Maximizing Points For Holiday Gifts and Gift Cards
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I can’t believe it’s already Thanksgiving, and that means the holidays – and all those holiday shopping deals – are right around the corner. While I usually use my miles and points for travel redemptions since I get the most value from them that way, I know a lot of people like to use their points or miles for merchandise or gift card redemptions around this time of year, especially if they’re short on cash but flush with points. Although I don’t normally suggest redeeming your points for merchandise or gift cards since you usually get a return of just 1% at most on your spending, I did want to cover your options briefly in case you were considering doing so.
American Express Membership Rewards
If you have a card that earns Membership Rewards points, such as the Premier Rewards Gold Card from American Express, Business Gold Rewards Card from American Express OPEN or Platinum Card® from American Express cards, you can redeem those points for merchandise and gift cards in a variety of ways.
Your first option is to redeem MR points directly through Amex for a variety of retail and gift card products. If you are just going for straight-up Amex gift cards, you can redeem starting at 5,000 points, but that only gets you a $25 gift card – so you’re only getting a 0.5 cent per point value.
Retail gift cards are a bit better conversion rate and there are gift cards available from a variety of merchants including travel, dining and entertainment, shopping and more. Redemptions start as low as 2,500 points. For example, this OpenTable gift card can be redeemed at any participating restaurant.
That means you’re getting 0.83 cents per point. Still not 1% but better. That said, there are a bunch of merchants – usually in the retail/apparel categories that get you 1 cent per point in value, such as Gap.
Where 2,500 points gets you $25 – a 1 cent per point value, and the threshold where I’d say these are decent redemptions. Your best bet is to shop around and always crunch the numbers to make sure you’re getting a decent return for your points expenditure.
You can also link your Membership Rewards account directly to your Amazon.com account and redeem your points at a rate of 0.7 cents per point. Again, not the best value, but if you’re points-rich and cash-poor, it’s still something to consider, and you can buy pretty much anything through the site if you’re looking to use your points this way.
Barclaycard Arrival Miles
The Barclaycard Arrival is a great travel credit card product because you earn 2X miles per $1 on everything (with the version that has an $89 annual fee waived the first year) and you can redeem those miles for travel purchases at a rate of 1 cent per mile plus a 10% mileage refund.
You can also redeem miles for cash back statement credits, gift cards and merchandise. However, cash back statement credits start at 2,500 miles but for just $12.50 in value, so you’re only getting a value 0.5 cents per point. Gift card redemptions start at 5,000 miles for $25, again just getting a value of 0.5 cents per mile and bringing your return on spending to just 1% with the annual fee card and potentially just 0.5-1% on the no annual fee card. Merchant gift card redemption rates vary but are usually around the 0.5 cents per mile mark.
If you redeem Arrival card miles as a statement credit, the credit will be posted to your account within 5-7 business days – so no waiting till your due date to request a credit, and there is no maximum to the total miles you can redeem.
I would stay away from this option since you literally get over twice the value from travel redemptions, but if you’re strapped, you can still go this route. You could also give someone the gift of travel by purchasing it for them with your Arrival card then redeeming your miles for it and get a better rate of return that way.
Capital One Venture Rewards
Capital One’s Venture Rewards program is pretty clear-cut. You earn 2 miles per $1 with the Capital One Venture Rewards Credit Card card and 1.25 miles per $1 with the Capital One VentureOne Rewards Credit Card, and then can redeem those miles for statement credits on travel purchases at a rate of 1 cent per point – so you’re getting a solid 2% return on spending with the Venture and 1.25% with the VentureOne.
In addition to redeeming for statement credits on travel purchases, you can also redeem your miles for gift cards at hundreds of merchants including Amazon, Target, Starbucks and more at a rate of 1 mile per point, so you’re still getting the same return on your spending. All in all, if you like simple, fixed-value points programs and you are interested in redeeming for non-travel merchandise and gift cards, this is the best clear-cut option for you.
Chase Ultimate Rewards
Again, I would never personally redeem my Chase Ultimate Rewards points for non-travel expenses since I get huge value out of them by transferring them to partners like United (well, pre-devaluation for now, at least) and Hyatt (even post-devaluation) – and you even get 1.25 cents per point in value when redeeming for travel purchases if you have the Sapphire Preferred, Ink Bold or Ink Plus, there are still quite a few options if you want to redeem some points for presents and gift cards through the Ultimate Rewards portal.
First, like Amex, Chase has a partnership with Amazon, so you can buy pretty much anything using your points. You just need to link your Amazon and Ultimate Rewards accounts while logged into Ultimate Rewards and then your points are worth 1 cent apiece, beating out Amex.
Chase also offers an Amazon Visa, which gets you a $50 credit upon approval and earns 3 points for every $1 spent on Amazon.com; 2 points for every eligible $1 spent at gas stations, restaurants, and drugstores;and 1 point for every other $1 spent. Those Amazon points are then redeemable at 1 cent each when shopping on Amazon.
You can also redeem directly for merchandise, but options are pretty limited and most seem to be part of Chase’s partnership with Best Buy. Because electronics prices are in flux and the Ultimate Rewards site doesn’t cite the retail prices of the items you would be using points to purchase, I’d definitely encourage you to look them up on your own to be sure you’re getting a decent value from your points.
Chase will also let you redeem your Ultimate Rewards points for gift cards at hundreds of merchants, and in the vast majority of cases the redemption value is 1 cent per point.
That means if you’re really maximizing your card’s category spending bonuses, like the Sapphire Preferred’s 2.14X points on travel or the Ink Bold and Ink Plus’s 5X at office supply stores and on telecommunications, your return on spending could actually be much higher than just 1%.
If you have the Sapphire or Sapphire Preferred, you could also consider redeeming your points for a Chase Exclusives experience for a friend or loved one for the holidays. Chase was offering a ton of fun NFL experiences earlier this fall, and I actually purchased a Sundance package though you could also redeem points for it. Ostensibly, your points are worth 1 cent apiece when redeeming for these packages, but because Chase tends to be a sponsor of the events featured, the ticket/access prices are actually much lower than their worth so if you do redeem points for them, you are getting a better value than 1%.
Citi ThankYou Points
Citi has a few different options for you if you’re looking for gift card redemptions.
The Citi Premier lets cardholders redeem points in bundles starting at 2,500 for $25 gift cards, so you are getting 1 cent per point on non-travel redemptions. The card earns 3X points on dining out and entertainment and 2X points on airfare and hotels and just 1 point per dollar on other purchases, so depending ono your spending, you’re getting a return of 1-3% back if redeeming for gift cards.
The Citi ThankYou Preferred also offers 1 cent per point on many non-travel redemptions including most gift cards, while straight cash back gets you 0.5 cents per point in value. However, you now earn 2 ThankYou points per $1 spent on dining purchases and entertainment including movies, museums, amusement parks, sporting events, even iTunes and Netflix downloads with no limits on the bonus you can earn – and 1 point per $1 on everything else. So you’re getting a 1-2% return on your spending with this card.
The Discover It card offers its holders 1% cash back on most purchases, 5% on certain spending categories that change periodically (it can be anything from stations and restaurants to movies or home improvement), and between 5-20% on purchases made through the Discover online shopping mall.
Then cardholders can redeem the points they rack up for statement credits at 1 cent per point or shop directly for merchandise with partners Amazon, Facebook and iTunes, also at 1 cent per point.
You can’t use Disover points for travel, so the point of racking up these points is specifically for redemptions like merchandise and gift cards, and you know exactly what return you’re getting on your spending and can really maximize that return by taking advantage of their category bonuses.
US Bank Flexperks
Although you can get values of up to 2 cents per point with the US Bank FlexPerks Visa, members can also redeem points for cash back statement credits at a rate of 1 cent per point – a 1% return on most of your spending, though the card does have some category spending bonuses that mean you can get up to a 3% return on your spend. Those include two FlexPoints for every $1 spent on gas, grocery or airline purchases – whichever you spend most on each monthly billing cycle – and on most cell phone expense and triple FlexPoints for your charitable donations.
The way I figure is, if you use your card to buy a gift card or a present for someone then redeem your points for cash back, it’s the same as just using points to buy a gift card.
Starwood Preferred Guest
Like Chase, American Express and Starwood offer cardholders of the SPG Amex access to exclusive events and opportunities for which they can redeem their points, so this could be something to consider if you’ve got a ton of SPG points racked up and don’t plan to use them on hotel stays (though you’re likely going to get much better values from hotel stays!).
Over the summer, SPG was offering a variety of US Open-themed packages, while this fall, the program is offering dozens of packages for concerts and sporting events at Madison Square Garden including Elton John and Kanye West concerts and New York Knicks and Rangers games. While you can only redeem points for these packages, I calculated out the value of some of the packages, and your per-point value is as high as 3 cents, and these are some distinctive, exclusive-access events, so if you find a concert or game you think your friend or loved one would like, it could be worth it to redeem your points, and makes for a unique gift.
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