Reader Wozza pointed me in the direction of PointsPay, an interesting way of cashing out airline miles – for real cash.
PointsPay is not new, launching in 2012. It has also failed to take off in a major way, since Etihad Guest is the only airline programme currently associated with it. It is an interesting model, though.
The company describes itself as:
PointsPay offers a mobile wallet and payment system that enables members of participating loyalty programs to redeem points and miles in-store and online at over 30 million merchants worldwide. You convert your miles and points into Cash (Virtual Visa Card or Mastercard) and then use it anywhere.
Fundamentally, you use your PC or smartphone, via an app, to transfer your Etihad Guest miles to or from PointsPay. You can then either generate a ‘virtual Visa’ number online, for online shopping, or order a physical plastic Visa card from PointsPay which can be used in retailers like a normal debit card.
I registered my Etihad Guest accounts with PointsPay. The exchange rate 0.41p per mile, with a 62p flat fee deducted from each transaction as well.
That is certainly not fantastic – I would normally look to get at least double that, and hopefully more, if redeeming for flights. However, you are cleanly exiting your miles. There is no minimum or maximum load, and no ’round number’ requirement, so you can empty your Etihad Guest account down to exactly zero miles if you want.
What would be interesting would be if Amex offered a 100% transfer bonus on Membership Rewards points to Etihad Guest. That would effectively let you cash out your Amex points at 0.8p per point, which would not be bad. However, there is no sign of such a bonus turning up – the current Etihad Guest transfer bonus is only 20%.
Most loyalty schemes have a way of cashing out for cash or pseudo-cash. The exchange rate is usually terrible, for example:
IHG Rewards Club lets you redeem 15,000 points for a £25 gift voucher for various retailers. I would expect to get around £75 of free hotel room for the same number of points.
Lufthansa’s Miles & More lets you redeem 8,250 miles for a €25 Radisson Hotels gift card. That is a shocking 0.25p, roughly, per mile. I would be looking at 1p per mile from a flight redemption, albeit 8,250 won’t get you far. Alternatively, you can redeem 7,500 miles for a £20 Heathrow Airport shopping voucher.
Virgin Flying Club lets you redeem 12,500 miles for a £50 Virgin Group voucher or £50 of Theatre Tokens. This is 0.4p per mile – the same as Etihad offers.
(There are also various ways of cashing out Membership Rewards points, either for statement credit, travel products, retail gift cards or into Nectar points. You will only get between 0.4p and 0.5p per point, however.)
The reason I raise this topic is that British Airways is, according to rumour, soon to launch an option to pay for cash flights with Avios. It is not yet clear exactly how it will work, whether all travel classes will be included and whether you can pay for a whole flight or just part of it.
You can currently redeem Avios for hotels rooms. As I showed here, the rate is not bad (in the scheme of things) at 0.6p per Avios. To my mind, this sets a floor for the value that BA will give for the ‘pence per Avios’ discount on cash flights.
This is set to be one of the more interesting announcements due this Autumn. Needless to say, it will be covered here as soon as there is news!