The Best Redemption is the One That Works for You: A Reminder to Take the Plunge

Q & A: Is this a Good Redemption?

I often receive some version of the following questions: 

• What's the best use of my points?
• Is this [insert prospective award fare or hotel booking] a good redemption?

My very best answer: The best redemption will always be whichever one works for you. 

Feel like a cop-out? Let's talk about it. When attempting to answer these questions for themselves, many folks quickly dust off the old long division to compute the point per cent or (point per dollar amount) for each prospective redemption. IMO, travelers can, at times, fall victim to putting too much weight on point valuations (attempts to pin a fixed dollar value to a given reward currency - i.e., 1 Wyndham Rewards point = 1.2 cents). I see this with long-time rewards enthusiasts and those new to points and miles. I'm not suggesting points valuations aren't helpful - they certainly can be. But they are just averages, and it's essential to recognize that they are also subjective. 

You've run the numbers and done the research: 80,000 miles can get you two business-class flights to Australia with a stopover in Fiji next year, and those exact 80,000 miles will also get your entire family of four back to the east coast (and back home) for the holidays. The business class redemption is something you've always wanted to do! The itinerary costs much more in cash, so you're getting a higher points per dollar rate…but things were tighter this year, and securing your holiday travel for nothing more than taxes and fees would relieve a lot of stress. Which of these is the better redemption for you? Only you can answer that.

A Note on Points Valuations

Point valuations shouldn't be the only factor or the leading determinant of where and how you redeem your rewards. I'm not going to pin an economic treatise to the door of the nearest Best Western, but know that point valuations are inherently imperfect for a slew of reasons, one of which is that they are not 1:1 for cash. Furthermore, points and miles are meant to be redeemed. It's not as if you can store them in a bank and gain interest. You can't fire up your eTrade app, buy some shares of NVDA with your Phillipine Air Mabuhay Miles, and enjoy the dividends that will come your way. 

More often than not, it's the opposite. Sitting on points indefinitely, waiting for that perfect, top-dollar redemption, makes you susceptible to loyalty program evaluations. That's why I suggest folks:

1) have at least a few-item-long wishlist of redemptions they'd like to make and strike when you see one (or more of them) have become available

2) remember how helpful points and miles can be when budgets are tighter and in emergencies

Of course, there's nuance to this. Sometimes, you'll need to stack and save points to redeem them for your target goal. The most important part of that last sentence, though, is 'target goal.' It's why you travel. It's what you want. Perhaps it's what you need to get you out of a jam in a moment. Whatever it is, remember redemptions are why you chose to earn points or miles (as opposed to cashback) in the first place.

Points Can Mean Much More than Dollars and Cents

You really want to fly Emirates first class. You've found availability for a flight next month, but it's at a different redemption rate - not a saver fare - meaning you'll need to spend a good amount of points to take that flight. You've got the time off work and already found a great rate on a hotel, but you're hesitant - you know that the same flight will cost fewer miles at a different time, and you're worried about 'wasting' some extra miles. So you freeze. Why, though? Isn't first-class something you've always wanted to experience? Do you genuinely believe that you'll be thinking about that extra 30,000 miles while you're 30,000 feet in the air, enjoying a glass of bubbly, eyes glued to your 13 X 13 screen, watching the dramedy you've heard all about? You'll likely be laying flat, catching some Z's in short order.

Some overzealous software engineer at one of the world's largest cybersecurity companies pushed shotty code into production, creating a nasty bug that took down a central operating system. This bug crashes the core computing systems of many airlines, causing them to ground all flights immediately and bringing 85% of international travel to a screeching halt. Unimaginable, I know. Still beaming from that amazing curry and roti you crushed in Brixton as what you believed was your last lunch of the trip, you're now on your way to Heathrow when you receive the alert to your phone that you've been automatically rebooked for the same flight tomorrow. You get to the airport, attempt to do the whole customer service thing, and after an hour or so, accept that you'll be spending another night in town. Cheerio. You pull over near a gift shop, open up a browser window on your phone, and start searching for nearby hotel rooms, only to find that all of the airport hotels are booked solid. Let's try Marriott—a peculiar result on the Bonvoy app. On the map view, just a few miles away, you notice what appears to be a castle (lol) with availability on points! What's more—you've got a free night award that will cover the night's stay. Use it now or save it for later and pay $700? While pondering that, you hear what sounds like a mumble-rap remix of an old Bee Gees song.

"How Deep are your Pockets, HOW-DEEP-ARE-YOUR-POCKETS? Do you have the cash to BURN.." Kids these days.

As travel armageddon continues around you, you immediately realize that while it's summer in London, it's time for you to come in from the cold.

We'll do one more. You want to do something special for your dad. He's got a milestone birthday, and he's always wanted to do something adventurous. If only there were a way to treat him to something great while saving some money with points and miles. You've accumulated quite a stash of hotel points from all the work travel you've done over the past few months. You were banking on using the same points next year for a trip to somewhere 'luxurious.' After a few minutes of searching, things get very real. You're slightly in disbelief?...but found an all-inclusive stay at Kruger National Park, available on points. Game drives, food, snacks, gratuity, everything included. Perfect. What is the cost to redeem? 400,000 points. Darn - less than perfect. All of your points will be gone. You could pay cash and stash those points for that 'yet-to-be-determined' use sometime in the future. How many opportunities will you get on safari, essentially for free? Can you put a price on seeing your dad's face light up when you see an elephant in the wild? A lifelong A's fan, he's been out of the country just once before. Don’t get me wrong, Stomper is great, but papa’s gonna have some stories to share. 

The point is that in times of low pressure and leisure and in high-stress times of tight resources, there are always going to be opportunity costs and trade-offs, and you are the sole arbiter as to what the 'best' thing to do is. The worst thing you can do is sit, paralyzed by fear that you're not getting every dollar you could have a potential redemption and miss out on something great or, at the bare minimum, helpful. One of the best parts about points and miles? There are always opportunities to earn more. So remember that any decision YOU make to redeem your points will undoubtedly be the 'right' one; just take the plunge.