Ahhh, points. They’re wonderful. Unlocking experiences once only dreamed about is incredibly satisfying — and that satisfaction is addicting. People take their love of points and... The post Is This Really The Right Way To Value Points and Miles?...
Ahhh, points. They’re wonderful.
Unlocking experiences once only dreamed about is incredibly satisfying — and that satisfaction is addicting.
People take their love of points and miles to crazy levels of spreadsheets, equations, multiple “players” and more, all in search of the next great score. But what is a “great” score?
For people taking “points and miles masterclass” type things online, it’s usually exotic first class flights dangled as the bait. And there’s a common equation offered up which is useful, but like many datapoints, fails to account for an entire picture of value.
Making matters worse that equation has created arrogance, obsession and even condescension, all of which are totally unnecessary in what should be a friendly hobby. Believe it or not, not everyone earns points to travel in luxury, and that’s totally fine.
Cents Per Point Value
When people get sucked into the world of points and miles, it’s impossible not to come across resources discussing “cents per point” to establish value. It’s a good thought and an important point of basic understanding. Learn it, if you haven’t!
When people use their points for things like magazines, or iPads, there’s typically not very good value per point offered. You’re not getting as much return on your spending as you could be.
A $1000 Apple iPad would likely cost 100,000 points or more. Assuming it cost 100,000 points, that’s one cent per point of value. Historically, the easiest redemptions carried the worst value, so that $1000 iPad might even cost 150,000 points in some programs.
Yes, people totally can — and often should — do better.
To illustrate the power of points, people counter that sub-par example with what a first class flight could give, in points value. A first class flight costing $15,000 might only cost 100,000 points too — so do you want $15,000 of value for your points, or $1000 for the iPad?
It’s a compelling hook and trust me, first class is really fun (!), but this simplistic view of what you could and should get is slightly flawed.
The new ‘Retreat Suite’ on the Virgin Atlantic A330neo bridges the gap between first and business.
Utility Of Points
Points are really about what they can do for you when you need them They’re also about what you “don’t” want to do. Sometimes it’s more about plugging a big part of a trip expense than just bragging.
Not everyone cares about luxury travel and not everyone wants to spend all their points, just to fly one way to Bangkok in first class. You’ve still gotta get back, right? For many people who don’t earn unlimited amounts of points, a great use of points is any chance not to use cash. Savings are savings. Travel is better than no travel.
Getting 5 nights of “free” hotel for a family might be a lot more useful than just one flight for one person. Same points cost, entirely more “value” to the mission, even if the “cents per point” value comes out oddly inferior to one person flying first class in that “cents per point” equation mentioned above.
Moving four people for free, versus not going at all, might be a lot more useful.
The point is that every single person has different needs and as long as people are operating with open eyes and a knowledge of the opportunity costs of their rewards — aka what they “could” be getting, there’s nothing wrong with any points redemption.
The only thing that’s not ok is not knowing what’s possible, and only finding out when it’s too late, after you’ve burned the mother load of points blindly. That’s just silly.
It’s good to know what “cents per point” possibilities exist — and to understand the concept — but only redeeming points when you can create a brag worthy example is just equally trite. I’ve done both and been equally happy with both.
Far less “sexy” redemptions, like premium economy round trip on the perfect dates might lend a lot more use than finding the odd date where a first class seat is available, and then needing to scramble to put together a ticket home, or need extra time off.
That’s even more true when it comes to travel on dates with no flexibility. Points are wonderful, but getting dates to line up perfectly is rarely a breeze during peak times.
What’s The Point?
The point is that knowledge is great, but there’s a far bigger equation than cents per point that makes all the difference. That equation is one only you can answer.
If money is tight, stretching points to cover more and more experiences, or enable experiences at all can be more optimal than a one off “brag” flight. Travel is cathartic and wonderful. If you only measure the value of your points in the cents per point redeeming them, you might’ve missed the entire point of earning them.
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