I love where my miles and points have taken me and will take
me. Others love to use their miles for less than optimal value. I have a co-worker
who boasted of his 200K Amex Membership Rewards points. That’s a nice enough balance
of Amex points. Where this becomes a horror story is how he chose to use his
points.
Be sure that women and children are not present when you
read the next sentence. He redeemed 115,800 MR points for an iPad Air….
Result: $369 value/ 115,800 MR points = $0.003 per point
value.
Now that those words have had a minute to sink in, let’s
review how egregious a redemption this really is. Doing some quick searching on
the Amex Rewards site, I see that you can redeem MR points for a variety of
retail gift cards, including Staples. Doing some further searching, I found the
same iPad Air on sale at Staples for $369. You can redeem for gift cards in $25
increments, or in this case, $375 of Staples gift cards. The redemption rate is
a penny per point, so for $375, it would cost 37,500 Amex points. One further
advantage is that you can purchase the iPad Air online through a shopping portal
and earn extra bonus points, even when using a store gift card for your purchase.
Summary: save 78,300 Amex points, and earn 740 Chase UR points
through the shopping portal.
Net Result: $369 value/36,900 MR points = $0.01 per point
value (PPV).
Under the right circumstances, Amex points can be transferred
to travel partner programs and be redeemed at a rate greater than 2 PPV. An easy
example would be to transfer 25K MR points to Air Canada’s Aeroplan program and
redeem for a coach class flight from any point in the US or Canada to any other
point in US or Canada, such as New York to Vancouver. For the below flight, you
would be redeeming at a 3 PPV rate, 10x better redemption rate than the iPad
Air.
Try as I might, my co-worker was not to be dissuaded from his prize. He proved
the biggest point about this hobby, that points and miles are only as valuable
as the user wants them to be.
Awesome analysis!
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