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Exchange Your Gift Cards for United Miles

Exchange Your Gift Cards for United Miles

Got gift cards? Rather have frequent flyer miles?

Yesterday, United launched the MileagePlus Gift Card Exchange, a feature that addresses just that need. Henceforth program members can convert the balance remaining in their gift cards from more than 60 retailers into MileagePlus miles.

Exchanges are a three-step process:

  1. Choose a gift card type.
  2. Enter the card’s I.D. number.
  3. Review the offer (how many miles in exchange for the card’s remaining balance), and confirm.

Miles should appear in program members’ account in "about five days."

Among the participating retailers: Banana Republic, Bed Bath & Beyond, Home Depot, Kmart, Pottery Barn, Sears, Target, Victoria’s Secret.

The fine print

  • Value of the gift card must be at least $25.
  • Cards with expiration dates are not eligible.
  • The amount of award miles offered in exchange for the gift card include a 7.5% federal excise tax.
  • Exchanges are final.

Deal or No Deal

According to United’s press release, "The MileagePlus Gift Card Exchange program offers members another convenient way to earn award miles. We are pleased to offer customers new and innovative ways to engage with the world’s leading loyalty program."

Convenient? Check. New? Check. Innovative? Check.

But what about value?

Conspicuously missing from the happy talk is any mention of the exchange rate members can expect when converting their gift card balances into miles.

On the website landing page, there’s this: "You’ll receive the full value remaining on your gift card in award miles."

So, what is that "full value"?

Elsewhere, United elaborates as follows: "Our rates are determined by market pricing, which is affected by several factors. In order to find the rate for your card, please enter your gift card information to receive an offer. You are under no obligation to sell your card, and we will not retain your gift card information if you do not confirm your sale. Please note that the mileage offer you see displayed for the same gift card of the same value may change from time to time."

There is, in other words, a black box aspect to this. Without a set exchange rate when converting card balances into frequent flyer miles, it’s impossible to assess the real value of such exchanges except on a case-by-case basis. That’s likely to detract significantly from the new feature’s popularity and use.

If you received a $25 Starbucks gift card and don’t drink coffee, then it probably doesn’t matter how many miles per $1 you get in an exchange. In this case, convenience trumps value.

But for the resolutely value-conscious, the exchange rate matters. If converting that Starbucks card amounts to buying miles at 5 cents apiece—when their real value is closer to 1.2 cents each—you’d be better off selling the card, even at a significant discount.

For the convenience-oriented, the new exchange feature—representing yet another option for using their miles—is a modest win.

For value-seekers, however, the best that can be said is that your mileage will vary.

Reader Reality Check

Is this a sensible use of your gift cards?

Is it real step forward for MileagePlus, or just a gimmick?

Other Posts of Interest

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  • Martin

    Tim, I would suggest that you ask your readers to test this out and report to you what we were offered for what, with all pertinent specifics. We wouldn’t have to accept any offer; we could each just get UAL’s response and then pool our info via you so that, with a big enough sampling, you and we could draw conclusions as to whether it’s worth our time even bothering to seek UAL’s offer for a card in the future.

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