Transfer miles or buy outright to gift flights?

By Cathleen McCarthy

Cashing In

Cathleen McCarthy is a journalist whose articles on travel, commerce and consumer topics have appeared in dozens of publications. She writes "Cashing In," a weekly column about credit card rewards programs, for CreditCards.com Ask a question. 'Cashing In' archive

Dear Cashing In,
My sister could use a vacation, but can't afford to go anywhere right now. I've got plenty of miles to share and would love to surprise her with a flight. How does one go about "gifting" frequent flier miles to someone? -- Audrey

Dear Audrey,
What a generous impulse! Your sister is going to love you for this one.

The simplest and cheapest way to gift her a flight is to buy it yourself using your own award miles and put it in her name. If you'd rather leave it to her to arrange her own trip, you can transfer your miles into an account under her name, but you'll have to pay some fees -- and they can add up fast.

Also, it may be difficult to surprise her with a fait accompli if you do it this way, given she's going to have to set up a frequent flier account with your airline and give you the account number before you can make the transfer.

You didn't say which airline your miles are on, but most airlines make it easy to do this. Each airline has variations on rules for transferring miles. A quick search of the airline's website should turn up the guidelines and fees. You will have to log in to your frequent flier account and fill out a form, including your sister's account number and email address. Miles are usually transferrable in increments of 1,000 and transfers are nonrefundable. Transferred miles will automatically be deposited into the account you identified and your sister will receive email notification of the transfer.

Limits to how many miles you can transfer vary by airline. If your miles are with United Airlines' MileagePlus, for example, you have to transfer a minimum of 2,000 miles at a time. However, while you're allowed to transfer up to 60,000 per year to three recipients, a MileagePlus member is only allowed to receive up to 15,000 miles in one year. That means you can only gift your sister 15,000 miles for her birthday -- not enough for a round-trip fare, unfortunately, unless she already has 10,000 banked with United. (Round-trip domestic award fares start at 25,000 miles.) If she doesn't, you or she can supplement your 15,000-mile gift by buying additional miles.

The bad news: United charges $.015 per mile just to transfer the first 15,000 miles, which will cost you $225 -- a hefty sum, considering it only covers 60 percent of the lowest-tier domestic fare of 25,000 miles.

American Airlines limits you to a maximum of 15,000 miles in one transaction and 60,000 miles total in a year, charging $50 for transfers of 1,000 to 5,000 miles, $100 for 6,000 to 10,000 miles, and $150 for 11,000 to 15,000 miles, not including taxes and a $30 transaction fee. So giving your sister 25,000 miles on American Airlines would cost you $310 plus tax ($150 plus a $30 transaction fee to transfer the first 15,000 miles plus $100 and a $30 transaction fee to transfer the remaining 10,000 miles).

If your miles are with Delta SkyMiles, you can share up to 30,000 miles at a time -- enough to cover a round-trip domestic fare, with a bit to spare. Delta charges one cent per mile transferred, but tacks on a $30 processing fee. For that fee, you can transfer 1,000 to 30,000 miles at a time, in 1,000-mile increments. Transferring those 25,000 miles will cost you $280 plus tax (25,000 miles x 1 cent per mile + $30 transaction fee).

There are also airline gift cards, but you have to make sure all the terms and conditions of the card meet the needs of the recipient. See "Giving the gift of flight with airline gift cards."

Now you can see why I advise purchasing the ticket yourself, using your own miles. My advice is to print out a makeshift gift card for her that says "one round-trip airfare" -- and hope she doesn't hit you up for a trip to Hong Kong.

See related: The greatest gift of all: free travel

Gary Foreman, "New Frugal You"

Sally Herigstad, "To Her Credit"

Cathleen McCarthy, "Cashing In"

Jane McNamara, "Let's Talk Credit"

Elaine Pofeldt, "Your Business Credit"

Erica Sandberg, "Opening Credits"

Published: April 10, 2012

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