People are selling Singapore Airlines miles online. Here’s what the airline says about that

When Tracy Ren decided to go to the 2024 Summer Olympics, she booked her flight to Paris on Singapore Airlines using miles.

But she didn’t earn them — she bought them.

Rather than purchasing miles directly from the airline, which sells 1,000 miles for around $40, Ren turned to Carousell, a popular online marketplace in Asia-Pacific that sells new and used goods — and, increasingly, loyalty points and rewards.

By purchasing miles online, “the cost is nearly 50% compared with purchasing the ticket,” Ren said.

Buying and selling airline miles online isn’t illegal, said Aaron Wong, founder of the travel and loyalty website The MileLion.

Nor does it violate Carousell’s terms of service. The company, which forbids weapon and cryptocurrency sales, told CNBC Travel via a representative that: “The governance of sale of airline miles and points depends on the Terms and Conditions … [of] the airline … Carousell is not privy to and not in a position to enforce these third-party agreements.”

This is where online sellers rule afoul of the rules, said Wong. Singapore Airline’s loyalty program terms state that “the sale or barter of KrisFlyer miles … is prohibited.”

“The question, then, isn’t so much about whether or not you can … but whether or not you can get away with it,” said Wong.

If any airline catches travelers buying or selling miles, the miles can be forfeited or their traveler’s loyalty account can be closed, he said. Separately, buyers also run the risk of losing their money to online scammers, he said.

Some sellers transfer credit card points directly to a buyer’s Krisflyer account, Wong said. The names on the two accounts need to match, he said, but added that “stuff falls through the cracks.”

A more common method is to name a buyer as a “nominee” under Singapore Airline’s KrisFlyer program, he said. Members can “nominate up to five individuals” they can redeem flights for using their miles, according to the program.

One Singapore-based KrisFlyer member who spoke to CNBC said he’s been using this method to sell his miles to strangers on Carousell — priced at $17 Singapore dollars ($12.75) per 1,000 miles — for the past year and a half.

The seller, who asked to remain anonymous to protect his identity at work, said buyers must share their passport details to be designated as a nominee.

“Since I have to have their personal details, I share my details with them as well. I share with them my proof of address …  my phone number,” he said. “It gives them additional comfort in case anything goes wrong.”

And things do go awry, he said. He’s twice had to intervene with tickets he redeemed for others, he said, including an instance where a buyer asked to postpone a flight on the day of departure.

“In that situation, it worked out pretty OK, but if he would have called me 15 minutes later, I would be in a meeting for an hour,” the seller said, adding that the buyer promptly paid the flight change fee as well.

He said Singapore’s small size and low crime rate make it easier to sell airline miles in the city-state.

“It’s a fairly compliant society. People usually do not take each other for a ride,” he said.

Another seller, who declined to give his name or allow CNBC to use his Carousell screen name, said he began selling KrisFlyer miles more than 10 years ago after amassing more points — mainly through credit card purchases — than he could use. Plus, he was always “being chased with the expiry,” he said.

His Carousell listing says he sells 1,000 miles for $15 to $25 — depending on the purchase method and number of miles bought. He had six “five-star” reviews for miles sales in the past month, with buyers raving about his “fast” and “hassle-free” transactions.

However, the first seller CNBC spoke to said he sells points for an entirely different reason — to buy flights for his family on cheaper carriers.

“Singapore Airlines ends up being a very expensive airline to fly, so I would rarely spend my own money to fly on [it],” he said. “You sell those miles, you get the funds, and the same funds are used for your other bookings.”

Plus, he usually books trips about six weeks in advance — by that time, redemption flights are usually sold out, he said. He also said he doesn’t buy products using KrisFlyer miles because “the arithmetic does not stack up.”

This seller told CNBC he doesn’t feel he is breaking any rules.

“The airline regulations say that the people need to be added as a nominee in my account,” he said. “There is nothing which I am doing which contravenes any terms and conditions.”

However, when asked about the sale of KrisFlyer miles on Carousell using Singapore Airlines’ nominee system, a representative said that the program’s terms “strictly prohibit the sale or barter of KrisFlyer miles, Elite miles, PPS value, rewards, award tickets, or other benefits.”

“Members who engage in such activities risk the cancellation of these benefits,” the representative said. “SIA collaborates closely with relevant authorities to monitor these platforms and will take decisive action against any member who contravenes these rules.”

That hasn’t stopped a cottage industry of “miles broker” businesses from cropping up online, said The MileLion’s Wong.

“Airlines would tend to focus more on the brokers, the bigger guys,” he said. “Carousell sellers know that too.”

He said the airlines try to prevent the sale of miles without making redemptions overly onerous for members “who play by the rules.” In the end, “they’re not really able to stamp it out completely.”

Wong suggests using services like Citi PayAll and CardUp, which allow users to earn miles from bills, rent and education payments.

“The irony that I see here is that you could do it — legitimately — for less.”