Southwest is selling points with a 75% bonus, but you’ll still lose money
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Southwest Rapid Rewards is a revenue-based loyalty program where the amount of points required for an award flight is dictated by the revenue cost of the flight you want to book. Fresh off this month’s devaluation, it will take roughly 83 Rapid Rewards points per dollar of airfare to book an award flight. This makes a Rapid Rewards point worth about 1.2 cents per point (give or take a bit depending on some airfares).
Starting today through May 28, you can buy points with up to a 75% bonus:
If you buy the maximum allowed in this promotion, you’ll end up paying $1,650 for 105,000 points making the cost 1.57 cents per point.
If you can only redeem points for 1.2 cents per point, but have to pay a minimum cost of 1.57 cents per point, you’re never going to come out ahead. It makes more sense to take your $1,650 you would spend on points and buy the revenue tickets from Southwest – which will earn your redeemable points as well as progress towards status and the Companion Pass. Purchased points do not count towards A-List status or towards earning the Companion Pass.
The only time I can think where it would make sense to buy a revenue-based loyalty program’s points is if you’re just short of a reward and need to top up an account to save yourself considerable money. Even then, a savvy TPG reader would have a stash of Chase Ultimate Rewards ready to be transferred over to your Rapid Rewards account so you don’t need to spend any money to top up an account or get a Southwest award flight.
75% is a good bonus, but the math still doesn’t work in your favor.
Featured photo courtesy Edward Russell/TPG.
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