Oct 6, 2013, 5:07 pm
Last edit by: nsx
In late September Southwest began sending out emails announcing that starting March 31, 2014, we would need to "pay" 70 points per dollar of cash fare when redeeming for a Wanna Get Away fare (the non-refundable cash fare class). This is an increase from the 60 points per dollar level set at the beginning of the new revenue-based Rapid Rewards program two and a half years ago. Whether you call this a 14.3% devaluation or a 17% increase in points required, it's the same damage.
The official notice is at http://www.southwest.com/html/genera...oints_faq.html
This thread discusses three main subjects:
1. Given that the point price for any award increases in lockstep with the cash fare, and given that cash fares are increasing, doesn't devaluing the exchange rate constitute a double dip price increase? Shouldn't a revenue-based redemption program maintain a fixed exchange rate?
2. The devaluation applies not just to new earnings, but to points earned when there was no hint that the redemption exchange rate would ever change. Is this fair or was it to be expected? Should Southwest gross-up existing points balances, so that the devaluation affects only future earnings?
3. This thread contains some discussion touching on the effect this devaluation will have on customer perceptions of the merits of revenue-based redemption programs relative to chart-based redemption programs.
The official notice is at http://www.southwest.com/html/genera...oints_faq.html
This thread discusses three main subjects:
1. Given that the point price for any award increases in lockstep with the cash fare, and given that cash fares are increasing, doesn't devaluing the exchange rate constitute a double dip price increase? Shouldn't a revenue-based redemption program maintain a fixed exchange rate?
2. The devaluation applies not just to new earnings, but to points earned when there was no hint that the redemption exchange rate would ever change. Is this fair or was it to be expected? Should Southwest gross-up existing points balances, so that the devaluation affects only future earnings?
3. This thread contains some discussion touching on the effect this devaluation will have on customer perceptions of the merits of revenue-based redemption programs relative to chart-based redemption programs.
[Wiki] WN 14% Devaluation of RR2 points for WGA redemption effective March 31, 2014
Sep 23, 2013, 1:02 pm
#61
Join Date: Nov 2010
Programs: AA EXP (owe), BA Silver (ows), AB Silver (owr), WN A+/CP, IHG Spire AMB, Avis First
Posts: 1,414
well, it was bound to happen sooner or later at the rate they were handing out points.... sad for this to happen to a revenue based program, but probably handing out A-list like hotcakes and the bonus% weren't being properly factored into their calculation. Guess this will make me revalue the effective discount I get on BS tickets. problem is, with a revenue based program, adjusting the bottom tier will hit causal travelers the hardest...
As some others have said in this thread, many of us _knew_ this was bound to happen eventually. In this day in age, where loyalty programs are getting slashed left and right, at least they've been relatively nice about it - we have about 6 months to redeem at the current rates... and that is valid for bookings past the six months...
While I like getting the most out of loyalty programs, the business side of me was questioning how long Southwest was going to keep doing this, and why it took them so long to implement it. My guess is that they either (a) engineered an evaluation to happen 2 years in, (b) didn't notice how much points were costing them until people redeemed them for travel this summer (c) it just took IT a really long time to implement the 60->70 pt transition...
on a related note, I REALLY hope they adjust the anniversary bonus on those cards accordingly. Otherwise, it's probably time to churn...
As some others have said in this thread, many of us _knew_ this was bound to happen eventually. In this day in age, where loyalty programs are getting slashed left and right, at least they've been relatively nice about it - we have about 6 months to redeem at the current rates... and that is valid for bookings past the six months...
While I like getting the most out of loyalty programs, the business side of me was questioning how long Southwest was going to keep doing this, and why it took them so long to implement it. My guess is that they either (a) engineered an evaluation to happen 2 years in, (b) didn't notice how much points were costing them until people redeemed them for travel this summer (c) it just took IT a really long time to implement the 60->70 pt transition...
on a related note, I REALLY hope they adjust the anniversary bonus on those cards accordingly. Otherwise, it's probably time to churn...
Sep 23, 2013, 1:06 pm
#62
Join Date: May 2007
Location: DFW
Programs: WN A+, AA, HYATT DIAMOND, SPG
Posts: 1,125
Only problem is that these aren't free seats. Every point we get into our accounts is paid for by some other transaction. That's how the rev based program works. So the points that I use to spend on these 'free' flights have already been paid for.
The agreement that they made with us is that the points we received had a static value because that's what they got paid for them or some semblance of that idea.
They are looking for more money (so they've basically taken from our accts) to help them out of their self-induced problem... their labor contracts.
The agreement that they made with us is that the points we received had a static value because that's what they got paid for them or some semblance of that idea.
They are looking for more money (so they've basically taken from our accts) to help them out of their self-induced problem... their labor contracts.
Sep 23, 2013, 1:07 pm
#63
Join Date: Sep 2012
Location: Western US
Programs: WN CP, WN A-List Preferred, AS MVPG 75k, SPG Gold, Hilton Gold, Hyatt Diamond
Posts: 554
With all the substantial devaluations in a very rapid amount of time, I can't help but switch from WN being my preferred domestic airline. This devaluation in the value of points in the RR program, which is already revenue based, is the last I can take.
I can't figure out why anyone at Southwest would think that a devaluation of a revenue based points system is an intelligent move, it simply angers too many customers. With a revenue based program even the most math inept are going to understand their points are worth less. At least the legacies can count on the fact that the majority of the public not understanding a devaluation due to program complexity.
I can't figure out why anyone at Southwest would think that a devaluation of a revenue based points system is an intelligent move, it simply angers too many customers. With a revenue based program even the most math inept are going to understand their points are worth less. At least the legacies can count on the fact that the majority of the public not understanding a devaluation due to program complexity.
Sep 23, 2013, 1:11 pm
#64
Join Date: Jul 2002
Location: New Orleans, AA EXP, DL PM, SPG PLT, HH Diamond
Posts: 3,750
feel free to substitute the word "award' for 'free'.
Only problem is that these aren't free seats. Every point we get into our accounts is paid for by some other transaction. That's how the rev based program works. So the points that I use to spend on these 'free' flights have already been paid for.
The agreement that they made with us is that the points we received had a static value because that's what they got paid for them or some semblance of that idea.
They are looking for more money (so they've basically taken from our accts) to help them out of their self-induced problem... their labor contracts.
The agreement that they made with us is that the points we received had a static value because that's what they got paid for them or some semblance of that idea.
They are looking for more money (so they've basically taken from our accts) to help them out of their self-induced problem... their labor contracts.
Sep 23, 2013, 1:13 pm
#65
Join Date: Dec 2012
Posts: 1
southwest Wanna Get Away devaluation
I got email from Southwest Airline saying they are going to devaluate their Wanna Get Away point redemption option starting April 2014. The wording is as follows,
Wanna Get Away® reward flight bookings made on or after March 31, 2014 will require 70 points per dollar. This is an increase from the 60 points per dollar currently required. Anytime and Business Select® reward flight redemption rates, as well as the points per dollar you earn when flying, will remain the same as they are today.
Please feel free to share your thoughts.
Wanna Get Away® reward flight bookings made on or after March 31, 2014 will require 70 points per dollar. This is an increase from the 60 points per dollar currently required. Anytime and Business Select® reward flight redemption rates, as well as the points per dollar you earn when flying, will remain the same as they are today.
Please feel free to share your thoughts.
Sep 23, 2013, 1:13 pm
#66
Join Date: Jul 2002
Location: New Orleans, AA EXP, DL PM, SPG PLT, HH Diamond
Posts: 3,750
Yep, Chase could potentially be a big loser in this...
well, it was bound to happen sooner or later at the rate they were handing out points.... sad for this to happen to a revenue based program, but probably handing out A-list like hotcakes and the bonus% weren't being properly factored into their calculation. Guess this will make me revalue the effective discount I get on BS tickets. problem is, with a revenue based program, adjusting the bottom tier will hit causal travelers the hardest...
As some others have said in this thread, many of us _knew_ this was bound to happen eventually. In this day in age, where loyalty programs are getting slashed left and right, at least they've been relatively nice about it - we have about 6 months to redeem at the current rates... and that is valid for bookings past the six months...
While I like getting the most out of loyalty programs, the business side of me was questioning how long Southwest was going to keep doing this, and why it took them so long to implement it. My guess is that they either (a) engineered an evaluation to happen 2 years in, (b) didn't notice how much points were costing them until people redeemed them for travel this summer (c) it just took IT a really long time to implement the 60->70 pt transition...
on a related note, I REALLY hope they adjust the anniversary bonus on those cards accordingly. Otherwise, it's probably time to churn...
As some others have said in this thread, many of us _knew_ this was bound to happen eventually. In this day in age, where loyalty programs are getting slashed left and right, at least they've been relatively nice about it - we have about 6 months to redeem at the current rates... and that is valid for bookings past the six months...
While I like getting the most out of loyalty programs, the business side of me was questioning how long Southwest was going to keep doing this, and why it took them so long to implement it. My guess is that they either (a) engineered an evaluation to happen 2 years in, (b) didn't notice how much points were costing them until people redeemed them for travel this summer (c) it just took IT a really long time to implement the 60->70 pt transition...
on a related note, I REALLY hope they adjust the anniversary bonus on those cards accordingly. Otherwise, it's probably time to churn...
Sep 23, 2013, 1:20 pm
#68
Join Date: Jul 2002
Location: New Orleans, AA EXP, DL PM, SPG PLT, HH Diamond
Posts: 3,750
Good luck in getting the lowest level award seats on AA.
They've come a long way since I followed them in a financial sense back a few years ago. While the rest of the airlines were having to deal with rising oil prices, WN purchased a good supply of oil futures at a cheap price. Now, I'd rather catch an AA flight from MIA to TPA instead of driving to FTL for WN. And all for the same pricing.
Sep 23, 2013, 1:35 pm
#70
Join Date: Dec 2010
Posts: 352
While this does indeed suck and I'm not happy about it, I supposed it could be worse (like Hilton).
While I don't love SW, I do appreciate that when I need a flight, if I have points I can book them for a reasonable amount, if the price lowers I instantly get the points back, free baggage, etc.
Again, not pumping my fist and high fiving my wife but overall still a pretty decent program.
While I don't love SW, I do appreciate that when I need a flight, if I have points I can book them for a reasonable amount, if the price lowers I instantly get the points back, free baggage, etc.
Again, not pumping my fist and high fiving my wife but overall still a pretty decent program.
Sep 23, 2013, 1:40 pm
#71
Join Date: Feb 2004
Location: USA
Programs: AC SE100K, F9 100k, NK Gold, UA *S, Hyatt Glob, Bonvoy Titanium
Posts: 5,195
I have always accounted for my points as a percentage of fares paid, as I buy or travel. Southwest accounts for their unredeemed points as a liability for free travel.
The system was never broken. If I earned them 2 years ago and I chose to redeem them immediately, great. If I wanted to wait 2-3 years, then that works out the same or even better to Southwest. Say I'm an employee who travels for business. Over the last 10 years in my career I could earn a million points then have free personal travel for a long time. Now Southwest decides arbitrarily to take away 15% of them (maybe every 2 years?) They redemption value has already gone down on its own (by design) as airfare price increases happen.
Also, Southwest continues to exclude points bookings from most of their lucrative sales/offers. This in itself causes rewards points to be devalued lower than what they were originally advertised to be.
How is this any different from a cell phone company charging you a $30 upgrade fee when you get a subsidized phone renewal, or another airline charging you a $20 processing fee to book an award flight.
The system was never broken. If I earned them 2 years ago and I chose to redeem them immediately, great. If I wanted to wait 2-3 years, then that works out the same or even better to Southwest. Say I'm an employee who travels for business. Over the last 10 years in my career I could earn a million points then have free personal travel for a long time. Now Southwest decides arbitrarily to take away 15% of them (maybe every 2 years?) They redemption value has already gone down on its own (by design) as airfare price increases happen.
Also, Southwest continues to exclude points bookings from most of their lucrative sales/offers. This in itself causes rewards points to be devalued lower than what they were originally advertised to be.
How is this any different from a cell phone company charging you a $30 upgrade fee when you get a subsidized phone renewal, or another airline charging you a $20 processing fee to book an award flight.
Sep 23, 2013, 1:42 pm
#74
Join Date: Jul 2002
Location: New Orleans, AA EXP, DL PM, SPG PLT, HH Diamond
Posts: 3,750
Still think it's one of the best out there... If there's an empty seat you can get it, plus if you watch and catch the lowest airfares, you can still get some good bargains using points.
While this does indeed suck and I'm not happy about it, I supposed it could be worse (like Hilton).
While I don't love SW, I do appreciate that when I need a flight, if I have points I can book them for a reasonable amount, if the price lowers I instantly get the points back, free baggage, etc.
Again, not pumping my fist and high fiving my wife but overall still a pretty decent program.
While I don't love SW, I do appreciate that when I need a flight, if I have points I can book them for a reasonable amount, if the price lowers I instantly get the points back, free baggage, etc.
Again, not pumping my fist and high fiving my wife but overall still a pretty decent program.
Sep 23, 2013, 1:44 pm
#75
Join Date: Jul 2002
Location: New Orleans, AA EXP, DL PM, SPG PLT, HH Diamond
Posts: 3,750