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Loyalty programs continue to limit non-travel redemptions

Aug. 27, 2020
6 min read
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Editor's Note

</em></strong><em>This is a recurring post, regularly updated with new information.

While many frequent flyer and hotel loyalty programs offer a wide array of redemption options, at TPG we tend to focus primarily on the ones that get you the most bang for your buck. This almost always means travel-specific redemptions, using your frequent flyer miles for flights and your hotel points for free nights.

For a long time, many programs have expanded their non-travel redemption options, allowing you to use your points for things like gift cards, merchandise, car rentals and more. The catch is that these redemptions usually represent pretty bad values, with your hard-earned points often being worth less than 1 cent each — though we have seen higher options from credit card issuers like Chase and Capital One in recent months.

As the novel coronavirus first burst on the scene, we saw a number of loyalty programs restrict the ability to use points and miles for non-travel related redemptions. This is a logical move to protect cash flow, especially if a large number of customers without immediate travel plans decided to suddenly cash out their points for something else.

Unfortunately, as the pandemic continues to stifle travel demand both in the U.S. and internationally, this trend continues — with Delta Air Lines as the most recent culprit.

Here's a run-down of the significant changes that we've seen from loyalty programs in 2020.

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Hertz Gold Plus Rewards

The coronavirus is affecting every corner of the travel industry, not just airlines. Hertz is one car rental company that's been hit hard, formally filing for bankruptcy protection in late-May. Unfortunately, around that time, Hertz blocked the ability for Gold Plus Rewards members to redeem points for things other than rental cars, including transferring points to airline partners and using them to bid on experiences.

Related: Maximizing points and miles with Hertz car rentals

Virgin Australia

While many airlines around the world are in precarious financial positions, Virgin Australia has been the first major airline to buckle under the pressure. Earlier in the year, Virgin Australia voluntarily entered into administration (similar to bankruptcy protection in the U.S.) and almost immediately suspended all redemptions from its Velocity frequent flyer program for four weeks. Thankfully, redemptions have since resumed for domestic flights within Australia.

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Velocity is run by a separate company within the Virgin business that is itself not under administration. However, Virgin promised customers that their miles would be protected and would not expire or disappear during this suspension.

American Airlines

Doctor of Credit reported that American Airlines has also begun limiting non-travel redemptions, specifically by blocking redemptions via points.com. This partnership was somewhat limited to begin with, in that you needed to hold American Airlines elite status or have at least 25,000 miles in your account. But through points.com, you were able to convert your miles into gift cards from a variety of different merchants.

Related: How to redeem miles with American Airlines AAdvantage

Delta SkyMiles

Delta has always been a leader in innovative redemption options, and it was the first of the U.S. legacy carriers to switch to dynamic award pricing. Through its SkyMiles Marketplace, Delta allows customers to redeem their miles for merchandise, gift cards, car rentals, hotel stays, cruises and more.

On March 16, 2020, Delta added restrictions to the SkyMiles marketplace. While this has always been limited to Medallion elite members and Delta Amex cardholders, the option to redeem miles for gift cards disappeared entirely.

Then on Aug. 27, 2020, Delta took the SkyMiles Marketplace completely offline. Members are now greeted with a "Check back soon for updates to the SkyMiles Marketplace" screen when attempting to load the site. The airline told Rene's Points the following:

“Given the evolving nature of the COVID-19 pandemic and its impact on our business, we have decided to pause SkyMiles Marketplace. Existing SkyMiles Member Marketplace purchases will be honored.”
Delta SkyMiles Marketplace Paused
(Image courtesy of Delta Air Lines)

Related: How to redeem miles with the Delta SkyMiles program

Southwest Rapid Rewards

Southwest's customer-friendly fee structure, cheap fares and easy-to-use rewards program have made it a customer favorite for many years. Rapid Rewards members also have the ability to redeem their points for non-travel options like merchandise, gift cards and more via the "More Rewards" portal.

As of now, More Rewards has been temporarily suspended and most Southwest members can only use their Rapid Rewards points to book Southwest flights. Similar to Delta, the airline is only allowing Chase Southwest Rapid Rewards credit card members to redeem points for things other than flights.

Southwest Rapid Rewards More Rewards
(Image courtesy of Southwest Airlines)

Related: How to redeem points with the Southwest Rapid Rewards program

Best Western

Best Western has also paused the ability to redeem points for gift cards and merchandise through its Redemption Mall portal. However, as of now you can still donate your points to charity, convert them to miles with 14 different airline frequent flyer programs, or redeem them for a AAA/CAA membership, in addition to redeeming them for free hotel nights.

(Image courtesy of Best Western)

Related: The best hotel credit cards

Bottom line

Despite a record-setting government bailout, many companies in the travel industry are in very precarious financial positions. Expect to see more airlines and hotels follow the lead of these companies, and limit non-travel redemptions to protect cash flow.

Featured image by Getty Images

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Our points-obsessed staff uses a plethora of credit cards on a daily basis. If anyone on our team wouldn’t recommend it to a friend or a family member, we wouldn’t recommend it on The Points Guy either. Our opinions are our own, and have not been reviewed, approved, or endorsed by our advertising partners.
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TPG featured card

Best card for premium perks while traveling
TPG Editor‘s Rating
Card Rating is based on the opinion of TPG‘s editors and is not influenced by the card issuer.
4 / 5
Go to review

Rewards

2 - 10X points
10XEarn unlimited 10X miles on hotels and rental cars booked through Capital One Travel
5X5X miles on flights booked through Capital One Travel.
2X2 Miles per dollar on every purchase, every day

Intro offer

75,000 bonus miles
Earn 75,000 bonus miles when you spend $4,000 on purchases in the first 3 months from account opening, equal to $750 in travel

Annual Fee

$395

Recommended Credit

740-850
Excellent
Credit ranges are a variation of FICO© Score 8, one of many types of credit scores lenders may use when considering your credit card application.

Why We Chose It

The Capital One Venture X card is one of the best all-round travel credit cards ever launched. Not only is it offering a tremendous welcome bonus, but cardholders can earn tons of miles on everyday spending and receive a 10,000-mile anniversary bonus to boot. Its annual fee is $395, but cardholders can count on up to $300 in statement credits toward travel booked through Capital One Travel each year and other valuable benefits like access to Priority Pass lounges and Capital One’s own growing family of airport lounges.

Pros

  • Excellent welcome offer worth 75,000 miles after you spend $4,000 on purchases in the first three months.
  • Up to $300 in annual travel statement credits toward bookings make through Capital One Travel.
  • 10,000 bonus miles (worth $100 toward travel) each account anniversary.

Cons

  • The $395 annual fee might be expensive for some, but this card’s benefits provide much more value than that.
  • If you don’t travel frequently, this might not be the best card for you.
  • Earn 75,000 bonus miles when you spend $4,000 on purchases in the first 3 months from account opening, equal to $750 in travel
  • Receive up to $300 back annually as statement credits for bookings through Capital One Travel, where you'll get Capital One's best prices on thousands of options
  • Get 10,000 bonus miles (equal to $100 towards travel) every year, starting on your first anniversary
  • Earn unlimited 10X miles on hotels and rental cars booked through Capital One Travel and 5X miles on flights booked through Capital One Travel
  • Earn unlimited 2X miles on all other purchases
  • Unlimited complimentary access for you and two guests to 1,400+ lounges, including Capital One Lounges and our Partner Lounge Network
  • Receive up to a $100 credit for Global Entry or TSA PreCheck®
  • Use your Venture X miles to easily cover travel expenses, including flights, hotels, rental cars and more—you can even transfer your miles to your choice of 15+ travel loyalty programs
  • Named editors' choice for "Best New Credit Card of 2021" by The Points Guy
  • Earn 10 miles per dollar when you book on Turo, the world's largest car sharing marketplace, through May 16, 2023
Best card for premium perks while traveling
TPG Editor‘s Rating
Card Rating is based on the opinion of TPG‘s editors and is not influenced by the card issuer.
4 / 5
Go to review

Rewards Rate

10XEarn unlimited 10X miles on hotels and rental cars booked through Capital One Travel
5X5X miles on flights booked through Capital One Travel.
2X2 Miles per dollar on every purchase, every day
  • Intro Offer
    Earn 75,000 bonus miles when you spend $4,000 on purchases in the first 3 months from account opening, equal to $750 in travel

    75,000 bonus miles
  • Annual Fee

    $395
  • Recommended Credit
    Credit ranges are a variation of FICO© Score 8, one of many types of credit scores lenders may use when considering your credit card application.

    740-850
    Excellent

Why We Chose It

The Capital One Venture X card is one of the best all-round travel credit cards ever launched. Not only is it offering a tremendous welcome bonus, but cardholders can earn tons of miles on everyday spending and receive a 10,000-mile anniversary bonus to boot. Its annual fee is $395, but cardholders can count on up to $300 in statement credits toward travel booked through Capital One Travel each year and other valuable benefits like access to Priority Pass lounges and Capital One’s own growing family of airport lounges.

Pros

  • Excellent welcome offer worth 75,000 miles after you spend $4,000 on purchases in the first three months.
  • Up to $300 in annual travel statement credits toward bookings make through Capital One Travel.
  • 10,000 bonus miles (worth $100 toward travel) each account anniversary.

Cons

  • The $395 annual fee might be expensive for some, but this card’s benefits provide much more value than that.
  • If you don’t travel frequently, this might not be the best card for you.
  • Earn 75,000 bonus miles when you spend $4,000 on purchases in the first 3 months from account opening, equal to $750 in travel
  • Receive up to $300 back annually as statement credits for bookings through Capital One Travel, where you'll get Capital One's best prices on thousands of options
  • Get 10,000 bonus miles (equal to $100 towards travel) every year, starting on your first anniversary
  • Earn unlimited 10X miles on hotels and rental cars booked through Capital One Travel and 5X miles on flights booked through Capital One Travel
  • Earn unlimited 2X miles on all other purchases
  • Unlimited complimentary access for you and two guests to 1,400+ lounges, including Capital One Lounges and our Partner Lounge Network
  • Receive up to a $100 credit for Global Entry or TSA PreCheck®
  • Use your Venture X miles to easily cover travel expenses, including flights, hotels, rental cars and more—you can even transfer your miles to your choice of 15+ travel loyalty programs
  • Named editors' choice for "Best New Credit Card of 2021" by The Points Guy
  • Earn 10 miles per dollar when you book on Turo, the world's largest car sharing marketplace, through May 16, 2023