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Due, presumably, to the difficulty in booking frequent-flyer award seats during the upcoming summer travel crush, I’ve received several queries in the past few weeks that boil down to this: Is it worthwhile redeeming my miles for non-flight awards?
The short answer: No. The best use of frequent-flyer miles is almost always cashing them in for flights or upgrades.
The economics are straightforward. The cost to the airline of giving away a seat that would have gone unsold anyway is negligible. As a result, a ticket with a published price of $500 can be had for 25,000 miles. It’s cost effective for the airline, and the program members gets 2 cents in value for every mile redeemed.
But when it comes to offering consumer electronics or hotel room nights as awards, the significant out-of-pocket costs mean the airlines must charge more miles to keep their books balanced.
So, for example, members of United’s MileagePlus program would have to pay 56,400 miles for a Callaway X2 Hot Driver golf club, widely available online for around $330. That’s less than 1 cent per redeemed mile.
A Roku 3 media player, available from Amazon for $89, costs 18,200 United miles, delivering less than half-a-cent per mile in value.
And so on.
It’s nice to have options, of course. But in the great majority of cases, non-flight awards are simply lousy values.
One exception: subscriptions.
A one-year subscription to Sports Illustrated, discount-priced at $39 from the publisher, costs 1,400 United miles. That’s a decent 2.79 cents per mile. Twelve issues of Money magazine, $14.95, cost 800 miles, for a 1.9 cents-per-mile value.
In pure dollars-and-cents terms, cashing in miles for magazine or newspaper subscriptions can deliver a solid return on investment. But really, how many magazines do you want in your mailbox?
Reader Reality Check
Where do you find the most value when redeeming your miles?
This article originally appeared on FrequentFlier.com.
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