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AIRLINES AIM FOR HOLIDAY SHOPPING DOLLARS
By JANE L. LEVERE
 
c.2006 Courtesy New York Times  
Lori Okimura, a business traveler based in Los Angeles, earned more than 3,000 frequent-flier miles on Thanksgiving night and the next morning, but she never left her home.
Her secret? She took advantage of holiday shopping bonuses at the online shopping mall run by American Airlines’ frequent-flier program. She was able to buy gifts from retailers like Circuit City and Target and receive bonus miles both for purchases at these retailers and for using her Citi AAdvantage MasterCard.
‘‘Instead of standing in line with 500 people in front of Target, when everybody was in a frenzy, I chose to go online,’’ Okimura, who runs a sporting events marketing company, said last week. ‘‘I got up early, had a cup of coffee and was online for four hours. I’m 90 percent done with my holiday shopping and I earned double miles.’’
New within the last four years, online malls operated by airlines and hotel companies have come about, experts say, in part because Americans are growing increasingly comfortable with buying online.
Jupiter Research estimates that online shoppers will spend $32 billion this holiday season, generating 7 percent of all holiday merchandise sales. Henry Harteveldt, who follows the travel industry for Forrester Research, said the malls are also another example of airlines’ increasingly aggressive efforts to ‘‘increase the amount of ancillary revenue, which is a crucial part of their business strategy to become or remain profitable.’’
For travelers with more miles or points in their accounts than dollars in their wallets, a few hotel companies and airlines permit redemption of miles or points for merchandise or gift cards. And last-minute shoppers on their way through certain airports can find shopping opportunities there. The online retail malls operated by airlines like American (a unit of AMR), United (part of UAL), USAirways, Delta Air Lines, Continental Airlines, Midwest Express and Northwest Airlines, and hotel companies like Marriott International, Carlson and the InterContinental Hotels Group are entered through the Web site of the airline or hotel loyalty program.
Participants can then link directly to the site of the retailer where they want to shop. When they make their purchase — paying the same price as if they had gone directly to the retailer’s site or a bricks-and-mortar store — they receive loyalty program miles or points. The retailers pay the airline or hotel company a fee for every mile or point given to the loyalty program participant upon purchase. These can then be redeemed for free plane tickets or hotel stays.
During the holiday season, these miles or points can add up. This year, for example, American, United, Delta, Continental, Northwest and others are offering bonus miles for purchases, in some cases double the usual amount.
Miles obtained through USAirways’ program can be used to attain elite frequent-flier status. Similarly, until Wednesday, United is letting users of its Mileage Plus Visa card who shop during the holiday season and pay a $99 fee accrue miles good for elite status.
American is giving out mileage bonuses for certain purchases made with either a MasterCard and or a Citi AAdvantage MasterCard. And SkyMall, a company that aggregates the offerings of more than 200 retailers into catalogs found online and in seat backs of airplanes, is offering a $50 gift card for every $200 purchased by Air Trans, American, Southwest and United passengers. To help travelers determine the best offers, Randy Petersen, a loyalty program expert, recommends three Web sites: webflyer.com/deals/mileagemall, a site he operates that contrasts all travel loyalty programs’ deals, as well as rewardsdb.com and evreward.com, which compare offers from both non-travel and travel loyalty programs.
Experts say there is little downside to shopping this way. ‘‘If you choose not to earn miles through retailers that allow you to earn them, you’ve left value on the table,’’ said Tim Winship, publisher of Frequentflier.com.
For holiday shopping, Petersen favors Continental’s online retail mall, which he says has the ‘‘consistently richest’’ offers from the best retailers, while Winship recommends American’s mall, with more than 200 retailers.
Travelers considering accruing additional miles through holiday shopping should also consider what Winship calls ‘‘the elephant in the room’’ — difficulties encountered by frequent fliers in recent years in obtaining bonus tickets. This development was confirmed by a report issued last month by the inspector general of the Department of Transportation, who noted a decline among some airlines in the number of award tickets issued from 2002 through 2005.
If travelers participate in both airline and hotel loyalty programs and can get the same holiday shopping bonus from each, Winship said, ‘‘It makes more sense than ever to carefully consider the hotel offer,’’ since it may be more readily available and also worth more.
For travelers rich in loyalty program miles or points, Petersen recommends offers by companies like Hilton, Starwood, InterContinental, Delta, United and others that allow redemptions for merchandise or gift cards. Travelers can even ask a personal shopper at InterContinental’s program to price a specific item in points; if the traveler agrees to pay this price, the item can be delivered within two weeks.
These redemptions make sense, Petersen said, only if they provide a ‘‘financial benefit when you have a lot of miles and not a lot of money, or when you have too many miles that you can never use.’’
But he said merchandise bought this way is often overpriced: He estimates that each frequent-flier mile awarded for redemption as a flight is worth 1.5 cents, while miles redeemed for merchandise are each worth 0.5 cents.
For travelers who have time to ponder holiday purchases only while laying over at airports, all is not lost. Late last month, Dallas/Fort Worth International Airport introduced duty-free shopping for domestic passengers at Buckaroo Tax Free in the new international terminal. The shop is paying all sales taxes on those purchases by domestic travelers. Stressed-out shoppers can use the airport’s new ‘‘First Class Seats,’’ massage chairs that for a nominal fee let travelers recline, listen to music and recharge their portable electronic equipment.
Dallas/Fort Worth and airports in Atlanta, San Francisco, Reno, Indianapolis and Minneapolis also feature new automated kiosks, operated by Zoom Systems, that sell items as diverse as iPods or Motorola cell phones and Neutrogena or Proactiv skin care products, priced competitively. Minneapolis-St. Paul International Airport is also distributing discount coupon books to travelers offering deals from retailers like Tie Rack, Simply Books and Naturally Cashmere.
Perhaps one of the most off-beat offers comes from the Paradies Shops, which operates more than 500 stores in more than 60 North American airports. The company’s ‘‘read and return’’ program lets the purchaser of a book read and return it, with the original receipt, within six months for a 50 percent refund. The book may be returned to any Paradies shop in any location. This is a gift that can truly keep on giving.