Why You Should NOT Buy Points Even if You Have The Southwest Companion Pass

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dhammer53 wrote in to say that you can buy Southwest points for 2.5 cents per point and asked if this is a good deal if you have the Southwest Companion Pass.

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Is it Worth it to Buy Southwest Points?

Buying points usually is not a great deal unless you’re topping-up for an award or if you’ve done the math to see if buying points is cheaper than paying cash for a ticket.

Does Buying Southwest Points Makes Sense

But perhaps it could be different if you’ve got the Southwest Companion Pass?

Emily and I have a Companion Pass and this is perhaps the best miles and points perk which we have.  Why?  Because it lets a companion travel with you for free whenever you travel on Southwest.  It doesn’t matter if your flight is booked with points or paid for with cash – your companion flies free!

You can redeem 1 Southwest point for a fixed 1.67 cents towards their cheapest Wanna Getaway fares.  This is a bad deal because each point costs 2.5 cents, so you’re buying 1 point for 2.5 cents and then using that 1 point for flights worth only 1.67 cents.  That said, buying points could make sense if you’re just a few points away from an award.

But if you have the Southwest Companion Pass, 1 Southwest point gets you 3.34 cents (1.67 cents X 2) towards Wanna Getaway fares.  That’s because your companion gets to fly with you for free (you only pay $2.50 per segment in security fees) even if you book your flight with points (or if someone else books your flight with points).

So maybe it does makes sense to buy Southwest points for 2.5 cents per point if you’re going to redeem them for 3.34 cents per point!

Why You Should NOT Buy Points for a Southwest Ticket With the Companion Pass

No, you’re still better off paying cash even if you have a Southwest Companion Pass!

Let’s say that you ran out of Southwest points and were considering paying $100 in cash for a Southwest Wanna Get Away ticket and adding your companion for free.

A $100 ticket will cost you $100 in cash and you will earn 600 Southwest points (you earn 6 points per $1 towards a Wanna Get Away Fare).  600 Southwest points are worth $10 towards Wanna Get Away fares, so you’re effectively paying only $90.

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You Earn 600 Points With a $100 Wanna Get Away Ticket

On the other hand, you will need 6,000 Southwest points to buy a $100 Wanna Get Away ticket ($100 ticket price X 60 points per $1 ticket price).

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You Need 6,000 Southwest Points (60 Points Per $1 X $100 Ticket Price) for a $100 Ticket

But it will cost you $150 (6,000 X 2.5 cents per Southwest point) to buy 6,000 points, so this is NOT a good value!

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Why Pay $150 When You Can Pay $100?

If you have a Southwest Companion Pass, you’re much better off paying $100 for a Southwest flight and earning 600 Southwest points worth $10, than to pay $150 to buy Southwest points and then redeem them for a Wanna Get Away fare.

Note that the calculations for Business Select and Anytime fares also show that you are better off paying cash for a ticket than buying Southwest points.

Bottom Line

You’re better off paying cash to buy a Southwest ticket once you run out of Southwest points than to buy Southwest points at 2.5 cents per point.  This is true even if you have a Southwest Companion Pass!

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19 Responses to Why You Should NOT Buy Points Even if You Have The Southwest Companion Pass

  1. This is an amusing post . . . not really sure an in-depth analysis is needed to see if it’s worth paying 2.5 cents to get 1.67 cents of value lol. The argument that 1 point gets you 3.34 cents of value although technically true is not really the point here.

    A better way to think about this is to just say if two tickets cost $100 each for $200 total, a companion pass will cut that total in half making it $100 total. Now you’ve separated the contribution of the companion pass versus that of using points and you can go back to saying 1 point gives you 1.67 cents of value. Would you want to pay 2.5 cents to get 1.67 cents? No. Ok, buy the ticket with cash. By saying 1 point gets you 3.34 cents of value, it’s attributing the benefits of the companion pass to the point when it should be it’s own thing.

  2. I agree this is just common math, but there are some who are bad at it and they will find this post useful. Looks more and more filler posts these days or maybe the readership has been requesting some basic info posts these days.
    Hopefully he gets some time to scoop deals from FT with circle and arrows soon. I don’t have the time to read the forum.

  3. I finally have a few friends who are interested in getting in on “big travel, small money” after seeing my husband and I travel almost for free for the last 18 months. This is the blog that I point them to in order to educate themselves as beginners. Thank you for your concise, clear posts. Even if they don’t always interest me, I am sure a lot of your readers benefit from them.

  4. Milwaukee Nick

    This is a useful post for newbies. Quite frankly, I had to buy Hyatt points last year in order to get the Southwest Companion Pass by 12/31. I literally bought $200 worth of Hyatt points and trasferred them over – they hit on 12/31 and I got the Companion Pass for 2013. Between my wife and two kids, we will easily exceed the $200 cost to make the CP worthwhile.

  5. @D,
    I see southwest gift cards at OD or Staples and wanted your opinion. Is buying them with an ink bold a good idea? You will 5x UR plus 6x SWA per dollar.

  6. This guy doesnt know about UR pts, if he decided to buy its only $25 per 1k (2.5 cent) and transfer almost instantly. if its a must, this is a better bargain.

  7. Great post D, what about SWA GC at Staples with Ink Bold?

  8. @WeddingSpend @AnonyMoss – I’ve been asked this question before, so I thought it would be good to write a post on it.

    @Jasmine - Thanks for reading!

    @Milwaukee Nick – Congrats on the Companion Pass. Buying Southwest points directly from Southwest doesn’t count towards the Companion Pass, so it is worth it to buy hotel points for the Companion Pass.

    @choi – It costs the same (2.5 cents) to buy Ultimate Rewards points or Southwest points, but you are limited to only 5K Ultimate Rewards points per card account, per month.

    @Grant - It is worth it if you will be flying on Southwest and will be paying cash for the ticket. 5X is quite worth it, but it depends on how much time it takes to go to the stores.

  9. I keep seeing the 1.67 cents a point, but SW does have web only specials. I’m looking at a flight right now for $124, but the points are 6120. By my math, that is 2 cents a point.

    Obviously, you can’t count on that kind of fare, but they do exist.

  10. Grover's Bathtub

    It could be worth it to buy points instead of cash on expensive Southwest routes with (capacity-controlled) Standard Award space. For a round-trip, you would pay $480 for 19200 points which could then be converted into a Standard Award (explained by MileValue at http://milevalue.com/how-to-exploit-the-southwest-airtran-merger/ ). Not cheap, but there are plenty of Southwest WGA fares that are well above that amount (even accounting for the rebate on paid travel).

  11. @MilMileSecrets, right and it wasn’t a critique like the next guy. I wanted to offer my view that paying 2.5 cents for 1.67 value is . . . well paying 2.5 cents for 1.67 value. And one way to help someone understand that is by looking at it from another angle, which separates the benefit of the companion pass.

  12. Sure, it’s simple math, but one thing it reminds newbies of is that you earn miles/points on paid tickets. A lot of people forget to factor that in when debating a paid ticket vs. award redemption (particularly for an airline like Southwest where availability isn’t as big of a factor).

  13. @Amol

    And right now there is a double points promotion. Combined with a southwest gift card from office supply, and you get at least 17 points per dollar.

  14. Did you and Emily have a fight or what? I have not seen pictures of her lately!

  15. I like the timing of this post because I just earned companion pass status today thanks to coming across your blog 3 months ago. this is an appropriate time to say thank you for all of the information you post even though some other people obviously don’t like that you share it with people that are new like me. I try to be reasonable with it even though this is very exciting stuff, and I have learned a lot, made some mistakes, done a lot of research and definitely pay attention to FT and share what I can. Anyway this a great hobby and its great to have info like yours to save a lot of trouble, so thanks again!

  16. @Daraius @choi UR pts don’t count towards CP. Transfer over 1,000 pts and your CP pts balance will not change

  17. @WeddingSpend – No offense taken.

    @Scott – Shhh… That was my Saturday’s post!

    @jason – Ha! I included some in the trip report today.

    @elle – Congrats and thanks for reading!

    @Joncski - That’s correct – they don’t count towards the Companion Pass and neither does buying points directly from Southwest count towards the Companion Pass.

  18. Pingback: The Best of Million Mile Secrets - May 2013 | Million Mile Secrets

  19. What about now that southwest gives 40% extra for every purchase. Plus if points are purchased you still get the 2pts per one dollar. This promotion is running until July 31. I did my math with current tickets from Houston to Colorado like you did. Regular purchase ticket it cost 1.82 cents per mile (11720point for ticket vs $213.70). Buying points 12600pts. for $247.50 = 1.96 cents per mile but when you include the 2pts per $1 on the mile purchase: 1.77 cents. Is this worth it and i’m not even sure if i did my math right!

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