Remember when Lee Iacocca, then Chrysler Corp. chairman, personally was pushing his company's cars, trying to avert more red ink, additional federal bailouts and perhaps a "for sale" sign on company headquarters outside Detroit?
One of ol' Lee's best lines in peddling his products was "buy a car, get a check." The birth of auto industry rebates was at hand.
Today, the "giveaway" craze has expanded into "buy a whatever, get a bundle of frequent (airline) flier miles." Furniture stores, restaurants, roofing companies -- even lawn service firms -- will give you miles for dollars. American Broadcasting Corp., now under the control of Mickey, Minnie and Donald, is looking at a miles-for-hours-of-viewing swap.
The latest deal for free airline miles involves the buying, selling and financing of the largest purchase most of us ever will be involved with: a home. American Airlines, which 15 years ago this month got the frequent-flier-miles campaign airborne, has signed a deal with PHH Real Estate Services that could make the phrase "buy a house, get a vacation" a part of America's vocabulary.
By calling a toll-free number, you can get a list of participating real estate brokers and lenders doing business in areas throughout most of the country. I said "most" states because the one we live in prohibits rewards for doing things like buying and selling homes. Thus, that part of the American-PHH program is off limits -- unless you sell a home here and purchase in another state, using the participating real estate types, in which case the purchase would be eligible.
The deal developed because American realized home mortgages was an untapped, potentially huge, market for peddling its frequent-flier program.
"We had some consultants who we had done work with approach us with the idea of offering such a program," said American spokesperson Al Marucci. "We felt it fit well with our AAdvantage program.
"American was looking at doing a mortgage program, and we recognized there was a real estate piece," said Roger Aylward, public relations manager in Danbury, Conn., for PHH Real Estate Services.
Under the AAdvantage Program for Mortgages, Empire State style, every dollar of interest paid on a mortgage issued by one of the participating lenders in the program is worth one frequent-flier mile.
For example, let's say you finance, or refinance, a $150,000 mortgage at 8 percent for 30 years. In a 1-for-1 deal, during the first year you will pay $11,954.72 in interest and be rewarded with 11,954 frequent-flier miles.
Five lenders currently are involved in the program -- PHH Mortgage Services, Great Western Bank, HomeSide Lending, California Federal Bank and Downey Savings and Loan.
If you call the AAdvantage Program for Mortgages' toll-free number, (800) 852-9744, you'll be given the names of no fewer than three mortgagees working New York State -- Great Western, HomeSide and PHH Mortgage Services. You also can join the AAdvantage program, get additional information, etc. by making the free call.
"When you call, you get a list of three lenders who all are competing against each other," Aylward said.
Using the mortgage program carries a $39 yearly fee designed to cover administrative expenses, Marucci said.
The potential benefit to American is immense; if the carrier can tap just a small percentage of the mortgage lending and home buying and selling that occurs yearly nationwide, it's big, big money.
"In the first few days of the program, even without advertising, we've had a few thousand calls," Marucci said. "We're encouraged by the initial response."
Obviously, this isn't American's first foray into mileage giveaways; the Fort Worth-based airline giant started first with so-called travel partners, such as hotels, car rental firms and credit card purveyors.
That has blossomed into all manner of "grounded" free mileage sellers, and into a lucrative business for American and the other big airlines. Miles are sold to companies for 2 cents each in 500-mile increments to customers. A 25,000-mile free round-trip domestic ticket earns the airline $500 -- and costs American just $92.50 to honor.
Not a bad deal.