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Southwest's groundbreaking feature will allow you to convert vouchers into Rapid Rewards points

April 16, 2020
5 min read
Southwest's groundbreaking feature will allow you to convert vouchers into Rapid Rewards points
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Southwest is joining the bandwagon of major airlines extending elite status due to the coronavirus pandemic. Over the course of the past two weeks, we've seen Alaska, American, Delta and United all extend status, so it was a matter of time before we heard from America's largest domestic air carrier.

And it's got great news for those with A-List status or a Companion Pass. But buried in the press release is a potentially exciting feature that we've never seen before — the ability to convert travel funds into Rapid Rewards points.

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Southwest is the only major airline that doesn't have any change or cancellation fees, so it didn't need to issue any change fee waivers like the rest of the industry. Instead, anytime you voluntarily cancel a Southwest Wanna Get Away fare (the cheapest), the value of your ticket will be kept in a travel fund that typically expires one year from the date the ticket was issued.

Related: Southwest extends Companion Pass, elite status benefits into 2021

As part of today's announcement, funds that are set to expire or funds that are created between March 1, 2020 and Sep. 7, 2020, will have an expiration date of Sep. 7, 2022. That's great for those who need some more flexibility and are uncertain of what the future holds.

Southwest check-in counter in Maui, HI (Photo by Zach Griff/The Points Guy.)

But aside from the expiration policy, there's long been another annoyance about travel funds: they can only be used by the originally-ticketed traveler. That means that even if you purchased a ticket for a friend or family member, they'll get to use the value of the ticket for future travel.

In order to mollify those concerns, Southwest's newest option will allow customers to convert select travel funds into Rapid Rewards points. On the surface, that's great news for customers, since points never expire, never have change or cancellation fees and you can redeem them for anyone you choose.

Related: Complete guide to coronavirus and airline elite status

But there are some things that remain to be seen to determine whether this will actually be a good deal. For one, this option will only be available to those passengers who have travel funds that are set to expire or funds that are created between March 1, 2020 and Sep. 7, 2020. It's unclear whether the applicable period will be extended further. If the shelter-in-place and stay-at-home orders continue to get extended across the country, I'd bet that it will.

But the real kicker will come down to the conversion ratio. According to the press release, it'll be the "same rate you would be able to purchase a ticket with points today." Well, here's the thing: Southwest points are a variable currency, with different values depending on the type of fare you purchase and other factors. Our TPG valuation is at 1.5 cents per point, and the value you get varies slightly based on whether you redeem for Business Select, Anytime or Wanna Get Away fares. Once we know more about the conversion ratio, we'll update this post with our analysis.

Southwest Boeing 737 interior. (Photo by Zach Griff/The Points Guy.)

Additionally, it'll be interesting to see if Southwest takes into account the fact that you don't earn Rapid Rewards points on award tickets, but you do with tickets booked with travel funds. Furthermore, you don't earn tier-qualifying points (TQPs) or Companion Pass qualifying points (CPQPs) for award travel.

Related: All about the Southwest Companion Pass

As such, it remains to be seen if the these Rapid Rewards will count as TQPs or CPQPs when processing the conversion. I'd bet not, but we've reached out to Southwest to clarify.

Ever since I've taken over the change/cancellation beat for TPG, I've received countless reader emails and Instagram messages with stories about airlines trying to convince passengers to take vouchers with bonuses instead of refunds. Normally, I'd say that it makes sense to collect a refund, unless you're certain you're going to travel again with the airline.

Southwest's new conversion offer has the possibility to tip the scale in favor of collecting points instead of a refund. It'll come down to the ratio that's applied, but hopefully it'll be generous.

And for all the other airlines trying to convince passengers to accept vouchers instead of refunds, it may be time to borrow from Southwest's playbook and allow customers to convert credits to points.

Featured image by Peter Scott Barta

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Best Marriott card for Business Owners
TPG Editor‘s Rating
Card Rating is based on the opinion of TPG‘s editors and is not influenced by the card issuer.
3 / 5
Go to review

Rewards Rate

6X6x points at hotels participating in the Marriott Bonvoy® program.
4X4x points for purchases made at restaurants worldwide, at U.S. gas stations, on wireless telephone services purchased directly from U.S. service providers and on U.S. purchases for shipping.
2X2x points on all other eligible purchases.
  • Intro Offer
    Limited Time Offer: Earn 100,000 Bonus Marriott Bonvoy Points after spending $4,000 in purchases on your new Card in your first 3 months of Card Membership. Offer expires 11/2/22.

    Earn 100,000 points
    75,000 points
  • Annual Fee

    $125
  • 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.

    670-850
    Excellent/Good

Why We Chose It

The Marriott Bonvoy Business Amex is a stacked card with a rewards rate that will help you earn bonus points on everyday and business-related purchases. You'll earn 15 elite night credits each calendar year, and receive automatic Gold elite status. Finally, the free night award certificate with a redemption level of 35,000 points or less can get you hundreds of dollars in potential value each year.

Pros

  • 6x points on eligible purchases at hotels participating in the Marriott Bonvoy program
  • 4x points at restaurants worldwide, U.S. gas stations, wireless telephone services purchased directly from U.S. service providers and U.S. shipping
  • 2x points on all other eligible purchases
  • Earn a free-night award each card renewal month (up to 35,000 points)
  • Receive 15 elite night credits to jump-start status
  • Transfer Marriott points to 40+ airlines

Cons

  • Airline points transfer ratios are poor
  • Must spend $60,000 in a year for second free-night award
  • Limited Time Offer: Earn 100,000 Bonus Marriott Bonvoy Points after spending $4,000 in purchases on your new Card in your first 3 months of Card Membership. Offer expires 11/2/22.
  • 6x points at hotels participating in the Marriott Bonvoy® program.
  • 4x points for purchases made at restaurants worldwide, at U.S. gas stations, on wireless telephone services purchased directly from U.S. service providers and on U.S. purchases for shipping.
  • 2x points on all other eligible purchases.
  • Receive a 7% discount off standard rates for reservations of standard guest rooms at hotels that participate in the Marriott Bonvoy program when you book directly. Terms and Conditions Apply.
  • Receive 1 Free Night Award every year after your Card renewal month. Plus, earn an additional Free Night Award after you spend $60K in purchases on your Card in a calendar year. Awards can be used for one night (redemption level at or under 35,000 Marriott Bonvoy® points) at hotels participating in Marriott Bonvoy®. Certain hotels have resort fees.
  • Enjoy Complimentary Marriott Bonvoy Gold Elite Status with your Card.
  • Terms apply.
  • See Rates & Fees