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Do Discounted Frequent Flyer Miles Rate a ‘Buy’?

Do Discounted Frequent Flyer Miles Rate a ‘Buy’?

The sale of frequent flyer miles and hotel points is big business for travel suppliers. Need points? The airlines and hotels will be happy to sell them to you.

But typically, the prices for the miles or points are too high to deliver decent value—they’re highly profitable for the seller, and a bad deal for the buyer. Occasionally, however, limited-time promotions tilt the value equation back in favor of the consumer, as with US Airways’ recurring 100 percent bonus on purchased miles.

Sometimes the deals are positioned as bonuses—more miles for the same price. Other times, they’re price reductions. But in the end, by whatever name, they all amount to discounts.

Among those currently on offer:

American

Through January 31, AAdvantage members will receive a bonus of up to 15,000 bonus miles on purchases for their own accounts or as gifts, as follows:

  • Purchase 2,000 miles, receive 500 bonus miles.
  • Purchase 6,000 miles, receive 2,000 bonus miles.
  • Purchase 12,000 miles, receive 4,000 bonus miles.
  • Purchase 40,000 miles, receive 15,000 bonus miles.

The bonuses range from 25 to 38 percent, depending on the quantity purchased.

British Airways

Through February 29, British Airways Executive Club members will receive a 25 percent bonus on Avios points purchased for their own accounts or as gifts, up to the annual maximum of 24,000 points, not including the bonus.

Hyatt

Between January 18 and March 15, Hyatt Gold Passport members will receive a bonus of up to 30 percent on their points purchases, as follows:

  • Purchase 1,000 – 9,000 points, receive a 10 percent bonus.
  • Purchase 10,000 – 29,000 points, receive a 20 percent bonus.
  • Purchase 30,000 – 40,000 points, receive a 30 percent bonus.

US Airways

If you purchased US Airways miles last year, you’ve probably been targeted for the airline’s latest buy-miles offer: a one time 50 percent discount when you buy miles between January 15 and 31.

Deal or No Deal

Are any of these offers worth taking advantage of? With the possible exception of US Airways’ hefty discount, probably not, unless you need just a few miles or points to top off your account to reach an award level. The math simply doesn’t work out in the buyer’s favor.

United miles, as an example, normally cost 3.5 cents each, plus a 7.5 percent excise tax. So it would cost $875, not including tax, to purchase 25,000 miles—enough for a restricted domestic coach award ticket. The average price of a domestic coach ticket is currently around $350. So even with a big discount, you’d grossly overpay for the miles unless you make a concerted effort to use the purchased miles for an extra-pricey ticket.

In the end, the math tells the story. Consider the price you’ll be paying to purchase the miles or points and compare that to the market price of a comparable paid flight or hotel stay. In those rare cases where the purchased miles are the cheaper way to go, press the "Buy" button. Otherwise, pass.

Reader Reality Check

Have you bought airline miles or hotel points? Were you satisfied with the value you received from the purchase?

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