has a very wide range of credit card transfer partners across many countries that makes it easier to accumulate even if outside of singapore. When I was younger (without a credit card), and not in Singapore, 3 years gives more time to use the miles than an 18mth activity period since it wasnโt easy to credit miles to kf. And as you mentioned, putting an end date onโฆ Read more ยป
iโm pretty sure youโre mistaken about KF qualification. i got KF elite gold first time with 50k miles instead of 75k
Oh thatโs interesting. A few years ago a family member grumbled about having the elite miles reset to nil after achieving silver. After that I decided to chase status elsewhere (had partner *G for a few years but lost it now); family member persisted for a bit but saw the status light with another program
@Phill โ Agree that the lounge hierarchy at Changi is pointless and petty. But having recently made gold, I can say there is quite a perceptible difference between gold and non-gold. Of course I am not so naive to think that sq would ever prioritise me for an upgrade. But there are other *a airlinesโฆ.
@Aaron โ 10,000 likes for this post. Was wondering if you managed to convey any of these points across during your recent sq hobnobbing evening?
@Chocolat I just found the lounge to be the biggest sign of sqโs disregard for golds The most silly thing I saw sq do to gold was to push them out of the business boarding line and into the economy line. In sq terms, gold priority boarding now means being called for boarding before other economy pax. But part of the reason a priority line was important for gold is to allow them to kick back in the lounge for that extra 10-15min and not have to deal with a snaking boarding line, esp for full A380s. Stupid change thatโฆ Read more ยป
Last flew sq a380 in jan and that was not my experience. Next sq a380 will be july so will keep a look out! Anyway the simplest way to avoid the queue is to be the last person to board the plane. (Within the allowed time of course) That is my usual strategy. No queue!
Yeah, I ignore the boarding line thing. Never been turned away from the Premium line with my B&W economy boarding pass and KF Gold.
Iโve flown quite a bit with EVA and have been upgraded PremY->J around 10% of the time with KF Gold.
0% from a much larger sample with SQ. Iโm just happy if they give me a bulkhead seatโฆ
Sorry realised thereโs a Phil, changed my name @chocolat, been a couple years since I lost *G, but see Philโs comments that most of them turn up in the biz lane regardless @Phil, I figured out after my first couple sq flight as a *G that all the golds just turned up at the business line anyway. My first sq flight as *G I followed the signs, it mustโve been just after they changed it but I was not pleased in the long Econ line. I just came back from the US, and sq made UAโs boarding process look worldโฆ Read more ยป
Oh UAโs is super convoluted!
I think there is room for a few Phils ๐
I believe that the โuniquely Singapore mindsetโ is part of corporate Singaporeโs DNA. I have a sizeable amount of miles and redeemed them to go to HK on a two-to-go promo. Despite selecting our seats (aisles), my companion got her aisle seat (she has some status K-something Gold) and I got a middle seat with the bulkhead at my back and it was not a full flight. Returning on Tuesday it was the same story; this time I took a screenshot of the seat allocation. Sure enough when we checked in we got different seats! SQ disregards those with milesโฆ Read more ยป
Sq doesnโt usually care about how many miles you have. To be fair most airlines are like this.
Sq kind of sometimes cares about how many elite miles you have. They really care how much PPS$ or whatever itโs called you have.
Quick question โ how much miles do you all keep in your KF account at any point of time? Assume I have 200K miles with Citibank, should I transfer these miles to KF account to โparkโ there in case I would like to make redemptions?
I have over 200k in KF but Iโm building towards 2 long haul redemptions.
In general keep them in your bank until you need them for maximum protection against devaluations.
It also gives you flexibility to redeem on other great carriers like EVA or Cathay.
Once transferred to Krisflyer, the krisflyer miles will expires in 3 years. The transfer usually just take a few days.
Aaron, can you have a whack at DBS and their 1 year expiry for points on most of their cards?
well, dbs points earned on the altitude donโt expire. the main issue for those of us chasing miles is the 1 year expiry with the dbs wwmc.
Still, 1 year expiry is generally very unreasonable. Means I need to pay a $25 annual fee to flip the miles over. Plus GST too right? The plus GST part is extra ludicrous.
I fully agree, thatโs why, as a person based in Malaysia, my FFP is BAEC, because they donโt expire as long as you had some sort of activity within the past 36 months, which is really easy to achieve, either from credit card transfers, hotel partners, or alliance members.
[โฆ] Other frequent flyer programs adopt activity-based expiry policies, where points can be extended indefinitely so long as youโve got some accrual or redemption activity in your account within a particular period (check out my argument for why KrisFlyer should also switch to such a system here). [โฆ]