Originally Posted by
ajf87
Amex negotiates those credits with Saks, Uber, Doordash, etc. For the end consumer they have a $10, 15, 200 redemption value but Amex doesn't actually eat that full amount. They negotiate a discount through those merchants because they're going end up with more sales overall. It's no different than their bulk purchasing of airline miles, they pay a wholesale rate that is not accessible to individual consumers.
Certainly. We all know that. This is how AmEx can afford to give out those "benefits". Saks credit probably worth 60%. Uber is either 0% or 100%, so average 50%. Airline credit is dying. Most people do not need Equinox since we join local YMCA or gym etc.
But airport lounges are like buffet restaurants. If some big eaters keep going there for all the pricy items and often, then restaurants can't continue for long. But they are happy to take in some 5-10 year old kids and charge them 1/2 price. those kids just eat some fried food and ice cream. They cost little to the restaurants than some pricy fresh seafood.
I'm pretty certain that AmEx does not make $$ from the 5x MR air tickets and 4x grocery + dining.