Sunday, May 5, 2024

KOA Points - An Example Why Points Are Worthless

To get a "free" stay ($50) at a KOA you need 25,000 "points."  Each stay only "earns" you 1,000 points.

We are making plans for our summer trip.  We are spending one night at a KOA en route, to break up a long day of travel.  We don't stay at KOA's much as they are expensive, and like most commercial campgrounds, often place you chock-a-block next to another camper.

But they are handy in some situations.  You want a spot off the highway with a laundry and a nice site with a brick patio and barbecue grill - they have that.  But it can cost $70 a night, which, with my "geezer" pass is enough to spend three days or even a week at a Army Corps park - with a site on the water, away from fellow campers.

When we made our current reservation, they offered to "renew" our membership for $35.  I don't recall paying for membership in the past, and our "points" would roll over from year to year.  Now they expire unless you pay.  Since we don't stay at a KOA more than once or twice a year, it make no sense to renew.   Even the 10% discount would require we stay five nights or more, just to break even.  We're just not KOA frequent flyers.

I am not taking a piss on KOA here.  Their "rewards" program is designed to reward frequent flyers, not occasional users.  If you stay at a KOA for 30 nights a year, you will earn a free night stay (or the monetary equivalent thereof) as well as save over $200 on camping fees (minus, of course, the $35 membership fee). So, for Mom and Dad in their 45-foot bus motorhome, who spend all day inside watching Fox News and waiting for the grandchildren to arrive, well, it makes some sort of sense.

For people like us, well, not so much.

I recounted before how Mark signed up for "Hilton Honors" as we stayed at the Atlanta Hilton twice a year when he worked for the Lighthouse.  It made sense as we were "frequent flyers."  But once he retired, well, those points got used up or expired over time.  Ditto for airline miles - I got a missive from American, I believe, offering to preserve my miles from expiring - for a small fee.  I laughed.

Yet, a lot of people chase rewards points and cash-backs and don't bother to think about whether they are actually saving money or just attaching themselves unnecessarily to one brand.

When I was flying from DC to Silicon Valley once a month, it made sense for me to accumulate frequent flyer miles, and use them to try to wrangle an upgrade to business class.  In this era of over-booked flights, the concept of a "free flight" is largely illusory.  Besides, back then, I would book my flights a month in advance (round trip from SFO to IAD, "staying over" three weekends) and get fares as low as $199 a flight. Why waste miles on that, when they are better spent upgrading to business class?

But again, once I stopped traveling, it made no sense to hang on to the miles, and in fact, I had few left as I tended to use them as soon as they accumulated.

Like a gift card or gift certificate, I tend to use these things right away and get rid of them like a hot potato.  The gift card industry knows that a large percentage of cards are never used as idiots put them in a drawer somewhere to "save for special" and then forget about them.  Money is money, and no one stuffs a $100 bill in a drawer and forgets about it.  Well, at least I don't.  I had to break Mark of that habit, early on (as well as the habit of stuffing gift cards in a drawer).

If you are paying money to keep your "points" alive, consider carefully whether it is worth it.  In our case, $35 would have kept 3,000 "points" alive, which were "worth" only $15.   No savings there and we had no intention of staying 30 days more at a KOA this year.

I think companies are getting wise to this, which is why they charge fees to be members of a rewards points scheme. There are overhead costs associated with dormant accounts - which is why banks charge fees on dormant accounts - to drain them dry and close them.  But for "rewards" schemes, there is little point in letting someone accumulate points for several years, give them a 10% discount, and then a free night's stay, if they are only staying a few nights a year.

It is akin to the problem with online coupons and the like - offering windfall savings to buyers who would have bought anyway.  Bank of America offers me "deals" on things, and I have to click on and "accept" a deal to get the cash-back. Maybe subconsciously I end up buying from that merchant?  Perhaps, but I doubt it. I think mostly I just get the occasional windfall cash-back on gasoline or something.  I am not interested in a discount on UnderArmor, meal kits, or food delivery, as I never buy these things.

But getting back to KOA rewards points, I would rather shop on price than on rewards.  Because even the nicest KOA I have been to (and indeed, some are very nice!) pales in comparison to the great outdoors you can experience in a State or Federal Park, National Forest, or Army Corps Park.  Not only that, but they are a helluva lot cheaper as well!