(Video) Sunday Reader Question: Points and Friends- How to Handle Reimbursement
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This week we have a question from an anonymous reader regarding proper reimbursement for sharing points with friends:
“If you use points to book a flight for you and a friend or a hotel room that a friend shares, what do you think is the appropriate protocol for sharing the cost? For instance, if you book a Starwood hotel with SPG Cash & Points and get $0.04 of value out of each point, would you split the cash paid and charge them a certain amount per point? Flights can also be tricky, especially if paying for the flight with cash would be very expensive.
Perhaps the trickiest situation, though, is when you are awarded free hotels/companion tickets, e.g. Hyatt credit card sign-up bonus or Delta companion ticket. Would you ask the friend to contribute some cash in exchange for them reaping the benefits of your award nights/flights?”
In general, if I cover a hotel room or flight for a friend, I just ask them to cover the taxes/fees and depending on how valuable the trip is, I’ll ask them to get dinner or pay for my tour or something similar. My situation is also unique because I have a ton of miles and points and cherish the time I get to spend with family and friends, but I’m lucky that I have more miles and points than I can personally use.
However, I know my situation is not the same for everyone and I think you bring up a good point. We work hard for our miles and points and contrary to what some people may think – they aren’t free. Whether it’s jumping through hoops or taking a hit on our credit to get that great credit card bonus, there are inherent costs to accruing miles and points. So, I don’t think it’s out of line to ask your friend to chip in if you use miles/points that greatly defer their costs. Here are a couple of my tips:
1) Don’t get greedy. I wouldn’t charge them half of the rack rate of a hotel room, for example. Go with your gut.
2) Don’t charge your friends what you personally value the points at. I would conservatively value the money that your miles/points saved them – especially if you used a currency that you don’t value as much as others.
3) Agree on a fair price before you travel so there aren’t misunderstandings.
4) Don’t feel compelled to use your miles/points for friends. If you aren’t comfortable using your miles/points for your friend, then don’t do it! Instead, give your friend my website and tell them to carry their own weight and build up their own point balances- anyone can do it! “Teach a man to fish and you feed him for a lifetime.”
How do you handle reimbursement when you use your hard earned miles and points for others? With great travel benefits, 2x points on travel & dining and a 50,000 point sign up bonus, the Chase Sapphire Preferred is a great card for those looking to get into the points and miles game. Here are the top 5 reasons it should be in your wallet, or read our definitive review for more details.
With great travel benefits, 2x points on travel & dining and a 50,000 point sign up bonus, the Chase Sapphire Preferred is a great card for those looking to get into the points and miles game. Here are the top 5 reasons it should be in your wallet, or read our definitive review for more details.
Know before you go.
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