When Is It a Good Idea to Redeem Your Miles for Merchandise?

USA Today‘s Charisse Jones has a piece on the things you can do with your miles besides taking flights.

There are the obligatory examples of using miles to purchase “Tumi luggage and MacBook Pro computers” as well as spending them at auction for experiences like Rod Stewart concerts.

The piece offered two of my thoughts.

“More options are good for frequent fliers,” says Gary Leff, co-founder of the frequent-flier community Milepoint.com, who’s noticed the trend building over the past three or four years. “Not everyone wants to fly throughout the year for business and be rewarded with another flight. Sometimes they’d just like to stay home and use their miles for a retail treat.”

… Unique experiences, however, could be perceived as a better deal, Leff says. “When you’re leveraging the connections, the sponsorship, or other clout that a multibillion-dollar business has to open doors you can’t open on your own,” Leff says, “there tends to be much greater value.”

Why Miles are Almost Always Best Used for Travel

Miles are almost always best spent for travel. That’s because earning miles isn’t just a rebate on your travel or credit card spend. If it were, it would be the sort of revenue-based program where you get 10% back to spend on future travel at then-prevailing ticket prices.

No, miles are a rebate combined with the leverage of bulk purchase of distressed inventory.

You take the basic rebate and then pair it with the program’s ability to spend it for distressed inventory (seats that will go out empty, purchased at a deep deep discount relative to retail as a result) and which are purchased in bulk quantities (a program isn’t just buying one seat the way that a customer might, they are buying millions of those distressed inventory seats from the airline).

That’s the sort of leverage you get redeeming miles for travel. You get your rebate to spend on things you get to buy for pennies on the dollar.

When you redeem miles for merchandise you are generally using them just as the rebate — a program buys you merchandise. And you give up the leverage.

Miles for Merchandise Tends to Be a Very Bad Deal

Aeroplan used to offer LCD toasters for 10,000 miles each, and towels for 24,000 miles. Blenders might run 25,000 miles.

A domestic coach saver award ticket might cost a frequent flyer program less than $50. But if you’re going to redeem the same 25,000 miles for merchandise they’re going to have to buy that merchandise.

The program is actually stretching, in some sense being generous, if you get an item that retails for $89 — even though it doesn’t seem like a very good deal to you since the same 25,000 miles could buy you a cross country ticket that would have been priced at $500 or you could have saved your miles and spend 100,000 to go business class to Europe (perhaps $8000).

I don’t often suggest using 25,000 miles for a domestic coach award because it isn’t a very good value. But it’s even worse when using the points for merchandise. 24,500 Aeroplan points will buy you a KitchenAid Architect Coffee Maker.

The Shopping Channel sells that same coffee maker for $89.99 (or 3 easy payments of $29.99..!).

That’s about 1/3rd of one cent per mile in value.

So When Does Redeeming Miles for Merchandise Make Sense?

I believe there are three times when you should consider miles for something other than travel.

  • You genuinely don’t value more travel
  • For accessing experiences you couldn’t obtain on your own
  • Or redeeming a small number of orphan points

If you don’t want more travel, consider using the miles to fly friends and family to you before buying a new toaster.

But if you have a small number of miles in an account — and I usually suggest earning more rather than cashing out — it can make sense to redeem. I had about 4500 Etihad Guest miles and no particular expectation that I would earn more. And I needed a new wallet. Etihad has some of the most extensive miles for merchandise redemption options, and I currently have a new wallet on the way.

Still, a new wallet is hardly a reason to remain loyal. Miles have been able to give me the sort of travel and experiences that I would never be able to afford in my entirely life. I travel more, and well beyond my means, because I’ve had access to these programs. I’d never trade them for merchandise, not even a lawn gargoyle.

But that doesn’t mean there aren’t things you can redeem for that provide outsized value. I don’t like using miles just as a rebate. But if, instead spoiling inventory, you combine it with other clout you can still get leverage for your redemptions.

Airlines, hotels, and credit card companies have sponsorship arrangements with sports franchises. They do deals with music companies. They make arrangements with theatres. Multi-billion dollar corporations generally have access and connections that you or I simply couldn’t replicate ourselves. So if we can put those connections to work for us, it can wind up a good personal value. Here I’m thinking about where you use your points for experiences that don’t have a market price, you can’t just go online and buy the item.

Pizza in Motion, for instance, redeemed Starwood points so his wife could have tennis lessons from Andre Agassi. That may not be your cup of tea, but if there’s an adventure or time with a star, and a program can provide it for you, it might be a good redemption for you.

Usually these things are priced a bit high for my tastes. When they’re auctions they tend to suffer from the winner’s curse (whomever wins does so because they’ve overpaid). But it’s a much better approach, I think, than ordering a new coffee maker in lieu of a business class ticket to Asia.

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About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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  1. I agree that experiences are some of the best redemptions – I am going to the final round of the AT&T National this weekend with tickets valued at $850 that I redeemed 15k SPG points for (.05/point redemption value).

    I love golf, but there’s NO WAY that my wife would have allowed that spend in cash, but it was totally doable in points – a good win win for everyone. Just too bad Tiger isn’t playing. 🙁

  2. The only time when I would have redeemed for merchandise is when there was a price error where there was a Samsung tablet for 16,000 miles.

  3. Last year I booked Frontier flights from SLC – DEN – MCI for $162 RT. This was by FAR the best deal to get to Kansas City so I booked it. I hate flying Frontier. With expiring miles coming up I used miles to get some magazine subscriptions. Normally I wouldn’t use miles for that but since I only fly Frontier when I have to I at least got ~$120 worth of subscriptions for having booked the ultra low fare…

  4. Your analysis is partly wrong. Travel with miles is interesting because it does not cost cash to the airlines.

    A distressed inventory would be sold at distressed rates so your value for the miles would not necessarily be sky high anyway.

    What makes redeeming miles a good deal is that it is a service/product offered by the airline/program at little cost to them (opportunity cost) and more importantly no cash expense for the airline.

    Plus the bulk purchase as you mention.

  5. I have a small business and accumulate an “above average” amount of points. I value travel a lot and always have 3-4 operational trips scheduled. But I will say my best redemption ever was for merchandise. It was back when AMEx did the 40% through certain vendors. I spent 160k points on a ~ $1699 Fender American Deluxe Strat. Was the mathematical value there? No. Is it points better spent than SQ Suites to Bali or taking 5 of my friends to Dublin? To me, yes.. I have a dozen guitars and I certainly can afford to buy the Strat, but I just did it with the points and I haven’t regretted it for 1 sec. It was my little reward.. Sometimes the mathematical value chart doesn’t matter.. Just my $.02

  6. The thing is that US FF programs’ miles don’t expire, though most of the foreign ones do. So, sometimes you need to burn your miles as they are about to expire (and usually these are just small amounts)

  7. Sometimes “miles for magazines” can be a decent value. I spent my father’s orphaned UA miles for a 7 year extension to my favorite magazine; I think I got at least $0.03 cents/mile value out of it. Or it can be a cheap way to extend the mileage expiration date.

  8. I used a few of my frequent flier miles on united that were about expire on magazine subscription so I would not lose almost 20 thousand miles. It gave me another 18 months to use them or add to them.

  9. I’ve used miles for magazines to keep an account “alive”, but not because I was dying to have the magazines.

  10. Redeeming miles for travel is a bunch of crap. I have on a number of occasions tried redeeming miles for international travel and each time I was told that there were no award seats avaliable for the dates I wanted to travel. Even in attempting to up grade to business class on international travel in redeeming miles I was told the same story over and over again. But todate I have not yet given up on trying, but surely if this situation continues to remain status quo … I just may op for merchandise.

  11. At my age 86 I already travelled to every place I wanted to, and now I have a huge amount of redeamable points I would like to exchange for merchandise. I used to receive broshures with available Milage Plus merchandise reward listing, but not anymore. I don’t mean stupid magazine subscription, but usefule and practical items to redeam. .What happened to that??? If this is no longer an option, when was it anounced? What will happen to the unused points?? Can they be gifted to someone? Please let me know.

  12. HELP —— I purchased a Motorola AXHO1 telephone, not realizing that it was not wireless. How do I return it?

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