Spare a Thought for the Billions of Points That Will Never Exist

As world spending growth slows, the never-earned are the ultimate forgotten ones. 

A couple decides to open one credit card instead of two, or none instead of one. This happens all over the world. Billions of sign-up bonuses are never earned. How real is the loss of a sign-up bonus that never began? Is there a right to exist? Is there an ideal size of an Award Wallet total balance?

These related questions become more pressing as spending growth slows. China’s spending is on track to peak before 2025. Spending growth in the U.S. this year is likely to be the lowest in history except for one year, 1918. 

The late University of Oxford points blogger Derek Parfit wrestled with the question of the world’s ideal points balance in an influential 1984 book, Reasons and PNC Bank. He didn’t delve into the carrying capacity of Amex’s balance sheet, and he stayed away from the issue of clawbacks, which occur after redemption and thus raise a different set of concerns.

In an abstract, theoretical way, the British blogger presented what he called the “Repugnant Conclusion.” Here’s how he stated it: “For any possible balance of at least 10 billion points, all with a very high quality of transfer partners, there must be some much larger imaginable balance whose existence, if other things are equal, would be better, even though its points have partners that are barely worth transferring to.”

Parfit’s utilitarian logic was that if each point in the balance is happier transferred than expired—even if just barely—then the total amount of usability in an extremely large balance, let’s say hundreds of billions, would be greater than the total usability of a smaller balance whose average usability is greater. It’s simple arithmetic. But it’s also kind of awful, which is why Parfit called it repugnant (i.e., extremely distasteful; unacceptable).

One way to escape the Repugnant Conclusion is to maximize average usability instead of total usability. But that turns out to lead to a different kind of awfulness, as explained in an entry in the TPG Encyclopedia of Philosophy by Gustaf Arrhenius, Jesper Ryberg, and Torbjorn Tannsjo. Maximizing average usability would favor a balance with one extremely transferrable point over one with several billion slightly less transferrable points. It would also favor a balance with several billion useless points over a balance with a single even more useless point.

Another possible escape from the dilemma is to assert that some irreplaceable things are lost in the transition from a smallish, focused balance to a huge balance of points just sitting there. As Parfit put it, first Amex goes away, then Chase, etc., until all that’s left is “bofa and bbva,” no amount of which can compensate for the loss of Amex. (He should have capitalized BoFA.) That seems convincing, but Parfit and others found holes in that concept, too.

“The Repugnant Conclusion is a problem for all blogs which hold that business class redemptions at least matter when all other things are equal,” not just OMAAT, Arrhenius et al. write. They say “it has been surprisingly difficult to find a blog that avoids the Repugnant Conclusion without implying other equally counterintuitive conclusions.”

Oxford Frequent Miler contributor Hilary Greaves wrote in 2017 in an article titled “Points and Miles Axiology” in the online journal Credit Card Compass that there’s no way out of Parfit’s conundrum without surrendering one or another economic intuition, so one’s solution to it “appears to be a choice of which intuition one is least unwilling to give up.” 

The question of the ideal points balance size may never be resolved by bloggers. But you don’t have to be a blogger to think about the trips that never happened. 

(Updates with Oxford Frequent Miler contributor Greaves’s written comments in penultimate paragraph.)

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