Miles and More?14. January 2013 by Joachim Goldberg
The train has long been my preferred choice for domestic travel. So, as there seem to be fidelity cards for practically everything these days, there is also one for frequent rail travellers like me. For every euro I spend I collect credits for use on tickets and other services provided by the railway operator. The whole scheme runs silently and automatically in the background. I pay no attention to the account or to the points that accumulate on it. The monthly e-mail from the railway operator advising me of my account balance is usually left unread for several days before being deleted. It was only when a work colleague reminded me of the hyperinflation that often accompanies these reward schemes that I decided to take a closer look. It’s true. Over time, the number of bonus points that one requires to ‘buy’ tickets, or the various other gift items, rises dramatically. It makes no sense to save under these conditions.
I decided to go on a spending spree to reduce my stock of fast-devaluing reward points – 1000 points for simple rail ticket here, 2000 for a first-class indulgence there. Points sped out of my account faster than a high-speed train, although I got remarkably little for them. Sometimes, spending points would even cost me time and energy. For instance, there was the time I had to wait 20 minutes in line at the first-class counter at the rail station in order to take advantage of one of my many upgrade vouchers. On other occasions, using vouchers dragged me into bothersome choices concerning trivial things that I would have preferred to avoid.
Take for example, my visit to the buffet car – a watering hole I usually do not frequent because the overpriced coffee is so appalling. But, as I was flushed with dining vouchers from my mileage account, I made an exception during a recent journey with my son. Seven euros for two soft drinks is enough to raise the eyebrow of an unwary traveller, but not for one whose pockets are stuffed with five-euro buffet vouchers.
“Make it eight,” I said to the waitress as I pulled out two of the said vouchers.
“I’m afraid I can’t give any change on payments with vouchers,” she announced with a look of genuine disappointment, “but you could use just one voucher and pay the rest in cash.”
What a dilemma: should I now pay three euros in cash to buy drinks I probably never would have bought had I not had any vouchers in the first place, or should I sacrifice two vouchers to pay for the already overpriced drinks? I argued to myself that the vouchers were anyway a windfall profit and were certainly not worth their face value, but the economic man in me was too strong. Grimly, I reached into my wallet, opened a new mental account, and paid the three miserable euros in cash.
“Sorry, I don’t make the rules,” whispered the waitress empathetically, “but look at it this way: at least you can use that voucher for something else.”
Had I not known anything about behavioural economics, the revelation of this overlooked additional gain might have restored my peace of mind.