Unbelievable and likely based on your in-law rationalizing that they are "only points and have no monetary value". But, you will be dining off of/telling this story for years. Something not terribly dissimilar happened to me once, although not with a relative, and I’ve told the story enough, and got enough laughs, that I think I’ve been fairly reimbursed.
You might want to make a note to yourself to not gift the B-I-L with any more nights...or anything.