What do you do with SkyBonus points?

As readers of my eBook (The Free-quent Flyer's Manifesto) know, in addition to individual frequent flyer accounts, airlines also offer "small business" rewards programs, which allow companies that are too small to qualify for corporate accounts to receive rewards for directing their travel towards one airline. Eligibility, earning rates, and rewards vary depending on the airline.

The program I have the most experience with is Delta's SkyBonus program. You can view the program's earning and redemption rates here. SkyBonus is easy to join, gives 3 SkyBonus points per dollar spent on economy tickets to and from Delta hubs (including ATL, CVG, DTW, MEM, MSP, and SLC, but excluding JFK), and 6 SkyBonus points per dollar spent on all other economy flights.

Business class tickets earn 10 and 30 points per dollar to/from hubs and non-hubs, respectively.

Tickets must be issued on Delta, KLM, Air France, or Alitalia ticket stock to earn Skybonus points, and you won't earn SkyBonus points on any taxes or government surcharges. You can easily tell if your ticket qualifies by the first 3 digits of your paid ticket number. If the number begins with 006, 057, 074, or 055, you should be able to earn SkyBonus points.

Now, the first thing you need to know about SkyBonus is that the points are not very valuable. For example, you can redeem 10,000 SkyBonus points for 10 on-board service coupons, good for a premium beverage or headset, or 30,000 points for 4 one-day Sky Club passes (not single-entry passes, like the Scrooges over at United). If you carry a Delta American Express co-branded credit card, then an onboard beverage costs up to $5.25 and Sky Club entry costs $25, putting the value of a SkyBonus point between 0.53 and 0.33 cents each. Still, since you earn 3-6 SkyBonus points per dollar spend on economy tickets, that works out to a 1-3% rebate on the cost of your paid tickets, and travel hacking is all about finding that edge (obviously the rebate value on Business class tickets is even higher). That's how I redeemed my first 40,000 or 50,000 SkyBonus points.

Then I noticed I was accumulating more and more points, and looked at some of the more expensive awards. A round-trip domestic flight in Coach class, in very restricted fare classes, costs 85,000 SkyBonus points. Using the values we calculated previously, that would be more valuable than the beverage coupons if the flight cost more than $450 and more valuable than the Sky Club passes if the flight cost more than $283. Of course, periodically domestic flights do cost that much or more, so this could be a great way to save some money. The trouble is the restricted fare classes SkyBonus tickets are eligible for: in order to be worth saving up your points for an 85,000 point award, you'd need to find an expensive flight – in a cheap fare class! Of course it happens, but you'll need to remember every time you book a ticket to check whether there are eligible fares available.

Managing my SkyBonus account has become a first-world problem for me, since I generally live by the rule that the least valuable point is the one you don't redeem, but I'm drawn to the potentially big payday of a valuable SkyBonus flight redemption. I think for my own points management strategy, I'll probably keep 85,000 SkyBonus points in reserve, in case I need to buy a ticket for someone else (SkyBonus tickets don't earn redeemable or Medallion Qualification Miles) . Then I'll aggressively redeem my miles in excess of that amount for beverage coupons and Sky Club passes.

If you participate in SkyBonus, what's your strategy for points redemption?