Buyer Beware: I Wouldn’t Touch Etihad Vouchers With A 10 Foot Pole
The miles and points community has been on fire since One Mile at a Time broke the story on Etihad’s latest promotion. It has been covered pretty much everywhere. Etihad is selling vouchers for future travel at a substantial discount. The offer makes it possible to get any flight on their airline for around 33% off, if you play it right. That sounds like an amazing deal, right? Not to me! I wouldn’t touch Etihad vouchers with a 10 foot pole and I don’t think the offer makes sense for most.
Details of the Offer
Here are the terms of the offer:
- You must be a member of Etihad Guest to purchase an Etihad Travel Voucher.
- Call us between 10 – 24 June to buy your Etihad Travel Voucher – you can choose any voucher amount from $250 up to $65,000.
- We’ll add the value of your voucher – plus 50% extra – to a Travel Bank account. We’ll send you an email when your account has been credited.
- Your credit is valid for two years and can be used to pay for trips with Etihad Airways from 1 August 2020.
- You can use the vouchers on seat fees, baggage fees and to book travel for people other than yourself.
Link To Offer
Why This Is A Bad Deal For Most
I think this is a bad deal for most people for a couple of different reasons:
- First off, in this economic climate I would not encourage anyone to tie up funds on something they “may” be able to use in the future. And anytime something has an expiration date the value should be instantly discounted.
- If you have a flight in the next 6-12 months that you were going to pay cash for anyway this offer could makes sense. But even then who knows what flights would be canceled because of the pandemic or which countries will be open to foreign visitors etc. There is too much uncertainty right now, in my opinion, to take a risk on an expiring voucher.
- I said on my chat with Spencer Howard that this feels kind of like a ponzi scheme. Etihad is most likely cash strapped, as are all airlines, and they are looking for ways to add to their reserves. That is a nice short term solution but they will have to incur those costs at some point in the future. The question is, will they be solvent enough to do so at that point? We don’t have any idea which airlines will make it through this pandemic intact. While I highly doubt Etihad will be one of the unlucky few to fold but I am not willing to bet thousands of dollars of my hard earned money on it.
- The deal encourages you to spend money you may not have otherwise. And this is true of all offers like this. Sometimes we fall into the trap of spending money on something because it is a “good deal”. Remember that it is only a good deal if you were going to spend that money anyway.
- I would encourage you to calculate how much the flight you are thinking of booking would cost in miles. Compare that number with how much it would cost to purchase it with the voucher discount. Then ask yourself if you would buy more miles at that cost per miles? Because it is essentially what you would be doing.
When Does The Offer Make Sense?
I will say that this offer could make sense for a small subset of people that are frequent cash flyers of Etihad. If that is the case then I think this could be a great deal for you. There are still risks involved since the vouchers expire but they are mitigated some if this is your normal travel pattern. I don’t think that description matches most of the people reading this article though.
Final Thoughts
Sometimes we get overly excited by the deal or the opportunity in this hobby. My hope with this article is to encourage you to take a step back and consider all the angles before diving into this one. That goes for all offers really. This offer from Etihad comes with a decent amount of risk, quite a bit of baggage and reeks of desperation. That is not a good combo in my opinion and that is why I wouldn’t touch Etihad vouchers with a ten foot pole.
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What people need to realize is that in a financial pinch, there are maneuvers that the company could take to “game” the vouchers and make it less valuable. Companies in the US do this all the time to their customers once they have lured them in. For example: 1) Intercontinental’s Free Weekend night certificate for it’s Ambassadors. To use this you have to pay for one weekend night certificate at a special inflated price that severely diminishes the value of the “Free Night”. So while it is cheaper than paying for two nights, the actual savings is nominal. 2)IHG credit card free night certificate. Used to be able to use it at any IHG hotel. Then they limited it to their lesser hotels, and now they made it even harder to use with their dynamic pricing. The examples go on and on with various different companies.
That is something that needs to be considered for sure. Especially when you are dealing with a carrier that doesn’t have to follow the same rules or regulations that you are used to.
Yeah. Nice try.
You don’t have a ten foot pole.
Soooo… ponzi scheme may not be the right term (they are not inflating the return on investment), but it’s an attempt to increase cash flow. I think you are on point, though, on the ability to redeem the credit due to pandemic-based travel restrictions, as well as the fact that in case if the airline goes under, all the vouchers become worthless.
Ponzi scheme is not the perfect term for sure but the best I could come up with to label something that is taking money for a payout that may never come.