Sapphire scare

“Since this activity is prohibited, we have closed the account…”

One of the best features of the Ultimate Rewards program is that points can be moved freely from one account to another.  Families can combine points.  Individuals can transfer points to or from others.  But now such transfers can lead to trouble…

The problem is that transferring points to anyone other than your spouse or domestic partner is against Chase’s terms & conditions (bolding is mine):

Transfers may only be used to combine points/rebates belonging to the same individual or business in the Program; or for the purpose of enabling spouses or domestic partners to combine points/rebates earned in their respective names.

Despite these terms, Chase makes it very easy to transfer points to anyone, and people do so often.  Unfortunately, as reported on this FlyerTalk thread, Chase has started to crack down.  Some people who have transferred points in or out of their Sapphire Preferred accounts have received letters stating that their accounts have been shut down.  Here is an excerpt from one such letter:

Your Ultimate Rewards Redemption Rules do not allow the transfer of rewards points into your account from anyone other than a spouse or domestic partner.  Since this activity is prohibited, we have closed the account shown above

Luckily, Chase is giving people a chance to use or transfer their points (to a loyalty program or to another Chase card, for example) before closing the account completely.  Also, they appear to be closing only the one account that is effected.  Other cards (Freedom, Ink, etc.) owned by the same person have not been closed.

My view is that Chase is trying hard to crack down on people who have been buying and selling Ultimate Rewards points (and maybe they’ve caught some innocent people in the cross-fire).  Clearly, moving Ultimate Rewards points between unrelated people can be a red flag.  What’s unknown is whether Chase tracks transfers to loyalty programs.  For example, if I transfer my points into another person’s United Mileage Plus program (which I’ve done several times in the past!), would Chase flag that?  At this point, its too early to tell.  I hope that we’ll learn that such transfers are fine, but until we know more I plan to hold off on doing any more transfers like these.

About Greg The Frequent Miler

Greg is the owner, founder, and primary author of the Frequent Miler. He earns millions of points and miles each year, mostly without flying, and dedicates this blog to teaching others how to do the same.

More articles by Greg The Frequent Miler »

Pingbacks

  1. […] of thousands of points and then sell them to total strangers. You’ve probably heard about people who have had their Sapphire Preferred accounts closed by Chase for multiple transfers to other people. The terms and conditions clearly state that you should not […]

Comments

  1. Yes, transferring to someone else’s mileage balance is OK. I called to confirm this. The issue is transferring to someone else’s Chase account. This is more of a move to prevent 3rd party scammers, and of course to prevent the illicit activity of buying/selling UR points.

    • LR: Thanks for the info. I still wouldn’t take the word of a single customer service rep. The FAQ for point transfers says “You can only transfer points to a frequent travel account belonging to you, your household member or an authorized user or employee.” So, while they may not be policing it right now, you never know when they might begin to.

  2. Well what we need to see are reports from people that have ONLY transferred UR to UA or Hyatt accounts of other people. If we hear reports of those people getting shut down we will know to avoid either type of transfer (UR to UR or UR to UA/Hyatt).

  3. @Hoko, I sent 1,000 UR points from my account to a few of my friends’ United accounts and everything worked, some transfer took minutes, some took a few days. No problems from Chase. 1,000 points probably does not trigger any red flags, but if I were transferring 50K UR to United, Chase might get suspicious.

  4. Given that TPG regularly gives out prizes of MR and UR points (tranferred to a mileage program) and is in bed with Chase, I think it’s safe to say that these types of transfers are in fact all right.

  5. Sounds like Chase is looking for ways to make the Ultimate Rewards program ultimately suck. The ability to transfer to other accounts was a huge differentiator vs. the competition.

  6. @DJ, it works well, except that it costs money. It just depends on what miles you have and what miles you want. Do you know how the program works?

  7. If there’s any fault here, I’d say it’s the fault of people who don’t read and follow the terms and conditions. It doesn’t matter if everyone else is doing it. What matters is it’s against the rules, and you got caught.

  8. Grant, thanks for the reply. It’s was not quite clear to me, I guess these banks allow points.com to be the middle man? its like buying points without the usual annual cap on the normal purchase? any info will be appreciated.

  9. What makes one a domestic partner? I live in a lovely state which would do everything possible to prevent this “title” from being used. I would like to share points, but I am not sure if Chase would consider us “two dudes who live in the same house,” or if they would recognize us as domestic partners. Any insight?

  10. Looks like Chase has decided to transition the UR program to one that sucks. Eventually the FT/blog effect becomes large enough for an institution to realize they’re losing more money than necessary with a large group of individuals. The same effect made Citi devalue the formerly awesome TYP program. First they’ve started cracking down on OD abusers, now they’re hitting those who trade/sell UR points, the next move could easily be a reduction in the partner transfer ratio to something less than 1:1. I’m now weary of holding my large UR balance and will probably soon transfer some to United.

  11. @DJ, I believe this is how points.com works. You have 10,000 Delta miles and I have 10,000 United Miles. You post your offer on Points.com and if I like it, I accept your offer. The price you pay is based on what it would cost you to send your miles to someone else. If it costs $150 to send 10,000 Delta miles to someone else, that would be how much you would pay. If it only costs me $70 to send 10,000 United miles, that is how much I would pay. We both enter our credit card number (points.com has our account login and password) and they act as the middle man. I’ve only done this once, but I cannot remember if points.com has an added surcharge added to each side of the transaction. I think points.com just completes both offers at the same time, the result is you get my 10,000 United miles and I get your 10,000 Delta miles at the same time (usually takes 1-2 days for points to be withdrawn and posted). I think I am pretty close to explaining exactly how it works.

  12. Chase will change its terms sooner than later. People ought to act now to save what they have and not make them angry.

  13. @ #12 seva. Did you do 1-2 transfers with 1 person or many transfers with 1 person or did you do many transfers with many different people? Just trying to figure out if there’s any pattern Chase is looking for?

  14. Chase is such an interesting animal. It always surprises me how unilaterally they go after people when they crack down on a particular activity they don’t like… This one is kind of crazy given that CSRs told people it was fine to do. They really should have put up a warning online when you did the transfer and then only nuked people who ignored it.

    Nice that they are not closing all accounts. Sucks that they are stating that a record of what you did will be placed on your account forever. Hope it does not play into approving new cards too much…

  15. I’m looking for a bit of help from everyone…I am trying to adjust my credit cards to maximize my points / cash back based on my goals. I have a young family(two kids under 2) and just started using the blue cash preffered amex card and am getting lots of cash back via gift cards through grocery store purchases. After reading the bcp card will be changing the cash back limits, I need to rethink how I will maximize my rewards mid-september next year. I am looking for 2 things:

    1. A good alternative to the blue cash preffered once my spending becomes capped in about 8 months. Don’t think ink bold will work 🙁

    2. A good alternative to earn miles / hotel rewards. A bit of background…My hope is that I will be able to accrue enough points that 1) my wife and I can take a trip every year (airfare and hotel stay taken care of) or so to have a “little mom and dad time”, but more importantly enough points / miles so that when we go to Disneyland / world / travel we are have the hotel / airfare paid for or close to it. I use my amex to buy groceries / gift cards for 6%, but obviously sometimes I need to use another card for other purchases. This is where a second card comes in. I won’t use the second card much, maybe 10k in purchases a year, but I want something that will allow great points toward airfare AND hotels, flexibility is always a plus. I was looking at the venture, sapphire, spg cards, pro’s / con’s to each? Other cards that would better suit my needs?

    I know many of you have much more experience than I do. I was hoping to gain some or lots of advice on what credit card you think I should get. I REALLY appreciate all of your advice and feedback. I’m really beginning to enjoin this blog and community 🙂 Thanks in advance.

    • B-Rad: It sounds like your looking for a beginners guide so you can learn all the ins and outs of this game. If you haven’t done so already, consider signing up for my free newsletter (click here). I think you’ll find it helpful. As to a good replacement for the BCP, there are a few good alternatives: 1) Ink Bold/Plus (but you said that isn’t an option for you); 2) US Bank Cash+ (buy gift cards at department stores); 3) Citi Forward (buy gift cards at book stores); 4) The Chase Freedom card is a great all around card with its quarterly 5X bonus categories and the option to earn 5X or more on all small purchases when you combine the Freedom with a Chase checking account.

  16. Chase is pretty heavy handed. Data points from others dont always apply. Even buying gift cards might be an issue at some point. The way they usually act is all accounts you have are closed and they keep all points. I have never sold points BTW.

  17. I can’t say I have much sympathy for people who seem to want to constantly break rules or think they are entitled to things they aren’t.

    Many of us are just trying to get enough points for a trip once a year or every few years unfortunately others are trying to manipulate things and end up forcing companies to crack down on everyone.

  18. anyone else have data points of whether accounts have been shutting down lately in 2013? done it a few times with friends this year and havent had shutdown reports yet. maybe they are relaxing enforcement?

Leave a Reply

Your email address will not be published. Required fields are marked *