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Rapid Rewards devaluation coming April 17, 2015

Rapid Rewards devaluation coming April 17, 2015

Old Mar 3, 2015, 11:03 pm
  #301  
 
Join Date: Mar 2011
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Originally Posted by nsx
I think so. All airlines realize that FF programs don't motivate enough additional sales to justify even the current value of points earnings. Only the points sold to banks and other partners carry their weight.
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.
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Old Mar 3, 2015, 11:24 pm
  #302  
nsx
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Originally Posted by ursine1
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.
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.
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Old Mar 4, 2015, 12:24 am
  #303  
 
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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.
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Old Mar 4, 2015, 1:07 am
  #304  
nsx
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Originally Posted by ursine1
I don't see any way for flyers to "change their buying behavior" enough to ever make a difference by themselves
The only way is if RR lures customers from AA and the other majors. That may have been the case with double points promotions in past years. It's not now.
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Old Mar 4, 2015, 7:03 am
  #305  
 
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Originally Posted by Exiled in Express
My card renewal is October, 90% chance I am not renewing it. Hyatt and Citi Double Cash have replaced its use on all but SWA air purchases. Hopefully that be included in the monthly report to senior management.
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.
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Old Mar 4, 2015, 11:58 am
  #306  
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Originally Posted by Hot Pocket
Anecdote, my wife has a WN CC, is my Companion, travels the US for free, and generally "gets" the whole game, but would tell me I was insane if I told her we were redeeming WN points for gift cards.
Well, until 4/17 at least; afterward, who knows?
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Old Mar 4, 2015, 12:15 pm
  #307  
 
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Originally Posted by nsx
1. The alternative to redeem for gift cards (for RR Visa holders)
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.
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Old Mar 4, 2015, 1:13 pm
  #308  
 
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Originally Posted by miles_navigator
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.
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.
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Old Mar 4, 2015, 5:03 pm
  #309  
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Originally Posted by ursine1
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.
You're as much of a downer as I am.
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Old Mar 4, 2015, 9:07 pm
  #310  
 
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"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.
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Old Mar 5, 2015, 12:14 am
  #311  
 
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Originally Posted by dlaue
"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.
With a cash (or gift card) purchase, you'll pay the additional taxes and fees that don't apply to points purchases. Those taxes and fees are:
  • 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.)
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Old Mar 5, 2015, 5:30 am
  #312  
 
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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.
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Old Mar 5, 2015, 1:54 pm
  #313  
 
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Originally Posted by ursine1
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.
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.
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Old Mar 5, 2015, 2:03 pm
  #314  
 
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Originally Posted by texashoser
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.
From Southwest's perspective, once you have opted for the dynamic pricing route, what purpose does it serve to announce a ceiling? Just like Delta yanking the award charts, it seems to me that is clearly advantageous in this "whatever the market will bear" approach to obfuscate the cost as much as possible.
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Old Mar 5, 2015, 2:44 pm
  #315  
 
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Originally Posted by joshua362
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.
Gift cards ship for free (for now at least).

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.
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