A 40% Bonus on a Bad Deal is Still a Bad Deal!

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I wasn’t going to write about this, but I’ve been getting email and comments about whether it is worth taking advantage of a 40% bonus when you convert gift cards into United miles.

United 40 percent Bonus

It still is a Bad Deal!

United allows you to convert gift cards into United miles, but the regular exchange rate is terrible.  For example, a $50 Kroger gift card converts to only 1,330 United miles.

This means that you’re buying United miles at 3.76 cents per mile (5,000 cents/1,330 United Miles) which is the same price which United sells miles for, and is not a great deal!

But with typical marketing chutzpah, United has sent out emails announcing:  “Earn a 40% bonus when you turn gift cards into award miles.”

Except that this is still a bad deal.

Instead of getting 1,330 United miles for a $50 gift card, you now get a 40% bonus or 540 extra miles (which is actually a 40.6% bonus).

So your $50 gift card gets you 1,870 United miles (1,330 base miles + 540 bonus miles).  But you’re still paying 2.67 cents per mile (5,000 cents per mile/1,870 United miles).

United 40 Bonus-1

$50 Kroger Gift Card = 1,870 United Miles

This is ~30% lower than the 3.76 cents per mile if you buy miles directly from United, but it isn’t a great deal.

For example, if you needed 25,000 miles for domestic US flight, you’d be paying $ 668 (25,000 miles X 2.67 cents per mile) for that flight!

I wouldn’t buy a gift card for $50 and convert it into United miles at 2.67 cents per mile unless I was short of miles for an award which I needed to book soon.

However, this is a good way to buy miles for ~30% less than what United sells them for.  But that doesn’t make it a good deal.

I’m sure you can get some cash back by buying gift cards through a cash back site and reduce the cost of buying United miles even further, but I doubt it would make this a good deal unless you can get a gift card for 40% or more off its face value.

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3 responses to “A 40% Bonus on a Bad Deal is Still a Bad Deal!

  1. I had 2 gift cards from Albertson’s totaling a little under $60. My wife’s birthday was earlier this month and I converted the Albertson’s GC’s into two different $25 GC’s plus there was $9.59 left. In California (where we live), any GC with less than $10 left can be cashed out for cash! I cashed out the one GC with $9.59 into cash & got rid of the GC’s.

    If I was short on an United award, I would just move enough Chase Saphire points (CSP card) to top off to an award. (my wife has the Sapphire card).

    Bottom line: Bad value on converting GC’s to UA miles unless one is to top off an award, has no CSP card and the GC is not too much. Another way for UA to gouge the public!

  2. This deal is useful for the following scenario:

    If you have zero miles in your account and you want to apply for the Credit Card bonus that requires you to have miles in your account.

  3. David Gutierrez

    This is such a poor offer. I agree. Insane to pay over 3 cents a mile.