Southwest Increases Points Redemptions by 15%

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The bad news is that you need 15% more Southwest points to redeem a Wanna Get Away ticket (Southwest’s lowest price tickets).

The somewhat good news is that the 15% increase doesn’t start until March 31, 2014.  So try to book all your Southwest flights using points BEFORE March 31, 2014.

Southwest Increases Points Redemptions by 15%

15% Increase in Southwest Wanna Get Away Fares from March 31, 2014

In my opinion, Southwest is the best frequent flyer program for travel within the US.  That’s because Southwest has lots of non-stop flights from different airports, lets you check-in 2 free bags, and has a friendly crew.  They also let you cancel or change flights for free without change fees which can be up to $200 on other airlines!

And whenever an airline or hotel provides much more value than their competitors, I know from personal experience that the pressure is on company executives to justify that the outsized benefits helps the bottom line.  So it is very common to see airline and hotel miles and points devalue.

Or to have airlines and hotels make changes to their programs which increase their profitability, but reduce benefits to members.

I certainly don’t like it, but that’s the nature of the points and miles hobby.  Companies continually look for ways to cut costs and reduce benefits when they don’t need to provide it or are providing way more benefits than the competition.

Currently a Wanna Get Away award ticket will cost 60 Southwest points per $1.  So each Southwest point is worth ~1.67 cents (100 cents / 60 Southwest points) towards an award ticket

But from March 31, 2014, a Wanna Get Away award ticket will cost 70 Southwest points per $1.  Which makes 1 Southwest point worth ~1.42 cents (100 cents / 70 Southwest points) or a 15% reduction.

What Does This Mean?

A $344 ticket from Kansas City to San Francisco in April 2014 currently costs 18,000 points.

Southwest Increases Points Redemptions by 15%

18,000 Points To Fly From Kansas City To San Francisco If Booked Before March 31, 2014, but 21,000 Points After That!

But that same $344 ticket would cost ~21,000 points (instead of 18,000 points) if I booked it after March 31, 2014!

Southwest’s schedule is only loaded through April 6, 2014, but you can book award tickets at the current rate of 1 Southwest points = 1.67 cents towards Wanna Get Away fares even for travel after March 31, 2014.

You can book your trip using points even if your plans are tentative, because you can get the points back without paying a change fee if you have to cancel your flight.  So wait until the schedule opens out for beyond April 6, 2014 and lock in your awards at the higher redemption level.

Southwest is not making any changes to Anytime or Business Select award tickets (at least not now).

Companion Pass

I’ve written lots on the Southwest Companion Pass and think it is the best deal for our domestic US travel.  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 (~$10 in taxes and fees)!

The Southwest credit cards have a 50,000 point sign-up bonus after spending $2,000 within 3 months up to October 31, 2013 and the sign-up bonus currently counts towards the Southwest Companion Pass.

At 1.67 cents per Southwest point, you’d get ~$850 in flights on Southwest.  But you’d get only ~$710 worth of flights at 1.42 cents per point.

But $710 in flights within the US from just 1 credit card is still very good!

Bottom Line

From March 31, 2014, Southwest will increase the cost of redeeming Wanna Get Away fares from 60 Southwest points per $1 to 70 Southwest points per $1.  This  reduces the value of 1 Southwest point from 1.67 cents to 1.42 cents.

So wait for the schedule to open beyond April 6, 2014 & book your flights on Southwest before March 31, 2014 to get the most out of your points!

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44 Responses to Southwest Increases Points Redemptions by 15%

  1. In the typical program, devaluation can be somewhat justified from time to time, since the value of a reward in cash terms gradually increases. For example if 50,000 miles buys a ticket worth $1,000, then as the cash ticket price rises to $1,200, there’s some logic to changing the award chart to require 60,000 miles. We don’t like it, and many times a devaluation doesn’t really track cash value, but there’s an argument that it should logically happen from time to time.

    In the case of Southwest, however, where the points are already completely linked to cash value, a devaluation should not happen. This is just the company saying, “Sorry, there are too many points out there and we’re going to confiscate 15% of your points in April.” At 1.67 cents, Southwest points are close to competitive with the better programs. At 1.42 cents they’re still a lot better than Skypesos, but that’s about it. I’m going to burn everything by the deadline and step away from the program. At least Skypesos don’t expire, so they’ll be there if I can ever find a seat.

  2. Well said, DaveS….

    Sorry, there are too many points out there and we’re going to confiscate 15% of your points in April.”

    I’ve also suddenly encountered some Southwest shenanigans with points, just as I’m within 1% of the threshold for the Companion pass. Earlier this summer, I started using the Southwest shopping portal, and was pleased at how quickly the earned miles and bonuses would post. (usually within 2 to 3 days of purchase) I’m now sitting at 108,800

    Yet two weeks ago, I made several purchases, with bonuses totaling close to 2,000 points. They were immediately credited to the Southwest shopping account (one day later), but now all of the sudden, no transfer posting to the Southwest RR’s account.

    (Yes, I know the boilerplate that this could take many weeks, but past repeated experience was more like 2 days)

    Simple crass explanation: somebody at SW put a “hold” on my RR’s account, deliberately, to block me from getting the Companion pass….. the more they delay it, the more I’ll protest here and elsewhere.

    Yes, they’re looking to save money (from me not getting the companion pass).

    We’ll see how long they keep this hold up.

  3. ps to Daraius, I am appreciative as always of your efforts here. Thanks to you, I’m even this close to earning the the cp. I also appreciate the alert to book the miles asap, before they get devalued.

    Yet in the end, despite your well crafted eloquence, balance, and attention to details, this still amounts to putting lipstick on the proverbial pig.

    What will they think of next?

  4. This does not bother me one bit actually. This is the best domestic flight deal there is!!! I mean assuming you have the companion pass who cares-i dont. With 110k plus to start and all the sales swa has these points last a long time and you can probably get about 7-8 roundtrip tix so 14-16 free tickets for two people!!! This great, trust me i can pay an extra 2-3k here or there. They are also great for positioning flights! We are using the CP to Lax the using the avios the Hawaii in november and just a few weeks ago we went to boston using the CP and used avios to go biz class to dublin!

  5. Not the end of the world but this definitely hurts. I still LOVE southwest because of the flexibility and zero fees. I’m surprised they are making this change before they fully integrate airtran booking.

  6. The 50,000 sign up bonus for Southwest is still an absolutely great deal—–especially with the companion pass offer.

    However, buying a Southwest ticket with your points will now cost you 16.6% more points. The base price was sixty points per dollar? They have increased the price to seventy points per dollar which is ten additional points. A 10 point increase on an item originally costing 60 points is ——————10 divided by the original price of 60 which is 16.6%.

    Whether it’s 15% more or 16.6% more, Southwest is still the way to go.

  7. Troy, it should bother you. With this change, Southwest is charging more points for domestic flights than other domestic airlines. In Daraius’ example above, it would cost you 21,000 points from Kansas City to SFO. United charges 20,000 for a domestic round trip anywhere in the US. USAir charges 25,000, but with the 5,000 mile discount from having the card, it would also only be 20,000. Southwest just isn’t the low cost airline they used to be. An extra 2-3k here or there adds up to another round trip on a different carrier.

  8. @DaveS @escot – We forget that Southwest is a business and their primary task is to offer enough enticement to consumers, but to not offer too much. I don’t like devaluations either, but EVERY single program will have them. You’ll never have any frequent flyer program which never tweaks earning or redeeming rates – regardless of whether they are so called “fixed value” or not. Bottom line is that Southwest knows that they have a great program and they know that even with these changes that they are an attractive program.

    @Norm S. – 1 Southwest point was worth 1.67 cents, but is now worth 1.42 cents, so I got a 15% increase.

  9. Sorry, Daraius, but your math is wrong. Something that costs 60 points is now 70 points, an increase of 16.6% (the difference of 10 points divided by 60 is 16.6%). Think about this: If your salary increased from $60,000 to $70,000, that’s a 16.6% increase. How is this any different?
    I’m a business consultant, and I often have to educate my clients on the difference between markup and margin. An item costs $1.00 wholesale. Mark it up 50%, and you sell it for $1.50. However, you’re not making 50%; you’re making 33.3% (the 50 cent profit divided by the selling price of $1.50). You’re looking at it as if Southwest is discounting the value by 15% (1.42 is a 15% discount from 1.67); but they’re not; they’re INCREASING the price (markup).
    I’ve been a long time cardholder and Rapids Reward member. A long time ago, 16 credits got you a round trip ticket. $1000 spend on a credit card got you one credit. Then they upped the ante to $1200 spend = one credit, or a 20% increase. They they made seats harder to come by when they came up with the concept of Anytime Awards (basically, using double credits). Then, 2 1/2 years ago, they changed from credits to points, and I’m having a hard time finding a decent flight to use up my last remaining round trip on credits. So to those who say it’s not a big deal, here’s some historical perspective.

  10. Yes, it hurts that SW is increasing the points needed for flights, but I still find them to be one of the easiest to get free flights. Lisa’s comparison for KC to SFO isn’t exactly accurate. That route is just one of hundreds of variable point examples. I’m flying FLL to San Juan in November for 12,000 points R/T. Even with the increase it would still be under 15,000 points. I don’t know of any other carrier that offers free RT flights for that little. I’ve also seen current fares where it would cost a lot more to redeem on SW than other carriers–FLL to El Paso is one example(costs close to 30,000 points). So they’re not always the best deal. SW is always offering deals where their prices go down, and so do the points needed. Where else can you book a flight at one point value and then cancel and rebook if the price drops without penalty? I’ve done that many times. And no blackout dates for the point flights. And you can’t complain if you have the Companion Pass! Oh, and I find it hard to believe that someone at SW is blocking 2,000 points from the shopping portal just to prohibit someone from getting the Pass. SW has no control over the portal and how slow points may or may not post. There are plenty of ways to get 1200 points to earn the pass.

  11. Old news! Other sites posted this when it happened.

  12. Lisa. Cant cancel or change other airline without huge fee. 1 change every 4 or 5 flights more than offsets the SWA ponit cost. Plus no bag fee. And valid for ALL SWA flights. .. not so for others. Let us look at the whole picture.

  13. If Southwest needed a way to reduce the cost of having a Rapid Rewards program, I wish they decided to increase ancillary revenue on awards with something like change fees or checked bag fees on award tickets, instead of a devaluation. If they did that, it still wouldn’t have hurt their identity as a no-fee airline (Southwest still would have had no fees on paid tickets) and would have still helped their bottom line. That being said, inflation is a natural part of life, and if the Southwest community is earning points at a faster rate, then a devaluation is bound to happen.

  14. Lisa, pretty sure United charges 25k miles for domestic RT (they do have an exception for short distance flights).

  15. To be clear, this a 16.7% increase in the number of points required that drives a 14.3% reduction in the value of each point.

  16. UA charges 25K miles for most r/t flights in the US. They drop that to 20K for short flights, under 700 miles each way (or 10K for a one way ticket).

  17. Brandon, I don’t think you understand the details behind this devaluation. This is a true devaluation, with no tie to inflation whatsoever. Rapid Rewards points are fixed-value, and tie to actual price of the tickets. In case of inflation, as the ticket price for a flight increases, points to redeem for a flight increases. Here, Southwest is devaluing the points themselves, with no regard to the ticket price. Along with the relatively young age of the program, no logical reasoning/explanation for this devaluation basically lost my trust in this airline. And I’m sure I’m not the only one.

  18. I am currently having Chase Sapphire, Citi Hilton, Hyatt, SW Personal+business, SPG Amex, Priority club and Citi Amex cards. Can I reapply for SW Personal+business or Chase Sapphire or SPG Amex again without cancelling the previos one?? Which should be the go to card if there is no need to meet minimum spending requirement?

  19. @Nav – There are 4 versions of the Southwest card, and you can get the bonus for each of them. The terms of the AMEX SPG card say that you have to had cancelled the card for 12 months before getting the bonus again.

  20. You couldn’t be more wrong in defending Southwest here. DaveS is right and you are wrong. The point of a revenue based program is that the point value is supposed to stay static. What Southwest is doing is in fact raiding our accounts for about 14% of their values. Darius, you just don’t get it. If Southwest wants to change the redemption rate that is fine. But to take away the value of the points we already earned under the premise that they were worth ~.0167, is flat out wrong. If Southwest were to do the right thing, they would adjust the accounts to reflect the current value. It’s not right to confiscate 14% (or any %) since the points we earned were tied to a very specific monetary value. IMO? Underhanded.

  21. Opinions cannot be wrong.

    I tend to agree with Daraius. The FF miles with SW are abundant with all of the signup offers we get for card churning.

    The availability on flights is also superior to anything United or “Denver’s Airline” Frontier offer. Hunting for FF seats is legitimately annoying, really a hassle to find seats for flights, and two are nearly impossible to book. You have to watch constantly for those seats.

    I do have a question, Daraius, you said hotels and car rentals are 2X with the SW card, but I thought the 2X was only through Southwest’s site? Are you saying any hotels earn 2X with the SW card, or only if booked through Southwest? I have yet to find a great deal on anything through Southwest for hotel or car rentals.

    We did get the Ink Bold when you had the 60K mile bonus link on your site. I have noticed our hotel stays, even our Marriott Vacation Club and other timeshare maintenance fees are earning 2X with that card, which is amazing! We also spend around $500 per month on cell phone, business phone, satellite TV and internet. We really love the 5X points for those.

    Thank you for all of your helpful advice.

    Cindy

  22. @Cindy and Rick - It is 2X for car and hotels booked via Southwest and not directly. Where did you see the reference to 2X on car/hotels? I’ll edit it to be clearer. I pay the fee on the Ink card because off all the points I earn.

  23. All of you arguing about the percentage change in value are wrong. You’re forgetting the opportunity cost involved in booking a ticket with points – you will no longer earn points for that ticket. So assuming you buy WGA fares, the true cost before the change was 66 points per $1 (the 60 points you spent and the 6 you gave up by not buying the ticket with dollars) making the previous value 1.5151 cents. Now the true cost is 76 points per $1 which works out to 1.3158 cents per point. The value is even lower if you consider the progress towards A-List or Companion Pass from flying on a revenue ticket. Of course none of this takes into account the fact that the point cost is based on the base fare and all the taxes and fees other than the 9/11 security fee are waived if you book an award ticket. That increases the value of points a little bit, but it’s impossible to value that part precisely since it depends on the value of the ticket you buy. You get the best value using your points for cheaper tickets as the waived taxes/fees are a higher percentage of the overall value. The opportunity cost isn’t affected by this since point earning is also based on the base fare and doesn’t take into account taxes/fees.

  24. I never had a single point in my RapidRewards account. The day I get the sign-up bonus from Chase the devaluation is announced. Can this be coincidence? :)

  25. Alfredo Gomez

    I wonder if ahead of the change in exchange value, it would make sense to change my Southwest Points into Airtran miles/flights? For 1200 rapid rewards points + 1 A+ Airtran credit. Would be curious if anyone had thoughts on that.

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  33. I have a question….. what happens with booking a fare at the current rates, then rebooking later? In the past this has always been a bonus of SWA points travel, you can rebook with ease if your dates change,or the price drops…..now what? any advice?Say I book a flight for next Sept.,and then I have to alter my date a bit in 3 months….. will I be charged the higher price to rebook? or will it rebook at the current rate?

  34. @JM – I believe you will be charged the higher price.

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