Rapid Rewards devaluation coming April 17, 2015
#301
Join Date: Mar 2011
Posts: 6,286
So WN continues to rake in earnings off Chase from their scores of freshly-minted, 50k+ points and companion pass "earning" customers, while actual loyal flyers pay the price.
#302
Moderator: Southwest Airlines, Capital One
Join Date: Sep 1999
Location: California
Programs: WN Companion Pass, A-list preferred, Hyatt Globalist; United Club Lietime (sic) Member
Posts: 21,586
Exactly. It's the same story with all airlines. It's nothing personal. It's just that we aren't changing our buying behavior enough to cover the cost of the points we have been earning from flying. The credit card users ARE covering the cost of their points.
#303
Join Date: Mar 2011
Posts: 6,286
Points sold to the credit card companies turn into a cash asset, while the points earned by flyers are solely carried as a liability. The net redemption cost to the airline for any point is the same, but one generates cash income as a line item when created, and the other is really just a percentage of the profits being realized from a ticket sale converted into a liability. With the ratio of points earned linked to ticket price, I don't see any way for flyers to "change their buying behavior" enough to ever make a difference by themselves, unless that percentage of the ticket price that covers the points is increased, or the amount earned from the card companies per point is decreased.
#304
#305
Join Date: Feb 2004
Programs: IHG Spire Elite; Hyatt Platinum; SPG Preferred+; Club Carlson Gold; SW CP
Posts: 674
This is a bit of a tangent... What are you using your Hyatt card for? I ask because other than the great signup bonus and the annual free Cat 1-4 night, there isn't too much reason to use the Hyatt card for purchases. If your goal is to earn Hyatt points you're better off getting and using a Chase Sapphire Preferred card as you can transfer the points you earn with it to Hyatt at a 1:1 ratio and the card has bonus 2X categories (dining and travel) which the Hyatt card does not.
#306
FlyerTalk Evangelist
Join Date: Sep 2002
Location: Chicagoland, IL, USA
Programs: WN CP, Hilton Diamond
Posts: 14,164
#307
Join Date: Feb 2005
Location: EWR/JFK
Programs: AA GLD 1.xMM, MAR SLV, HH DMND, IHG PLT
Posts: 834
So come 4/17, if the redemption goes above 100 RR points per $1 of airfare for that peak/holiday period then we are better off reddening WN gift cards with our RR points to pay for the ticket. Okay, I guess that does put a floor on how bad it gets.
I am holding off on getting the 2nd credit card for the mrs in order to hit companion pass till this gets cleared up in the spring.
I am holding off on getting the 2nd credit card for the mrs in order to hit companion pass till this gets cleared up in the spring.
#308
Join Date: Mar 2011
Posts: 6,286
- Gift cards are shipped, not delivered electronically, and that takes time (generally about a week, sometimes less). In that time the price of your flight may have increased. (One way to avoid this might be to keep a stockpile of gift cards ready for use as needed.)
- Only $50 and $100 denominations are available, so you may need several to book an itinerary, and will be subject to Southwest's odd limits on forms of payment.
- Purchases made with gift cards aren't refundable like points transactions, if you refare/cancel/rebook you'll receive travel funds linked to passenger name and with expiration in one year from date of purchase.
- You'll pay the additional taxes and fees that don't apply to points purchases.
- There's no guarantee that WN gift cards will always be available through the More Rewards portal, and/or that the redemption rate will stay at 100 points/$1.
- But… on the upside, your purchase using a gift card will earn new points.
#309
FlyerTalk Evangelist
Join Date: Sep 2002
Location: Chicagoland, IL, USA
Programs: WN CP, Hilton Diamond
Posts: 14,164
With some considerations.
- Gift cards are shipped, not delivered electronically, and that takes time (generally about a week, sometimes less). In that time the price of your flight may have increased. (One way to avoid this might be to keep a stockpile of gift cards ready for use as needed.)
- Only $50 and $100 denominations are available, so you may need several to book an itinerary, and will be subject to Southwest's odd limits on forms of payment.
- Purchases made with gift cards aren't refundable like points transactions, if you refare/cancel/rebook you'll receive travel funds linked to passenger name and with expiration in one year from date of purchase.
- You'll pay the additional taxes and fees that don't apply to points purchases.
- There's no guarantee that WN gift cards will always be available through the More Rewards portal, and/or that the redemption rate will stay at 100 points/$1.
- But… on the upside, your purchase using a gift card will earn new points.
#310
Join Date: Feb 2007
Location: LAX/SMF/PDX/HNL
Programs: Hilton-lifetime diamond, Southwest A+, companion pass
Posts: 1,731
"You'll pay the additional taxes and fees that don't apply to points purchases."
Slight edit--->taxes and fees DO apply to point purchases. $5.60 minimum.
Slight edit--->taxes and fees DO apply to point purchases. $5.60 minimum.
#311
Join Date: Mar 2011
Posts: 6,286
- Excise Taxes
- Segment Fee
- Passenger Facility Charge
The only fee that applies to points purchases is:
- Security Fee
(My assumption here was domestic travel. On international, you do pay destination-specific taxes on both types of bookings.)
#312
Join Date: Feb 2008
Location: Nashville, TN
Programs: WN Nothing and spending the half million points from too many flights, Hilton Diamond
Posts: 8,043
In a small way this may have a silver lining. Well, maybe an aluminum lining.
I ancient days, the government wanted to tax FF miles as income. They were foiled as the miles have variable redemption rates and an exact value was impossible.
However, they left vulnerable programs that carried a specific dollar value redemption rate. One was created. Now there are none.
I ancient days, the government wanted to tax FF miles as income. They were foiled as the miles have variable redemption rates and an exact value was impossible.
However, they left vulnerable programs that carried a specific dollar value redemption rate. One was created. Now there are none.
#313
Join Date: Oct 2001
Programs: LTP, PP
Posts: 8,690
With some considerations.
- Gift cards are shipped, not delivered electronically, and that takes time (generally about a week, sometimes less). In that time the price of your flight may have increased. (One way to avoid this might be to keep a stockpile of gift cards ready for use as needed.)
- Only $50 and $100 denominations are available, so you may need several to book an itinerary, and will be subject to Southwest's odd limits on forms of payment.
- Purchases made with gift cards aren't refundable like points transactions, if you refare/cancel/rebook you'll receive travel funds linked to passenger name and with expiration in one year from date of purchase.
- You'll pay the additional taxes and fees that don't apply to points purchases.
- There's no guarantee that WN gift cards will always be available through the More Rewards portal, and/or that the redemption rate will stay at 100 points/$1.
- But… on the upside, your purchase using a gift card will earn new points.
Can the super smart amongst us put a number on at what point multiplier it makes sense to go the gift card route? So many variables, i.e if its for yourself, you earn points (at what value though?), if a gift for someone else it doesn't matter as much.
#314
Join Date: Apr 2000
Location: san antonio, texas
Programs: 3.2MM AA, 1.4MM UA,StwdLftPlt
Posts: 1,586
NSX, that's just hyperbole. What else, besides perhaps listing a few routes and destinations, can they tell us at this point? And those routes and destinations will change over time in terms of RR pricing.
The new redemption scheme is going to be dynamic and change based upon seat availability, amongst other things.
Just like the formula they use for determining boarding order for AL, they aren't going to share this with us.
I completely agree that the devaluation sucks, but I just don't see what else they can tell us right now.
The new redemption scheme is going to be dynamic and change based upon seat availability, amongst other things.
Just like the formula they use for determining boarding order for AL, they aren't going to share this with us.
I completely agree that the devaluation sucks, but I just don't see what else they can tell us right now.
#315
Join Date: Mar 2011
Posts: 6,286
Suddenly that .01 floor isn't looking so solid anymore! A lot of work and planning needed. Gift card shipping cost?
Can the super smart amongst us put a number on at what point multiplier it makes sense to go the gift card route? So many variables, i.e if its for yourself, you earn points (at what value though?), if a gift for someone else it doesn't matter as much.
Can the super smart amongst us put a number on at what point multiplier it makes sense to go the gift card route? So many variables, i.e if its for yourself, you earn points (at what value though?), if a gift for someone else it doesn't matter as much.
The taxes/fees are offset by the points earned (on domestic), and the rest is really about convenience. I feel like the point multiplier value will be different for individual flyers depending on how much they value the refundability of points purchases vs TTFs and the general inconvenience of using gift cards on their particular purchase.