The last thing that Kansas City businessman Richard L. Clipp wants for his vacation is a free airline ticket. Clipp, 41, who flies about 300 days a year for his consulting business, doesn't want to step near an airplane when he gets time off, even if he is offered a free ticket to Paris, Rome or the Caribbean.

So when he earns free flights through the increasingly popular airline "frequent flier" programs, Clipp immediately turns to Agco in Silver Spring, the oldest airline coupon brokerage in the country, to trade his bonus mileage for cash.

"When I have the choice of a free airline ticket or $400, I would rather have the cash," said Clipp. "After traveling all the time, I just want to sit with my family by the fireplace when I have three weeks off. I'm not interested in going anywhere."

Clipp is one of thousands of travelers who play the gray market of airline bonus awards and cash in their air miles for dollars.

Discount dealers buy frequent-flier tickets from passengers who have earned them -- with the price varying depending on supply and demand, what the airlines charge for the equivalent ticket and how much the dealer thinks the ticket will sell for on the open market. The dealer adds his profit and then resells the tickets to bargain-hungry travelers at a price that is still well under the airlines' fares.

A frequent-flier bonus is an increasingly popular free ticket that an airline offers when a traveler has accumulated a certain mileage on its carriers. The airlines sometimes award extra miles to promote particular flights, auto rentals or hotel accommodations.

When a frequent flier reaches a certain mileage level, he can accept the bonus ticket or continue accumulating miles to a higher plateau. Most coupon sellers have earned more than 100,000 miles, which usually means extensive free travel.

American Airlines introduced the first such discount, AAdvantage, five years ago to woo customers and ensure passenger loyalty, and the other U.S. airlines followed suit. A Game of Supply and Demand

Coupon brokers estimate that there are about seven to 10 million travelers enrolled in airline frequent-flier programs, with most belonging to two or more plans. A significantly fewer number actually win the bonus awards each year, and the coupon dealers handle only 1 to 2 percent of those bonus tickets.

Brokers make most of their money from the long-distance, first-class tickets, which they sell for between 50 and 70 percent less than the airlines, said Alan Gross, 49, the owner of Agco, located in Woodmoor Shopping Center on Colesville Road.

"A typical buyer is someone who is wealthy but frugal," said Gross, a University of Maryland psychology professor turned coupon jockey. "And a typical seller is someone who flies almost every week, and the last thing he wants to do is fly on his vacation."

A seller with enough points for a round-trip ticket from Washington to London might get about $1,000 at this time of year, and Gross would mark that up to about $1,390. The same ticket might cost about $4,000 if bought directly from the airlines.

A first-class round-trip ticket to Tel Aviv, Hong Kong or Tokyo costs about $1,795 from Agco, while it runs close to $5,000 if bought directly from the major airlines, Gross said. Prices increase when the market heats up in the spring and summer, coupon brokers say.

The airlines, which are being undersold, tolerate coupon brokers who deal in the discount tickets, but they certainly don't endorse them.

"The airlines don't look upon this business too kindly," said Vincent G. Ayarza, 32, co-owner of Travel Discounts International, a New York travel firm that trades airline coupons.

"Brokering our tickets is a violation of the agreement under which travelers join our program," said Joe Stroop, a spokesman for American Airlines, which operates the AAdvantage frequent-flier program. "We don't like coupon brokers and discourage them."

"We aren't especially pleased with them, but we know they exist," said Lynn Small, the manager of United Air Line's "Mileage Plus" program, which began operating in 1981. "There's nothing you can really do about it."

United did do something last week about one family that the airline said violated its frequent-flier regulations. United bumped the Howard Landau family, of New Jersey, from its program after it said that Landau had his children fly on tickets listed in his name to run up mileage. In reaction, Landau has filed suit to force United to honor his vouchers and to allow him to accumulate more bonus miles.

The coupon-brokerage business, however, apparently is legal, and since 1981 about eight companies have sprung up across the country to barter and trade the frequent-flier passes.

"The airlines have ruffled our feathers on a couple of occasions," said Ayarza of Travel Discounts International in New York, whose business has doubled over the last two years. American and Delta Air Lines wrote Ayarza, warning that they disapproved of coupon brokering, he said.

Ayarza and other coupon brokers, which run private companies, won't discuss their revenue or profit and won't divulge the volume of their business except to say that they lure thousands of customers a year.

Alan Gross first got into the bonus barter business seven years ago when he taught psychology at the University of Maryland and was planning a vacation to California.

After hearing that United Air Lines was giving away half-price discount vouchers to its passengers, Gross raced to National and Dulles airports with a friend to buy the coupons from travelers coming off the planes.

Realizing that he had bought more vouchers than his family or friends needed, Gross placed an advertisement in the newspaper to sell the remaining coupons. He was immediately barraged with phone calls from bargain-hungry travelers.

So when the airlines began offering frequent-flier coupons a few years later to promote passenger loyalty, Gross knew there was an untapped and lucrative market for an imaginative entrepreneur. Launching a small business out of his home in Silver Spring, Gross placed ads in newspapers across the country to buy and sell frequent-flier tickets.

Coupon brokers spend heavily on advertising, usually without naming the airline involved. Gross shells out about $200,000 a year for ads in travel sections of newspapers and business and travel magazines.

What started as a lark for Gross is now a multimillion-dollar airline coupon brokerage, the only in this area and one of the largest in the country, with several thousand customers a year. Most of his business is generated from New York, Chicago, Dallas and Los Angeles, with only 10 percent of the sellers and 5 percent of the buyers from the Washington area.

"Although Washington is not a big frequent-flier town, a number of senators and congressmen who fly to their districts frequently have bought and sold from us," Gross said.

Airline tickets are technically nontransferable, so the broker makes sure that each ticket is issued in the passenger's name, not the coupon collector's name. When traveler Clipp sells a ticket to Agco, for example, Agco sends him the money for the ticket in advance.

Clipp then sends Agco his frequent-flier claim form, and when Agco finds a buyer the name is filled in and sent to the airline. After the airline returns the award to Clipp, the original frequent flier, he transmits it back to Agco.

On average it takes about two to three weeks for a coupon transfer, Gross said, although it can take as long as a month. Agco also sells discount coach tickets, which can be purchased on a day's notice, although Gross says that they are only good deals if a traveler can't get a "super-saver" fare.

Sometimes coupon brokers will pay all or part of the tab for a passenger's airline ticket until he reaches the peak number of mileage points. A few years ago, Agco took advantage of an American Airlines special promotion by paying for several hundred customers to travel to Disneyland on a free trip to accumulate frequent-flier tickets.

Agco then marked up and sold the tickets to Hawaii, cheaper than the major airlines would sell them, and made a profit of about $5,000. "It wasn't a get-rich scheme. But it sure was fun," said Gross, who is planning to ease out of the coupon brokering business soon to work on a project about the psychological differences between friendship and romance.

"I've never had more fun making an honest living than doing this," agreed Ayarza of Travel Discounts. "It is an exhilarating business."

One drawback with frequent-flier coupons is that they can't be used during certain airline "blackout" periods -- times of the year like the holidays and heavy seasons when the bonus tickets aren't accepted. Delta, for example, has a summer blackout period from June 16 to Sept. 30 for frequent-flier tickets to Europe.

Many airlines prohibit the transfer of frequent-flier tickets outside of the family, but airline officials say that they do not check. "Our rules say that the tickets can only be transferred to family members," said Small of United. "But we don't ask for your genealogy when you check in."

Pan American World Airways coupons are the only ones that brokers won't touch because they can only be used by the traveler who earns them and a traveling companion.

Prices and availability of these awards from the brokers change frequently, depending largely on supply and demand. "There are peaks and valleys for selling these awards," said Clipp. "Last year, I could get the most when I sold the coupons in February and August."

When Clipp cashes in his frequent fliers, he earns about 1 cent a mile. Although he would not disclose how much money he made from selling frequent-flier coupons last year, Clipp will receive about $3,300 from coupons totaling 330,000 miles that he has accumulated from four airlines and plans to trade in. IRS, Corporations Taking a Look

Both coupon sellers and brokers are worried about the Internal Revenue Service's recent interest in the frequent-flier program. The IRS is seriously considering taxing the free flights as fringe benefits, according to IRS Commissioner Roscoe Egger, and has solicited comment on how the bonuses should be reported.

One problem for the IRS would be in valuing the airline awards when they involve discounts on merchandise, car rental and hotel rooms, Egger said. Another problem would be in determining whether the bonuses were the result of business or personal travel.

Brokers also worry that corporations are beginning to clamp down on the use of frequent-flier awards by their employes. "When the corporation is paying for the business trip, some may not want their employes using the free miles for their personal vacations," said Gross.

Although some critics speculate that stricter corporation rules along with possible taxes on frequent-flier tickets signal the end of the broker business in years to come, fliers and brokers disagree.

"The broker business is here to stay," said Ayarza of Travel Discounts. "Even if they tax the frequent-flier bonuses, we'll still be helping travelers find a way to save on first-class tickets in a deregulated industry."

Ayarza already has diversified, with 10 percent of Travel Discounts' business done by using "clever pricing tactics," manipulating tariff rules and selling tickets in foreign currencies.

When Ayarza wants to save money for a passenger on a first-class ticket from New York to London and there are no frequent-flier coupons to trade, he tickets the traveler to Johannesburg via London, and then sells the tickets to him in South African currency, rands.

"The traveler never goes to Johannesburg, but a ticket to South Africa, sold in another currency, with a 'stopover' in London is 30 to 40 percent cheaper," Ayarza said.