Put simply, using miles for merchandise is generally a horrible deal versus using your miles for travel.
Airlines Are Happy To Send You Fancy Electronics In Exchange For Your Miles
Most loyalty programs are happy to let you burn your miles on merchandise. But if you run the numbers, you’re getting a horrible deal. And during this pandemic, airlines may not have devalued award charts (yet) but they have raised prices in their miles for merchandise shops.
I’ll give your three examples, which I did not cherrypick. Rather, these are three items I am personally interested in and wanted to compare pricing.
A new MacBook Air from United with 256GB of storage will run your 333,000 miles.
The cost from Apple? $999.
333,000 miles for a $999 product gives you $0.003 in value per miles, far less than once cent per mile.
How about AirPods Pro to go with the new computer? United wants 83,000 miles.
The cost from Apple? $249. Again, that’s only $0.003/mile.
One more. Maybe it’s just Apple? How about some Bose QC35 noice-cancelling headphones? United wants 117,500 miles.
Bose charges $299 right now. That’s an even poorer value at $0.0025 per mile. Even at regular price ($349) you are still getting less than $0.003 in value per miles.
When It Makes Sense To Buy Merchandise With Your Miles
There are three instances when it may make sense to burn your airline miles for merchandise:
- During limited promotions (not going on now) where you can extract more than 1.5 cents per mile in value
- If you are points rich and cash poor
- If you do not intend to travel
Now that last point, I really don’t understand why you would bother ever putting airline spending on a travel card if you don’t like to travel unless you are booking travel for other people.
Once in a while it may make sense due to bonus promotions to redeem your miles, but certainly not now.
Cashback Cards: A Better Alternative
This isn’t rocket science. If it this kind of merchandise you are after, please use a cash back credit card that provides you a far better bang for your buck. If you’re buying Apple products, the Apple Card from Goldman Sachs offers 3% cash back on Apple purchases and that is an instant rebate.
Other debit cards may offer between 1-3% cash back on purchases, depending upon the category. Doesn’t that make more sense than getting less than 1/3 of a cent per point?
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CONCLUSION
Airlines like United have taken advantage of the uncertain era in which we live to devalue what a mile is worth. If you intend to travel, don’t waste your miles on merchandise. If you don’t, you should not be collecting airline miles except when you fly. And if you happen to just have miles built up that you want to burn, I still cannot recommend blowing them for such a poor exchange rate.
Agree on this one. I just can’t wait to see if the AMX Delta miles and Hilton points will get a bump in offers as those miles/points have been sold to AMX at a discount. Any idea when this may happen? Currently, there aren’t any offers on the AMX Delta cards and I believe one should be coming up at the end of this month (has been in the past between offers)?
Your back on Matthew! Lately, you have some good and interesting articles!
I wonder if any flyer would be that naive to use miles for those merchandises. And if that is the case which nobody would be that silly, then why United keeps the site opened (site maintenance costs, agents…)?
“333,000 miles for a $999 product gives you $0.003 in value per miles, far less than once cent per mile.”
ONE cent per mile, not once cent.
I generally agree with the sound advice in this article. Everyone’s personal circumstances are different however, and if you were sitting on so many miles or points you wouldn’t know what to do with them and you were trying to conserve cash at the moment, I suppose it could make some sense *in your situation* to redeem those for goods. Though it would still be worth exploring the value proposition for redeeming for gift cards instead as you are then not tied to a particular place of sale and can take advantage of any retail promotions or discounts.