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One little known feature of certain mileage programs is the ability to exchange unused gift cards for frequent flyer miles. United’s MileagePlus is one such program, and right now the program is running a 40% bonus on the miles you receive for these exchanges.
Your gift card must have at least $25 of value on it, and must come from an approved retailer. You can find the entire gift card retailer list on the promo page, but it includes merchants like Adidas, Barnes & Noble, Best Buy, Brooks Brothers, Chico’s, Disney, Dell, Gap, Home Depot, Kohl’s, Kroger, Lowe’s, Lord & Taylor, Office Max, Office Depot, Rite Aid, Saks Fifth Avenue, Sams Club, Staples, Starbucks and even Tiffany & Co.
According to the terms and conditions, you must transfer the whole value of the balance on the gift card over to United if you agree, the minimum is $25 and the airline might impose a maximum depending on the card. The gift card must also not be a paper certificate and cannot have an expiration date. The miles you receive are simply award miles, not elite-qualifying miles, which should appear in your account within 5 business days. There is no listed end date for the 40% bonus promotion.
The normal exchange rates are the following and include a 7.5% excise tax:
So basically with this 40% promotion you’re paying between 2.65-2.7 cents per mile. Ordinarily, United miles cost 3.7625 cents each – 3.5 cents plus a 7.5% excise tax and they frequently run promotions, like their current 40% discount which brings the price to less than 2.3 cents a mile. Check out this post for my detailed analysis of buying United miles at a 40% discount from September.
I generally value United miles at about 2 cents each, so in my opinion you are still paying a premium with this promo, but if you have gift cards to merchants you know you’re not going to use (or regift!), it might make sense to turn some of them over.
To make an exchange, from the promo page, click the Get Started button and then log in to your United Mileage Plus account where you will be taken to a page to choose the merchant, enter the gift card number and then enter the card’s PIN. I don’t have a gift card to exchange at the moment, but I believe the next page verifies the card number and the balance and displays the miles you will get in exchange.
Personally, I’m going to avoid this promotion because I’d rather buy Star Alliance miles via US Airways for a shockingly low price of only 1.1 cents a mile through the current Share Miles Promotion. While US Airways miles are less flexible than United miles in a number of ways (poor website for booking partner awards and no one-way awards), US is better in some ways, like more lax routing rules and lower redemptions on certain routes like Australia and North Asia in business class and off-peak awards.
Hat tip: TPG reader Pavel.