The power of online shopping portals
Background
There is an economic principle that I have always been intrigued by: incentive alignment. This is a gross simplification, but ultimately it’s the idea of structuring an economic relationship based on common goals or objectives that everyone involved can agree upon. It’s trying to structure things in a way where, as much as possible, it’s a “win-win” for all parties involved. Instead of “dog-eat-dog”, where every economic relationship involves one clear winner and one clear loser, can both parties sacrifice a tiny bit so that both come out on the other side better for the interaction? An example of this is when organizations use performance-based compensation, profit-sharing programs, or stock options, to motivate employees and align their efforts with the company's objectives.
Okay, nerd talk over. Ultimately, I bring it up because I believe online shopping portals are a quintessential example of incentive alignment. Shopping portals, also known as online shopping portals or cash back websites, are online platforms that provide a way for consumers to earn rewards, cash back, or other incentives when they make purchases from various online retailers. These portals serve as intermediaries between consumers and online stores, helping shoppers get additional value from their purchases, without paying more for a purchase and helping online stores to attract customers and increase sales through the portal's referral traffic. The portal itself earns commissions from retailers, making it a sustainable business model. Incentive alignment.
Which Shopping Portals are best?
Annoyingly, I will need to use a common answer I give to most questions that are asked in the points and miles game: It depends. It depends on your travel goals, how much time you want to devote to maximizing each purchase, if airline elite status is important to you, etc.
If you are the kind of person who likes to maximize every purchase, the person who clips every coupon, I would highly recommend that, before each online purchase you make, head over to Cashback Monitor and enter the name of the retailer.
Let’s say you are wanting to use your American Express Business Platinum $200 credit at Dell, so you enter “Dell” into the search bar and these are the results that populate for all of the major shopping portals:
For maximum value, there is nothing that compares to Rakuten in this case (more than 6% more than the closest portal!) However, for your next search for a different retailer, the highest value might be Swagbucks or the Wyndham shopping portal. So, it really has to be worth it to you, when it comes to time and complexity, to choose the highest value portal for every purchase!
For how much we like to save, and maximize our purchases, we also care even more about maximizing our time, so we have landed at only using two portals: Rakuten and the American Airlines Shopping Portal (AAdvantage Shopping). We choose Rakuten when the value is so oversized, like in the case of Dell here, but for most purchases, we default to AAdvantage Shopping.
Here’s our reasons why:
For every mile earned on the American Airlines Shopping Portal, you earn both American Airlines redeemable miles and Loyalty Points. Loyalty Points are how you earn status on American Airlines. I hold Executive Platinum status and am trending toward Platinum Pro status for next year, largely in part to purchases made in the portal. We use our status a ton, from complimentary Main Cabin Extra seats at booking, to first class domestic upgrades, to free checked baggage, etc. It’s a really valuable status for us, so earning Loyalty Points on shopping portal purchases is worth losing a bit of value from time to time in the cash back rate.
The AA portal routinely offers the same or higher points per dollar spent value than any other airline, hotel or transferable credit card currency portal.
We find American miles way more valuable (for both domestic and partner international flights) than the other major U.S. carriers (United, Delta, and Southwest). And it’s not even close. On top of that, American miles are more difficult to earn in bulk because they have no transferrable currency partners, unlike the other Big 3 airlines, so earning through the portal helps us keep our AA miles balance increasing.
How Shopping Portals Work
Here's a step-by-step explanation of how online shopping portals typically work, using the American shopping portal as our example:
[1] User Registration:
To get started, you’ll need to create an account on the AAdvantage Shopping website. This account will allow the portal to track and attribute purchases to you.
[2] Browse Retailers:
Shopping portals establish partnerships with various online retailers. These partnerships involve agreements where retailers pay the portal a commission or referral fee for driving sales to their websites. The American Airlines Shopping Portal has over 1,200+ stores they partner with (from Home Depot to Apple to Walmart to Best Buy to Marriott).
[3] Click-Through Action:
When you find a retailer you want to shop at (ideally, for something that you were already planning on buying!), you will click on the retailer's link or offer through the shopping portal. This action typically creates a tracking cookie that allows the portal to monitor your activity on the retailer's website.
If you are shopping on your phone, this is your only option to trigger bonus miles through the portal, as of now. However, if you are on a desktop/laptop computer, there is a much easier way to trigger a purchase in the portal. For the AA Shopping portal, you can download a Google Chrome browser extension that alerts you every time you are on a retailer’s website that is connected to the program. Here’s an example:
[4] Shopping as Usual:
Whether you have clicked-through from the AAdvantage Shopping website or activated through the browser extension, you are ready to shop as you normally would. And to clarify: you will NOT be charged higher prices than if you had just gone straight to the retailer’s website! You will see the same prices that you would have if you had gone straight to the retailer’s website!
You can add items to your cart, enter payment information, and complete your purchases. Everything will be tracked on the backend, you have not further work to do on your end.
[5] Confirm the miles
90% of the time, everything tracks as it should and you will see the purhcase on your “Transactions” page within a day, and often moves from “Pending” to “Confirmed” within 14 days, often way quicker. Then, the miles are credited to your Aadvantage account within 24 hours (or even sometimes before it changes to “Confirmed”).
However, there are a few times a year that I have to request missing miles. So, I do recommend you set a reminder to verify that the miles posted within 2 weeks. If they don’t post after 15 days, navigate to the “Contact Us” page and fill in all of the requested information:
As long as you stayed within the Terms & Conditions and you can see that you actually visited the retailer on the date of purchase on your “Recent Transactions” page, then I have never had an issue receiving credit after submitting a request.
You will likely not receive credit if you don’t see a visit to the retailer on your “Recent Transactions” and “Recent Store Visits” page. Be careful to click-through the portal before every purchase!
Conclusion
Over the past 2 years, we have earned 200k American miles making purchases on the American Airlines Shopping Portal, between Courtney and me. That’s easily 10+ domestic round-trip flights for non-peak dates. It’s almost 3 flights in Qatar’s Q-suites, one of the best business classes in the world, between the U.S. and the Middle East or Africa. All for making purchases that we were already going to make, like this dining room table from Home Depot:
This was during an elevated offer of 8 miles per dollar for select purchases at Home Depot!
There’s certain activities in the points and miles game that I don’t think are worth time, like filling out surveys, but adding one click for a purchase that you were already going to make? Definitely not one of them. And everyone wins! You earn the miles. More business is driven to the retailer. The portal earns commissions from the retailer. Incentive alignment.
