Iberia accounts going negative and what we can take away from the promo

This past summer, Iberia ran what will unquestionably be known as the promo of the year: they offered 9,000 Avios per booking if you booked any Iberia flight (even cheap flights that were less than $20 each). This only lasted a few days, but you could have racked up 90K Avios for $200-$300 (or less if you got in early and went through a portal). The “catch” was that you had to use your promotional Avios by December 1st or you would lose them — and transferring them from Iberia to British Airways would not count as using them. In fact, Iberia warned early on that those who transferred Avios out of Iberia would see their balances go negative after December 1st. Reports indicate that they are making good on that threat — and in some cases, applying it in ways that don’t seem right. It’s messy. But in the end, I think we can learn a few lessons from the mess.

A messy situation

From the beginning, I advised against moving Avios to British Airways. Iberia ran an incredibly generous promotion and it was easy to come out ahead, even if you were only booking hotels with the Avios. While we knew that transferring to British Airways may be possible, it didn’t seem like a good idea for a number of reasons. First, Iberia has a program that can be pretty valuable in the right spots — if you have to connect on a domestic AA itinerary or you have a mixed-cabin redemption in mind, you can sometimes save a lot of miles over using British Airways Avios (See: From 11K RT on American: A sweet spot for North American flight redemptions and Searching for business class sweet-spots in Iberia’s OneWorld award chart).

But beyond that, anyone who used Iberia’s website to buy flights for this promotion and then search for award availability surely realized that IT is not Iberia’s strong suit, so it was hard to know what would happen to any unused or transferred Avios after December 1st. Early on, someone asked me what would happen if they already had Iberia Avios in their account before the promotion began. For example, let’s say that Joe Flyer already had 100K Avios in his Iberia account before this promotion . He then collected an additional 90K promo Avios through the promo. Iberia required that the promo Avios be used by December 1, 2018 or they would be forfeited. Let’s now say that Joe redeemed 90K Avios to book an award ticket during the promotion. How would Iberia determine which Avios were used to book the award?

There were a couple of possibilities:

1. The soonest-expiring Avios are used first, thus Joe used all of his 90K promo Avios, leaving him with his pre-existing balance of 100K Avios (this is the most customer-friendly interpretation)
2. Iberia follows a first-in, first-out policy where the oldest Avios in the account are applied first. That means Joe didn’t use any of the promo Avios (since his existing 100K balance was older and thus applied to his 90K redeemed) and Iberia would therefore debit Joe’s account by 90K Avios, leaving him with just 10K Avios.

But what if Joe didn’t book an award flight, but instead transferred Avios to British Airways? Would Iberia apply the same logic to transfers to British Airways that they apply to bookings? Let’s imagine that instead of redeeming for a flight, Joe transferred 90K Avios to British Airways applying the same logic as above:

1. The soonest-expiring Avios are used first. Thus, Joe transferred 90K and the promo Avios were the ones that moved since they expired on December 1st.
2. The first in, first-out policy applies where the oldest Avios in the account are applied first. That means Joe transferred 90K of his “old 100K Avios” balance.

That doesn’t make a big difference unless Joe both transferred some Avios and redeemed some Avios for flights during the promo period as it would be impossible for Joe to determine which Avios were applied to the transfer and which to the booking.

It’s not that one can’t figure out which Avios Joe would have wanted to transfer and which he’d have wanted to use — it’s counting on Iberia’s system to do that automatically that seemed ill-advised. My advice for the reader who asked about a pre-existing Iberia Avios balance was to transfer out any existing Avios before the promo Avios posted so as to avoid any confusion (preferably, you did this before you even booked the promo flights).

And of course, some people find themselves in Joe Flyer’s position. In fact, one Flyertalk member reports this type of situation (I’m filling in the blanks a bit as the story unfolded over several short comments in the thread, but this is the gist of it as I understand it):

• “Bob” had more than 90K Avios before the promo (let’s call these “200K old Avios”)
• Bob earned 90K Avios through the promo (new Iberia balance = 290K)
• Bob booked flights with 85K Avios during the promo (new Iberia balance = 205K)
• Bob transferred 198K Avios to British Airways (new Iberia balance = 7K)

Bob’s expectation was that his Iberia account would be debited for 5K Avios since he used 85K Avios. He expected that the 85K he used were promo avios and the 198K he transferred to British Airways were from his “200K old Avios” balance. Unfortunately, Iberia didn’t see it that way. They debited 90,000 Avios from his account, leaving him with a negative balance (-83,000 Avios).

In this case, it seems that Iberia followed interpretation #2 above: first in, first out. That is to say that they recognized Bob’s 85K redemption as having come from his existing “200K old Avios” balance and thus they determined that he didn’t use any of his promo Avios, so they deducted the entire 90K as being unused, putting his account far in the negative. Ouch. That seems awfully unfair (and it’s worth noting that the Flyertalk member reports having sent an email to Iberia in the hopes of getting it straightened out — and I hope they are able to do so).

Another somewhat similar report comes from ScienceTeacher on Flyertalk:

Yikes; this has become messy.

So my Iberia account had 90k in Avios go in, and 6k in Avios from Groupon. I made a redemption for 90k, and transferred the remaining 6k avios out to BA.

It seems to make the redemption Iberia took 84k in points from the bonus avios promo and 6k from the Groupon pile. Therefore I only redeemed “84k of the promo avios”.

The call centre were pretty damn rude stating; “I should have read the rules” and hung up. These Avios were clearly treated as a separate balance which is a shame as when I made the redemption there was no clear way to make sure it was these Avios there used!

In this case, I don’t know when the Avios came in from Groupon. If they were in the account before the promo Avios, the same logic would seem to be applied here as was to Bob above. On the other hand, if those Avios came in after the 90K promo Avios, it would seem that Iberia was treating any remaining balance in your Avios account as promo Avios. While I think some of the problems reported with this promo were avoidable, I’m not sure how a customer could have predicted which of their Avios would be used for a booking.

The above are far from being the only problems reported from the promo. Many people were left scrambling at the last minute to make a booking. It seems that the promo Avios expired at midnight Madrid time (12am in Madrid on 12/1). However, they didn’t immediately disappear from accounts — so some people were able to make bookings with the Avios after midnight Madrid time and then saw their balance go into the negative later on 12/1 or on 12/2 since they did not use the Avios before 12/1 Madrid time. I’m not at all surprised that Iberia was running this promo on its own local time, though it was never made clear in the terms.

Another problem: Iberia’s website is very much prone to errors. When I posted a reminder for readers to use their Avios, I noted that I was recently unable to use mine on a booking I wanted because the “system was down”. I was getting an error that said my cards were being declined (yes, plural – I tried repeatedly with different cards). When I called, the agent told me the system was down and I should try again the next day. I think some users ran into that same type of issue as the clock wound down on this promo — from reading comments sporadically during the promotion, it doesn’t sound uncommon at all. Iberia’s system is far from cutting edge.

So what can we learn from this one?

With a number of problems highlighted, what can we learn from the way this one has panned out thus far? Here are my takeaways:

1. When a promo sounds too good to be true, set expectations low. That’s for a few reasons: First, the companies than run too-good-to-be-true promos usually aren’t the most reliable (Google notwithstanding). Second, any hot promo on the Internet will be sought out by such a multitude of people so as to make competition fierce. I was pleasantly tickled when I found summertime business class availability on Iberia as I figured everybody and their mother, father, cousin, neighbor, dog, and pet chinchilla likely had 90K Avios to burn. There were never going to be as many available business class seats as there were 90K balances. That’s part of the reason I didn’t go in for a full 90K. I went in for enough to book my back-up plan figuring I could transfer in the balance if I got lucky and found those business class seats. Which brings me to #2…
2. Have a back-up plan. While most people likely wanted to book premium cabin seats with this promo, there were other options. In my case, I picked up enough points to book a route on AA that I travel a few times a year and often has easy availability. I also knew that I could use the Avios for a hotel booking and come out a bit ahead of my initial investment. A hotel redemption wouldn’t be ideal, but it would work in a pinch.
3. Be ready to follow up. Unfortunately, Iberia’s shoddy IT created a lot of problems for people on this. That required some people to follow up for months as to the status of their missing Avios. Many people will now have to follow up with Iberia about Avios they believe were incorrectly debited from their accounts.
4. Assume the most restrictive terms / interpretations. This goes along with #1, but it’s worth noting on its own. It’s not surprising that Iberia pulled this at midnight Spain time nor that accounts have gone negative. Neither is the apparent less-than-customer-friendly interpretation as to which Avios were “promo” and which were transferred/used to book/etc. That doesn’t make it sting any less for those caught off guard by an unexpected negative balance. It’s easy to play Monday morning quarterback, but I think the takeaway here is to assume the worst going in and protect yourself as best you can.
5. Accept that we win some and lose some. This was a pretty generous promotion. Thankfully, the investment to play on this one wasn’t overwhelming. Part of the reason I only went in for a few bookings rather than the max was because I picked an amount I was comfortable with losing if this fell apart. We win some and lose some – hopefully most readers came out ahead on this one. If you didn’t, there’s always another deal coming.

Bottom line

This promo was terrific for those who took advantage and leveraged it successfully. That said, it wasn’t necessarily easy and it ended up downright messy for some folks. Many people accepted that they might lose their Iberia account; others are hoping that a request for Iberia to delete all of their information (as per European privacy laws) will enable them to open a fresh account at some point in the future. Overall, I think the key takeaways are to go into this kind of promo with low expectations and stay well within the confines of the terms to avoid any nasty surprises. Hopefully most readers came out of this one with something more than they invested; sometimes that’s in the form of wisdom for the next promo.

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