Is this really the right way to value points and miles?
Ahhh, dots. They are wonderful.
Unlocking experiences you once dreamed of is incredibly satisfying – and that satisfaction is addictive.
People take their love of points and miles to crazy levels of spreadsheets, equations and more, all in search of the next big score. But what is a “big” score?
For people who take “points and miles” type courses online, it’s usually exotic first-class flights as the bait. And there’s a common equation offered that’s useful, but like many data points, doesn’t capture a full picture of value.
Worse still, this equation has created arrogance, obsession, and even condescension, all of which are totally unnecessary in what should be a friendly pastime. Believe it or not, not everyone earns points for traveling in luxury, and that’s fine.
Value in cents per point
When people get sucked into the world of points and miles, it’s impossible not to come across resources that discuss “cents per point” to establish value. It’s a good idea.
When people use their points for things like magazines or iPads, there’s usually not very good value per point offered. You’re not getting as much return on your spending as you could be.
A $1,000 Apple iPad would likely cost 100,000 points or more. Assuming it costs 100,000 points, that’s one cent per point of value.
Yes, people absolutely can – and often should – do better.
To illustrate the power of points, people counter this mediocre example with what a first class flight might yield, in points value. A first class flight costing $15,000 may only cost 100,000 points as well. So do you want $15,000 worth for your points or $1,000 for the iPad?
It’s a compelling hook, but it’s flawed.
Usefulness of points
The points are really about what they can do for you when you need them. They are also about what you “don’t want” to do. Sometimes it’s more about paying a big chunk of a trip’s expenses than bragging.
Not everyone cares about luxury travel and not everyone wants to spend all their points just to fly to Bangkok in first class. For many people, a great use of points is no chance of not using cash. Savings are savings. Traveling is better than no travel.
Getting 5 “free” hotel nights for a family can be much more worthwhile than just one flight for one person. Same point cost, entirely more “value” for the mission, even if the “cents per point” value is oddly less than someone flying first class.
Moving four people for free, rather than not going at all, could be much more useful.
The point is that each person has different needs and as long as people operate with their eyes open and a knowledge of the opportunity costs of their rewards – i.e. what they “could” get, there is no There’s nothing wrong with redeeming points.
The only thing wrong is not knowing what’s possible and only knowing it when it’s too late. It’s just silly.
It’s good to know what the possibilities of “cents per point” are – and to understand the concept – but redeeming points only when you can create a bragging-worthy example is just as dumb.
Far less “sexy” swaps, like a premium economy round trip, could be far more useful than finding the odd date when a first class seat is available and then having to scramble to arrange a return ticket.
This is even more true when it comes to traveling on dates with no flexibility. Dots are wonderful, but getting dates perfectly aligned is rarely painless.
What’s the point?
The thing is, knowledge is great, but there’s a bigger equation than cents per point that makes all the difference. This equation is one that only you can answer.
If money is tight, stretching points to cover more and more experiences, or allowing experiences may be more optimal than a one-time “bragging” theft. If you only measure the value of your points in cents per point when redeeming them, you may have missed the whole point of earning them.