American Express - Customer Service?

British Airways American Express Card

British Airways has just posted its biggest loss, £401m. It makes some extra revenue through its partnership with Amex. Spending on the BA Amex card is rewarded with BA miles.

To encourage existing card holders to recommend their friends Amex offers 2,000 BA miles to both the proposer and joiner. On 31 Jan I proposed a friend. I'm still waiting for the promised BA miles, and so is she.

2 weeks ago I telephoned Amex to find out what had gone wrong. They promised to call me back within 7 days and explain. They didn't.

Today I telephoned again. They said they had called me back two days ago and left a message. I said they hadn't. Could they tell me what number they left me a message on? No, because of data protection rules they couldn't. So far as I am aware there is nothing in the Data Protection Act which prevents Amex telling me what telephone number they have listed on my account.

When I asked for a manager to telephone me and explain their service failure I was told I would have to write in. It's a while since I wrote a letter of complaint, but if they insist.

I've taken the opportunity to remind Amex the credit card and their promotional advertising are both regulated products.

I'm surprised Amex were unable to resolve my complaint more helpfully.

I'll remember that next time I'm sifting through a wallet full of plastic.

Price Rises Cost Customer Loyalty

Sky TV - have they picked the wrong time to test customer loyalty?

As the news about the economy gets worse, companies are struggling to maintain customer spending. Some of the big boys act as though they hope to keep our business how ever much they test our loyalty.

Three examples of companies testing our loyalty this week.

They all lost...

British Airways has cancelled my partner's Silver Executive Club membership. For the first time since 2002 she can no longer use the BA lounge during her weekly business flights. Last year she switched to flying BMI during the terminal 5 fiasco when many domestic BA flights were cancelled, so she didn't earn sufficient loyalty points. BA has saved the cost of providing free coffee and newspapers while she waits to board, but lost her loyalty and their share of an annual four figure sum spent on business travel because now she'll prefer to fly BMI - where she can use the Silver lounge.

Norwich Union upped our annual home insurance quotes by a few more pounds this month and lost both our polices. My quote from Churchill is over £120 less, my partner's £80 lower. We're £200 better off, Norwich Union has lost £550 worth of business because it made the mistake of believing we'd keep stumping up for their annual price hikes. When my partner called to cancel NU immediately offered a 15% reduction. If they could do that when the business was heading out the door why didn't they hold the price increase when they quoted - which may have saved a customer?

Sky Television. Just over a year ago Sky feared its customers might jump to a rival TV and Broadband Phone package so it decided to give existing customers their basic broadband package free. This year it has decided to start charging £5 a month. Customers can avoid the price increase if they opt to take Sky Talk. We don't want to buy phone calls from sky - or pay to use 1471. To get this and other BT type services free we need to switch to Sky telephone line rental. Dealing with Sky is troublesome enough, without giving them more of our money.

So we decide to switch my partner's Sky basic broadband to o2. It's faster, gives unlimited downloads, free wireless router, no connection fee, free UK based customer service and its only £2.34 a month more than Sky's new charge (£7.34 to O2 customers). Even better sign up via a cashback site like Topcashback and you get paid £25 to buy which is effectively 3 months free.

Phoning Sky for a MAC - the code you need to transfer the line from one broadband supplier to another is less easy. Sky seems to have moved some of its call handling off-shore. After 22 minutes the call is put through to an officious customer services representative who decides to cancel the broadband rather than issue a MAC. When asked why he has done this he becomes defensive, and then quite hostile. When I ask him to transfer my call he terminates it. Again we call back and then after 20 more minutes on hold the call is terminated.

My partner and I have a quick chat about how much we hate phoning Sky. Then we hit on an idea. What if we only ever have to phone Sky once more? Let's cancel the subscription. How good would that feel? This would not have crossed our mind if Sky hadn't decided to start charging £60 a year (12 x £5) for its slow, rubbish broadband, had spent some more money training its staff and decided not to outsource its call centre. Sky is going to discover the true cost of these three cost-cutting actions - because they're about to lose £258 of existing annual subscriptions and £60 of future broadband fees.

Norwich Union loss = £550

Sky loss = £318.

Savings to annual budget.
Sky £318 (less o2 broadband £63.56 after cashback) = £254.44
Norwich Union £550 (less Churchill policies £335) = £215.00

Total saving = £469.44

Of course wherever there are losers there are winners. BMI for its punctuality, o2 Broadband for its UK call centres, uncapped service and customer discount and Churchill Insurance for its introductory discounts and market leading rates.

When companies test our loyalty make sure to add up the real cost.

First Class Reward Flight with British Airways

British Airways First Class Cabin from seat 1A

On Saturday we flew First Class British Airways from London's new Terminal 5 to San Francisco. The return flight cost the same as an economy round trip, but this wasn't some fluke upgrade.

I wrote about how I was collecting BA Miles and a Companion Voucher on their Amex card.

Spend £20,000 in a single year on BA's Amex card and they give you another flight for you companion when you redeem your miles. You just pay the taxes and charges on both flights.

I have to point out at this stage that you do really need to have accumulated some BA miles by flying with BA to travel First Class. However you could in theory collect miles on the Amex card forever and then only use the voucher when you had collected sufficient miles (spending £20,000 a year this would take 7.5 years. You could alternatively under the rules buy a maximum of 19,000 BA miles each year at just over £300, which would reduce this to 4 years).

We didn't actually have sufficient miles for a First Class ticket to the US - 150,000 BA Miles. But we did have 112,000. This would pay for a seat in business - but there were none available. BA allows Executive Club members to buy 19,000 miles each year. This costs just over £300. By each buying our full allocation and pooling them in our household account we made the 150,000 mile target. The taxes and charges were £242 each so each seat cost a little under £550. The day I booked an economy fare was £545.

So was it worth it? OK so we had to spend £20,000 on an Amex card. But we divided this in 2 as well, by getting a second card on my account and using the card instead of cash every time we could (even a couple of quid spent in Tesco went onto the card).

But was the hassle worth it? The flight was wonderful. We got to eat breakfast in the brand new Concorde lounge dining booths, the cabin was only half full, the food was delicious, the flat bed and duvet sumptuous, and the flight well... (excuse me) flew by.

But come on, was it worth it? Well each First Class fare was on sale for £2449 the day I booked them. An economy fare was £545 - virtually the same as we paid. So less the charges the reward was worth £2000 each (£4,000 reward for spending every penny possible on Amex). A couple of weeks before we travelled the fare had risen to just under £10,000 each. Today, checking the BA website for the return leg of the fare a single First Class ticket is available for £5243 (the fare must be sold in dollars - it's $9771).

Of course there are more rewarding things in life than First Class air travel. But this has got to be one of the most satisfying loyalty rewards around - if you have the patience to learn all the rules.


The rules you need to qualify for this reward.
To benefit you'll need to:
1. Become a BA executive club member (do this for free by applying for the Amex card).
2. Preferably work with your partner - by creating a BA Household account to pool your miles (all family members at the same address can do this).
3. Spending every penny you can on Amex (ensure you set up a direct debit to repay the full balance every month, or this 'free' reward will cost you a fortune in interest).
4. When you have enough miles for your destination make sure you qualify for the companion voucher by spending £20,000 in 12 months on the card (there is also a premium card available with an annual fee which has a lower threshold).
5. Plan your reward flight a long way advance and pick routes with regular flights (I couldn't find any available reward flights in First to glamorous destinations like Mauritius).

Should British Airways keep the tax if you don't fly?

BA's Terminal 5

Last Tuesday British Airways increased its fuel surcharge for the second time in as many months. Today I'm looking at UK domestic flights from London Heathrow to Glasgow. Last week the cheapest option on BA's website was £92 return - booking at least a couple of weeks ahead.
Today BA's cheapest all inclusive Glasgow return fare available is £117.40. The fare is just £42 but the taxes, fees and charges add almost twice as much again £75.40.

Michael O'Leary at Ryanair has turned hidden air fare charges into an art form - with additional charges for almost everything any air passenger might expect - you pay extra to check in at the airport, check a bag into the hold - there's even an extra charge when you come to pay for the ticket (unless you are one of the very few people using an 'Electron' card - which is the loophole Ryanair use to make this final 'extra' legal).

We've come to expect such artful deception from Ryanair. BA is at least up-front about the additional charges and includes them in the first web price you see. The problem comes if you book - but then can't or don't fly. Shouldn't you get some of the charges back - should you pay the government imposed air passenger duty (£20) if you don't actually fly? The government doesn't get it, the airline pockets it. Should you pay extra for the high price of fuel (£32) if you're not actually on board? If the seat stays empty perhaps you should, but the chances are it will have been sold several times over (airlines are masterful at predicting how many 'no-shows' there'll be).

You can apply online to BA for a refund of taxes - even if your ticket is sold as 'fully non-refundable' but the airline charges a £30 administration fee to refund the government tax (£20) so you won't receive a penny.

Is £30 a fair and reasonable admin fee for an online transaction? I don't think so. Banks and credit cards have had their excessive fees curtailed. If the government doesn't expect to get the tax if you don't fly then neither should British Airways.

Note: After reading this my partner agreed airlines shouldn't pocket the govt tax - but wondered how much sympathy she should have for people who lose money because they don't turn up for their flights. Well, lets see, you might be sick, or desperately needed elsewhere. If you miss your flight - the car breaks down, the train is late - unless you have a fully flexible ticket you'll have to pay all over again. If you can't take the outbound flight but want to use the return leg , you'll discover you can't - the whole ticket is cancelled - and they keep the tax! I think sympathy is in order.

Rewarding Credit Card Debt

Cashback, Interest Free, Reward Points - It's a curious phenomenon that we're actually rewarded for going into debt via credit card spending. You'd think with the banks facing a credit squeeze that they'd award prizes for staying debt free. But of course banks wouldn't make any money out of that. So instead we're incentivised to accumulate credit card debt in the hope that we won't pay off all the balance at the end of the month, thereby incurring interest and administration charges and making banks rich while keeping us poor.

You can make reward and cash-back credit cards work for you, but you have to be organised. A direct debit to clear the entire balance each month is the only safe way. For years I was collecting BA miles (a mile for every pound spent) on a British Airways Amex card. Better still once I had spent £20,000 I was awarded a 'Companion Voucher' to swap for a flight equal to the one I was redeeming. So you redeem say 50,000 BA miles for an economy trip to the US and get to take a partner too. All you pay is the taxes and charges on both tickets. At this point in the promotion you could take as long as you liked to spend the qualifying £20,000 - it took me 3 years of asking 'Do you take Amex?'

Then BA and Amex got wise and changed the rules - they'd literally been 'giving flights away'. Now you have to spend £20,000 in just 12 months (you can get cards where you qualify after half that spend - but those cards charge an annual fee - and who pays for credit when its so freely available?). Anyway my partner and I set out to do all our shopping on Amex for 12 months to see if we could manage the £20,000 target. If we failed we still got the miles - so the rule was no additional spending - just what we would have brought anyway.

Using Amex every time you make a purchase doesn't even raise an eyebrow. At the supermarket self-scan its just as easy to feed in an Amex card as a debit card and actually easier than feeding in cash. The bills only a couple of quid? It doesn't matter. "Amex? That'll do nicely."

In fact Amex isn't welcome everywhere. Norwich Union won't insure you with it, Tui won't take you on holiday. John Lewis only recently welcomed the card at their stores. Play.com don't, Amazon do. But remember the rule - no additional spending, so you must still take the lowest price you can find, regardless of the sellers' stance on Amex (otherwise the flights aren't quite so free are they?)

This morning at 4.30 am I received an email on my mobile (I love the O2 email to mobile which comes free with their broadband - but I haven't yet quite accounted for the people who email me while I'm sleeping - although to be fair O2 have thought of this with their various divert settings). Normally middle of the night messages are bad news - this was good news; I have just earned my companion voucher. Phew, we only had a week or so to spare. I don't know why 4.30 am was the magical moment. I wasn't even spending, I was sleeping. But somewhere a cyber transaction pushed me into reward land. (It reminds me of my first trip to Las Vegas where the Luxor Casino advertised 'Keno while you sleep' you could literally select numbers to play while you were in the land of nod).

So a year of driving up monthly debt has been rewarded. There was a time when you had to phone British Airways to book Companion Voucher reward flights. The BA sales staff were always sniffy. They were reluctant to carry out the lengthy searches necessary to uncover the scarce few freebie flights allocated. Fortunately BA has removed this final hurdle and now you can search for your own flights online. This is time consuming - but fun if the world literally is your oyster (well, as far as BA flies anyway).

Spending £20,000 on credit has been hard work. I think it actually makes me spend less. When the monthly bill arrives (aside from unavoidable business expenses) you're forced to re-live the purchases and trips which weren't really worth the expense. So spending everything on credit has been good discipline, but I'm not yet sure I'll be playing again next year.