Is redeeming points for cash EVER a good deal?

Last week I wrote about the temporary improvement to the British Airways ‘part pay with Avios’ offer.  Until April 29th, you can use your Avios for a discount on selected long-haul BA flights.  You effectively receive 0.67p per point up to a maximum of £400 on a Club World seat.

This is one of a few methods by which reward programme allow you to redeem your points for cash or a cash equivalent.  In general, these are terrible deals and best avoided – although the BA offer above is on the verge of being acceptable.

Etihad Guest has one of the most interesting schemes.  Called PointsPay, it is a way of cashing out airline miles – for real cash – via a Virtual Visa Card.  With Etihad, you receive around 0.4p per point.

PointsPay is not new, launching in 2012. It has 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.

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.

Etihad Boeing 777 business class plane

0.4p per Etihad Guest point 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.  I used PointsPay to cash out a small number of miles from a Korean Air flight which was credited to Etihad Guest.

Here are a few other examples of ‘pseudo cash’ redemptions:

IHG Rewards Club lets you redeem 7,000 points for a £10 gift voucher for various retailers via ‘Exclusively Yours’. I would expect to get around £35 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. 

Lufthansa also lets you redeem 7,500 miles for a £20 Heathrow Airport shopping voucher.  This needs to be ordered via the Heathrow Rewards website, oddly, which you means you need a Heathrow Rewards account to access it.

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.

Club Carlson lets you redeem points for Visa gift cards.  UK residents are offering a £25 card for 30,000 points.  I would expect to receive £150 of free nights from 30,000 points if I redeemed smartly.

PartnerPlusBenefit, the Star Alliance scheme for small businesses, lets you redeem for real cash – although I don’t have the ratios to hand.

There are also various ways of cashing out Membership Rewards points, either for statement credit, travel products, retail gift cards or into Nectar points.   The redemption rate is never better than 0.5p per point compared to 1p per point for a good airline mile redemption.  This recent article looked at the value you get.

I HAVE redeemed American Express points for travel statement credit in the past when I felt my balance was too high and I had no other obvious use for the points.  I may regret this at some point in the future!

In general, the best deal is always to redeem for the proprietary product offered by that loyalty schemeUse Avios for flights, use Eurostar Frequent Traveller points for trains and use hotel points for rooms.  Take advantage of the fact that these companies have unsold spare capacity they are happy to offload.  Cashing out points for cash or a cash equivalent is very rarely worth it.

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Post Office now accepting American Express
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Comments

  1. I managed to get rid of some Melia hotel points by transferring them to Lufthansa and then on to Heathrow Rewards.

  2. I cashed out some LH points to Heathrow Rewards (at that point BAA Worldpoints) shopping vouchers – I had nowhere near a useful amount for a flight redemption and they were about to expire anyway. I think programmes with hard expiry for points is the most appealing when it comes to it being worthwhile to cash out.

    • Yep – our kids had amassed some small levels of points with Lufthansa. Couldn’t do anything meaningful with them so we converted into Radisson vouchers. Took the sting out of paying for dinner at the ZRH airport hotel!

  3. Anyone know of a way of cashing out Turkish Airlines miles to anything?

  4. Thunderbirds says:

    I’ve just got my 1000 points for changing my password at Hilton. I never use Hilton and only have a total of…. 1000 points. Any route to BAEC…??

  5. Metatone says:

    I think the frustration if you aren’t able to book ahead is that often you can’t really use points.
    So on the one hand, BA are taking advantage of that frustration to get you to cash in for cheap.
    On the other, there’s a genuine question about how much points are worth if your life doesn’t let you book ahead enough to get redemptions.

    In the M household we have all the factors you can imagine – small business with variable travel requirements, children from a previous marriage, so holidays have an extra level of planning/consent required, throw in some cash-flow variability from the business and it’s easy to wonder if “points into discount now” is worth more than “better value from a redemption, if we can plan ahead, but it won’t be this year…”

    • Frenske says:

      – Add in equation that reward availability is often low in season you actually want to go and to the destination you actually want to fly.
      – Add in that some destinations are cheap when bought in advance e.g. I am flying soon to WAW and back for £66 + 4500 Avios versus using a reward flight of £35 + 15000 Avios. I plan my holidays well in advance.

      This makes the avios for cash more attractive! I guess for people flying more often than me, more redemption options will be available. But personally I have seen very little redemptions options that would either so much better than full cash fair.

  6. I recently used 15k points to get a £100 discount, not great value in the long run but I have an excess of points right now and no upcoming redemption opportunities this year. So it worked for me.

  7. The Best way to do this (although still not great value) are gift cards. Most hotel schemes allow this. For example 47,500 MR points will get you £100 gift card (various Vendors).

    You can easily shift this for 90% value on EBAY, thus converting it into a cash redemption.

    • Frenske says:

      How does this work? 47.500 MR points is 47.500 Avios. Even when using this to get cash reduction on BA it should be worth £317.