What do ’10 facts about Avios’ tell us about the average collector?

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Avios is 10 years ago and IAG Loyalty has been posting ’10 facts about Avios’ on its LinkedIn feed over the past couple of weeks.

I thought it was worth taking a look at them, purely because some of the answers make you worry how much grasp the average collector has of money and economics.

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Of course, if IAG Loyalty makes it money from the bulk of account holders making sub-optimal decisions then it means that low hanging fruit should remain for the rest of us ….

Fact No. 1:

1.1 billion Avios have been ‘gifted’ over the years. Shockingly, one member has given away 2.7 million Avios over that period.

Gifting Avios is, frankly, crazy UNLESS you are a Gold member.

A Gold member of British Airways Executive Club is allowed to gift up to 27,000 Avios per year to another member, with a total gifting allowance of 144,000 Avios per year.

Clearly, if you are Gold and can transfer Avios for free, it is well worth doing if necessary.

For everyone else though …. why?!

‘Gifting’ Avios does not come cheap. To send 13,000 Avios to another person costs £100, for example.

This is mad. IAG Loyalty is laughing, of course, because it is £100 of pure profit. Not a single new point is being created.

It would probably make more sense for the recipient to buy the Avios they need during a bonus promotion. It will cost more, of course, but it is a better deal overall because the other person keep their Avios. In my example, those 13,000 Avios could be cashed out if needed for £104 of Nectar points.

In many cases a transfer isn’t even necessary. You can book a flight for another person using your Avios – there is no need to transfer them. Obviously the ‘gift’ may be a top up, but it is still makes little sense. Better, for example, to pay £159 to subscribe to The Spectator and receive 12,500 Avios, and let the giver keep their points.

Fact No. 2:

This is interesting. 95 million Avios were donated to the NHS appeal last year.

10,000 members chose to donate Avios, which means an average of 9,500 per donation.

They were given to 5,000 NHS staff, who would have received an average of 19,000 Avios each. I don’t know if they were divided equally or if people were asked what they wanted to do with them and then received an appropriate amount.

19,000 Avios is an odd number, of course. It would get two people a weekend in Amsterdam, but only one person could travel to southern Europe. We obviously shouldn’t knock the gesture, however.

Wearing my economist hat, however, donating miles to charity is rarely optimal unless they are about to expire. You – and the charity – would be better off if you spent them on yourself and donated an equivalent value to a good cause. You are likely to maximise the value of the points better than the recipient, and both you and charity could claim gift aid.