Put to the test: Redeeming miles for merchandise

A recent trend in mileage awards is for airlines to offer merchandise that can be bought with miles. This is welcome news to frequent flyers, who have been begging for alternative awards to free flights. But is buying merchandise with miles a good deal? I put three airlines’ programs to the test.

United’s Mileage Plus Merchandise Rewards

United’s elite members and Mileage Plus Visa cardholders can take advantage of an exclusive redemption opportunity with Mileage Plus Merchandise Rewards. Members can redeem as few as 4,000 miles for cameras, jewelry, kitchen appliances, luggage, and other products.

I priced out three awards in different categories to see if United’s mile prices were a good deal. The first item was a three-piece kitchen set (food processor, toaster, and coffee grinder) by KitchenAid. United is charging 40,500 miles for the appliances. If a mile is valued between one and 1.5 cents, the dollar value of this award is between $405 and $608. When I priced the items separately on Amazon.com (I couldn’t find a comparable set), the total came to $365. Not a bad deal, but you’ll still save by purchasing the kitchen set with real money.

Next, I found an Olympus digital camera for 53,500 miles. The dollar equivalent was between $535 and $803. But, the same camera on Amazon cost only $250, less than half as much. If you redeemed miles for this product, your miles would be worth less than half a cent each—truly a bad deal.

I tried one last item, this time a Sony PlayStation Portable bundle. United will give you this portable game player for 58,000 miles, but Amazon will sell you a similar package for $250. At one cent a mile, United’s award price is valued at $580, again more than twice as much.

Clearly, if you want to get the best value for your miles, you should not redeem them through United’s Mileage Plus Merchandise Rewards. You’d do better redeeming your miles for flights and buying your kitchen appliances and cameras with money. However, if you have thousands of miles you never plan on redeeming for flights, you can get some pretty neat stuff from United.

Frontier’s More Store

Frontier’s More Store gives the low-cost carrier’s elite members the opportunity to redeem miles for merchandise, event tickets, or vacations. Most of the juicier things are auctioned off, so an item’s value depends on what the final bid is. However, you can trade miles for some products outright.

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I looked at two such items. First, I found a $100 gift certificate to eBags. Frontier offered this award for 5,000 miles. Given that 5,000 miles is worth $50 to $75, you’re getting a savings of at least $25.

The second product was equally appealing. A $50 gift certificate to the restaurant L’Atelier in Boulder can be had for 3,000 miles. The value of the miles is only $30 to $45, so redeeming this award is definitely a good buy.

Frontier’s More Store seems reasonably priced. It’s too bad more flyers can’t take advantage of the offerings. If you are a Frontier elite member and wish to bid on one of the items, you’d be wise to calculate the value of the prize in miles and bid no more than that. Simply divide the cost of the item by 0.01 or 0.015, and you’ll find the range of miles that represents the upper limit of good value for that award.

Continental’s Miles for Merchandise

Continental says you can save up to 50 percent off the retail prices in its Miles for Merchandise program when you pay a combination of money and miles. For all of the products I saw, payment is always 100 miles plus a dollar price. This program may not be a great way to get rid of miles quickly, but it does offer some good shopping deals.

I first looked up a Hartmann Hudson Collection soft duffel bag. On Amazon, the bag can be purchased for $455, but Continental offers it for $278 plus 100 miles (with no extra shipping cost). Given that 100 miles is valued at $1 or $1.50, that’s a huge savings.

A 10-piece knife set by Anolon costs $250 on Amazon. On Continental’s Miles for Merchandise, you can buy the same knives and block for $179 and 100 miles. A Samsung digital audio player had roughly the same price on Amazon and Continental. While you should always do a price comparison before buying any product, definitely consider Continental’s Miles for Merchandise if you have a few hundred miles you’re not using for flights.

Who passed the test?

Clearly, Continental and Frontier passed the test, while United did not. Don’t rule out any of these sites if you have miles you’d rather redeem for merchandise or discounts. However, you should always do a price comparison against online and brick-and-mortar retailers to make sure you’re getting good value for your miles. Then again, if you never plan on redeeming your miles for flights, you’ll get better value by turning them into physical items, rather than letting them expire in your unused account.