Free If You Use It, Pay If You Don’t

Recently I redeemed some of my Hilton Honors points for a free night’s stay in East Brunswick, N.J. (Stop snickering; I had good reasons.) The confirmation advised me that no-shows or too-late cancellations “will be charged one night’s room and tax at the hotel’s Best Available Rate for that date.”

Excuse me? If I use the room, it’s free, but if I don’t show up, I get charged the “best available rate?” This, by the way, is not the actual best available rate, but it’s the best one they want to give to anyone who does not qualify for a deal like those available to AAA or AARP members, or to the government, the military, the clergy, or other homo sapiens who are able to negotiate a better bargain.

I have never had problems with reading comprehension, but I figured this could not possibly mean what I thought it meant. So I asked my associate, Amy Laburda, to make a few calls.

It turns out that Hilton runs its hotel rewards program a lot like the S&H Green Stamps that I remember from my childhood. You have to print the rewards certificate and present it at the hotel front desk; otherwise, the hotel (many of which are run by local franchisees, not Hilton corporate headquarters) does not get paid. Since Hilton does not pay the hotel in the event of a no-show, the hotel reserves the right to charge the absent guest. These policies are not accessible until you are well into the process of booking the room online.

Every Hilton hotel (including the Hampton Inn, Embassy Suites, Hilton Garden Inn and Doubletree brands, among others) has a computer and a fax machine. The certificate is sent to the customer by email in the first place. Is Hilton serious when it says the hotel cannot get a copy of the rewards certificate if the customer does not hand-carry it there? If all else fails, have they never heard of Federal Express? Or the Postal Service?

Amy politely asked the Hilton rep if this is about the convenience of the hotel. Not convenience, no, he said, clearly a little uncomfortable. He got off the line to consult a supervisor, and returned to say, basically, that it is what it is.

Hilton is not alone. Hyatt’s Gold Passport program has a similar clause, lodged in the terms and conditions of the program. Mariott Rewards’ website doesn’t address the cancellation policy for its rewards program at all. According to the customer service associate Amy spoke with on the phone, the policy is determined by each individual hotel, but he believed that, in general, the customer would be charged one night’s room and tax, though as with the other programs, the reward points remain untouched.

I imagine that a lot of people are not especially pleased when they find hefty, unexpected charges on their credit cards after a last-minute change in travel plans causes them not to use a room they were not supposed to pay for in the first place. Since the point of a brand loyalty program is to create brand loyalty, this strikes me as counterproductive.

But what do I know? I never collected trading stamps.

About Larry M. Elkin 533 Articles

Affiliation: Palisades Hudson Financial Group

Larry M. Elkin, CPA, CFP®, has provided personal financial and tax counseling to a sophisticated client base since 1986. After six years with Arthur Andersen, where he was a senior manager for personal financial planning and family wealth planning, he founded his own firm in Hastings on Hudson, New York in 1992. That firm grew steadily and became the Palisades Hudson organization, which moved to Scarsdale, New York in 2002. The firm expanded to Fort Lauderdale, Florida, in 2005, and to Atlanta, Georgia, in 2008.

Larry received his B.A. in journalism from the University of Montana in 1978, and his M.B.A. in accounting from New York University in 1986. Larry was a reporter and editor for The Associated Press from 1978 to 1986. He covered government, business and legal affairs for the wire service, with assignments in Helena, Montana; Albany, New York; Washington, D.C.; and New York City’s federal courts in Brooklyn and Manhattan.

Larry established the organization’s investment advisory business, which now manages more than $800 million, in 1997. As president of Palisades Hudson, Larry maintains individual professional relationships with many of the firm’s clients, who reside in more than 25 states from Maine to California as well as in several foreign countries. He is the author of Financial Self-Defense for Unmarried Couples (Currency Doubleday, 1995), which was the first comprehensive financial planning guide for unmarried couples. He also is the editor and publisher of Sentinel, a quarterly newsletter on personal financial planning.

Larry has written many Sentinel articles, including several that anticipated future events. In “The Economic Case Against Tobacco Stocks” (February 1995), he forecast that litigation losses would eventually undermine cigarette manufacturers’ financial position. He concluded in “Is This the Beginning Of The End?” (May 1998) that there was a better-than-even chance that estate taxes would be repealed by 2010, three years before Congress enacted legislation to repeal the tax in 2010. In “IRS Takes A Shot At Split-Dollar Life” (June 1996), Larry predicted that the IRS would be able to treat split dollar arrangements as below-market loans, which came to pass with new rules issued by the Service in 2001 and 2002.

More recently, Larry has addressed the causes and consequences of the “Panic of 2008″ in his Sentinel articles. In “Have We Learned Our Lending Lesson At Last” (October 2007) and “Mortgage Lending Lessons Remain Unlearned” (October 2008), Larry questioned whether or not America has learned any lessons from the savings and loan crisis of the 1980s. In addition, he offered some practical changes that should have been made to amend the situation. In “Take Advantage Of The Panic Of 2008” (January 2009), Larry offered ways to capitalize on the wealth of opportunity that the panic presented.

Larry served as president of the Estate Planning Council of New York City, Inc., in 2005-2006. In 2009 the Council presented Larry with its first-ever Lifetime Achievement Award, citing his service to the organization and “his tireless efforts in promoting our industry by word and by personal example as a consummate estate planning professional.” He is regularly interviewed by national and regional publications, and has made nearly 100 radio and television appearances.

Visit: Palisades Hudson

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