Originally Posted by
mikeef
This question has been giving me a headache since the beginning of the promo. Do I or don't I count the value of the US miles against the cost of the transfer. I posted about it in the "value of miles" thread.
I have chosen the more conservative method, "don't." The reason is that if I count the miles against the cost, I am essentially double-counting them, since I am also counting them in the denominator when I do my final cents/mile. In other words, I see the miles more on the "revenue" side of the equation.
I'm looking for a good reason not to follow the above methodology, since it would dramatically lower my cents per mile at the end. But I haven't found one yet.
If you only look at them as part of the final grand totals, then you can't judge the cost/value of each hit individually. If you don't judge each hit individually, then you aren't making a fair comparison to choose one hit vs another or even whether to skip some hits altogether and forgo the maximum GS11 bonus.
For a PC transfer, my cost is $60 and I earn 2K miles. But $60 is the total cost of the transfer -- not the cost of the hit itself. For me, there are two cost components to that transfer:
1. The cost of the 2K non-bonus miles.
2. The cost of the hit toward bonus miles.
In order to compare one hit method to another, I need to compare the second (hit) component of each method. To calculate that, I determine my value of the 2K non-bonus miles ($35) and subtract it from my total value of the points that I'm spending ($60). The hit itself costs me $25.
In the spreadsheet, I can log this one of two ways:
1. Enter my calculated cost for the hit ($25) and 0 for my miles.
2. Enter the total cost of the transaction ($60) and 2K for my miles.
The first method means that the non-bonus miles don't get added into the grand totals, but I really don't care about that. I bought those 2K miles outright (from myself) at what I consider fair market value. They simply don't figure into the GS totals at all. All I care about in the chart on the right side of the spreadsheet is whether the most expensive hits are worth their hit cost.
For other transactions, we may think of these as also having other separate cost components:
1. The cost of the non-bonus miles.
2. The cost of the hit toward bonus miles.
3. The cost/value of the product that I'm buying.
- What is the hit cost of a DM Dining dine if you would have dined at that restaurant anyway?
- What is the hit cost of a SkyMall purchase if you buy a 9v battery that you intend to use?
- What is the hit cost of a SkyMall purchase if you buy a 9v battery that you don't intend to use?
- What is the hit cost of an Audience Rewards ticket that you purchase and then resell on StubHub for more than you paid?
- What is the hit cost of a $200/nt Hyatt stay in which you earn US miles rather than earning Hyatt points as you normally would? Would it be better to book a separate stay at a Rodeway Inn for $40 so that you can still earn your points at Hyatt?
If there's a better thread for this discussion, I'd be happy to have it moved over there so as not to clutter up this thread. There are some enhancements that we could make to the spreadsheet to better reflect the hit costs rather than total costs.