Miles for cash?

Dear Tim,

Do any airline or hotel loyalty programs offer a “redemption for cash” option? If so, at what rate are their points converted into cash and what’s the process? Thanks!

Harry

Dear Harry,

While a number of the hotel programs offer gift certificates
and gaming chips?which are only one step removed from
cash?only Amex Membership Rewards actually allows you to
redeem points for cash. Here’s how it works:

A cardmember may redeem in increments of 20,000 points for
$100 in cash, up to $300 in cash (60,000 points) per calendar
year.

Payment of the cash will be made by a credit to the
cardmember’s card account. Credits will not be made to a
cardmember’s Corporate Card account. Corporate cardmembers,
other than Small Business Corporate cardmembers, with only
the Corporate Card enrolled in the Program may not redeem
points for cash.

Another possibility: redeem Diners Club points for U.S.
savings bonds (which ultimately convert to cash). For 42,000
DC points, you get a $500 savings bond. And if you’re a
Mileage Plus member, United and DC have a special arrangement called “Miles for Points” whereby you can convert up to 50,000 Mileage Plus miles per year into DC points at a 1:1 rate. So, in effect, you’d be redeeming United miles for a savings bond.

As a side note, the programs’ core value proposition depends
on non-cash awards, such that the “retail” value of the award exceeds by a large multiple the program operators’ cost to deliver the award (i.e., a free ticket might have a perceived value of $500 to the program member; but it would only cost the airline $50 to carry that award passenger). With cash or near-cash awards, the economics just don’t allow the programs the same leeway to construct a compelling payout proposition.

Tim Winship
Contributing Editor
SmarterTravel.com