What's the Best Way to Redeem Points for Merchandise?
TPG reader Bertie sent me a message on Facebook to ask about redeeming points for merchandise:
"I have a sizable stash of Membership Rewards and Ultimate Rewards, which I'd like to redeem for TVs and iPads for my new store. What's the best way to do this?"
One piece of advice I find myself repeating often is that you generally shouldn't redeem points and miles for merchandise, gift cards or cash back. You get way more value by using your rewards for travel, either by booking flights and hotels directly, or by taking advantage of airline and hotel partners (in the case of transferable points like Chase Ultimate Rewards and American Express Membership Rewards.
On the other hand, I also often say that the best way to use points is the one that makes you happy, and some of my favorite award redemptions have been for events and experiences, rather than award flights. While I think the first piece of advice takes precedence, there are times when you may want to spend your points even though you're not getting a good return. It's best to at least know what your options are in order to keep a low value from getting lower.
Membership Rewards allows you to redeem points directly for merchandise, but you'll get a dismal return of just 0.5 cents per point. Only slightly better is the option to redeem points for statement credits, which gives you 0.6 cents per point. You can also link your account to Amazon and shop with points, but you'll still only get 0.7 cents per point that way. In terms of value, these are the worst ways to use Amex points.
You can also redeem Membership Rewards for retail gift cards, generally at a rate of 1 cent per point, though sometimes gift cards go on sale and you'll do slightly better. The problem is that Amex has a pretty uninspiring roster of gift cards available. Your one option for electronics is Staples, and that's only available as a physical gift card, so you'll have to wait (sometimes several weeks) for delivery before you can complete your purchase. That makes it hard to take advantage of sales or other discounts on the products you want.
Your prospects are a bit better with Ultimate Rewards. For starters, Chase offers a better variety of retail gift cards, including Amazon, Target, Best Buy and Staples. You'll generally get 1 cent per point, though again you can find the occasional sale that boosts your redemption value slightly. Ultimate Rewards also lets you use points to make purchases directly from Amazon at a rate of 1 cent per point. That's convenient because you can make the purchase immediately without having to wait for a gift card to arrive.
Best of all, Ultimate Rewards lets you redeem points for statement credits on your credit card. The redemption rate is still just 1 cent per point, but you gain the flexibility to buy when the price is good and then use points to cover the cost later on. Paying with your card means you'll also earn rewards for your purchase, which again boosts your total return to slightly above 1 cent per point.
To reiterate, I don't recommend any of these options. In my December monthly valuations, I list Chase and Amex points at 2.1 cents and 1.9 cents apiece, respectively. That means you're squandering about 50% of the value by redeeming for merchandise. My advice is to use your rewards for travel and pay cash for retail goods, but if that doesn't work for you, then at least don't settle for less than 1 cent per point.
If you have any other questions, please tweet me @thepointsguy, message me on Facebook or send me an email at info@thepointsguy.com.
TPG featured card
at American Express's secure site
Terms & restrictions apply. See rates & fees.
| 4X | Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 4X | Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 5X | New! Earn 5X Membership Rewards® points on prepaid hotel stays booked through AmexTravel.com or the Amex Travel App. |
| 3X | Earn 3X Membership Rewards® points on flights booked through AmexTravel.com, the Amex Travel App, or purchased directly from airlines. |
| 2X | Earn 2X Membership Rewards® points on prepaid car rentals booked through AmexTravel.com or the Amex Travel App and cruises booked and paid through AmexTravel.com. |
| 1X | Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases. |
Pros
- Valuable dining and food-related credits
- Flexible rewards with airline and hotel transfer partners
- Multiple travel and purchase protections
- No foreign transaction fees
- Access to Amex Offers for additional savings (enrollment required)
Cons
- Not as useful for those living outside the U.S.
- Some may have trouble using Uber and other dining credits
- You may be eligible for as high as 100,000 Membership Rewards® Points after you spend $8,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you’re approved and find out your exact welcome offer amount – all with no credit score impact. If you’re approved and choose to accept the Card, your score may be impacted.
- Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- New! Earn 5X Membership Rewards® points on prepaid hotel stays booked through AmexTravel.com or the Amex Travel App.
- Earn 3X Membership Rewards® points on flights booked through AmexTravel.com, the Amex Travel App, or purchased directly from airlines.
- Earn 2X Membership Rewards® points on prepaid car rentals booked through AmexTravel.com or the Amex Travel App and cruises booked and paid through AmexTravel.com.
- Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
- Pay It® lets you tap in the American Express® App to quickly pay for small purchase amounts throughout the month and still earn rewards the way you usually do. Plan It® gives you the option to split up big purchases into equal monthly payments with a fixed fee. You’ll know upfront exactly how much you’ll pay.
- Updated! $120 Dining Credit: Earn up to a total of $10 in statement credits monthly when you pay with the Gold Card at Grubhub (including Seamless), Buffalo Wild Wings, Five Guys, The Cheesecake Factory, and Wonder. This can be an annual savings of up to $120. Enrollment required.
- $100 Resy Credit: Get up to $100 in statement credits each calendar year at over 10,000 qualifying U.S. Resy restaurants after you pay for eligible purchases with the American Express® Gold Card. That’s up to $50 in statement credits semi-annually. Enrollment required.
- $84 Dunkin' Credit: Earn up to $7 in monthly statement credits after you pay with the American Express® Gold Card at U.S. Dunkin’ locations. Enrollment required.
- $120 Uber Cash on Gold: Enjoy up to $120 in Uber Cash annually with your Gold Card. Just add your Card to your Uber account and you'll get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an Amex Card for your transaction.
- New! As an American Express® Gold Card Member, you can enjoy complimentary Hertz Five Star® Status. Enjoy benefits like skipping the counter at select locations, adding an additional driver at no additional cost*, and vehicle upgrades**. Benefit enrollment and Hertz Gold+ registration are required. *Additional drivers must meet standard rental qualifications and must be a spouse or domestic partner to qualify as complimentary. Other additional drivers subject to fees. **Benefits are subject to availability and vary by location. Additional Hertz program Terms and Conditions including age restrictions apply.
- Take advantage of a $100 credit towards eligible charges* at over 1,300 upscale hotels worldwide when you book The Hotel Collection through AmexTravel.com or the Amex Travel App **. *Eligible charges vary by property. **The Hotel Collection requires a two-night minimum stay.
- Book your travel through the Amex Travel App with added peace of mind – backed by American Express® service and support. Only for American Express® Card Members.
- Whenever you need us, we're here. Our Member Services team will ensure you are taken care of. From lost Card replacement to statement questions, we are available to help 24/7.
- No Foreign Transaction Fees.
- Annual Fee is $325.
- Terms Apply.