Successfully liquidating 3rd-party gift cards with CardCash

Gift card reselling is a manufactured spend technique that sees periodic surges in interest. At its base, it’s is as simple as any technique: buy gift cards at a big enough discount, or with enough of an earning bonus, and sell them at a small enough discount to make the points you walk away with worth the difference.

Players cycle in and out of this space with some regularity, and then are inevitably washed out by the inherent precarity of this line of business: a single batch of compromised gift cards can wipe out the usually-slim margins and cause an entire enterprise to tip into insolvency.

Revisiting CardCash

Checking back through my e-mail, it looks like I first used CardCash to liquidate Hewlett Packard gift cards back in 2016 when it was possible to generate unlimited points and cash by recycling them. I hadn’t used CardCash since, and while I didn’t remember having any problems with them back then, I didn’t even know if the site was still around.

Fortunately, it still is, and I was able to successfully use them to liquidate some Adidas gift cards I purchased during a recent promotion.

Bonus Safeway 4 U points on Adidas gift cards

Most weeks, the grocery stores around me run promotions for discounts or bonus points on gift card purchases. The promotions are usually for third-party gift cards, although last week Giant ran a formerly-common, now-rare promotion for bonus points on Visa prepaid debit cards.

Last week, Safeway ran a global promotion for 10 bonus Safeway for U points per dollar spent on Adidas gift cards. Since third-party gift cards usually earn one Safeway for U point per dollar, this meant you could earn 5500 points (55 Rewards) for each $500 Adidas gift card you purchased, plus any credit card rewards you earned on the purchase.

This was a nice combination of a big mainstream retailer (rather than a niche merchant like Top Golf) and a substantial bonus, so I decided to pencil out whether it made sense as a gift card reselling play.

Putting CardCash through its paces

Since it had been so long since I used CardCash, and the promotion lasted all week, I decided to run a few experiments before going all in. Fortunately, CardCash offers the same payout rate on all card denominations, so I first bought two $75 Adidas gift cards (the minimum to trigger the Safeway promotion), and submitted one to CardCash on Wednesday requesting a PayPal payout, and one on Thursday requesting an ACH payout. Both orders were immediately “confirmed” by e-mail, and both were “accepted” on Friday. I received the PayPal payment Friday afternoon and the ACH payment on Monday. The cash payout rate was identical at 80.5%, or $60.38.

With those experiments successfully completed, I was then confident enough to buy three more Adidas gift cards for $500 each.

Alternative redemption options

While CardCash will pay out cash, they also allow you to exchange third-party gift cards for other cards at a higher value. The highest redemption rate available was (and still is as of this writing) Hotels.com gift cards at $446.78, or 89.36% of face value.

I don’t have any special love for Hotels.com, but I do use them periodically when they have competitive rates or cancellation conditions for stays I don’t want to use points on. In fact, I have already booked two upcoming trips that added up to almost exactly the $1340.34 I’d get from swapping out Adidas gift cards. In my case, the Hotels.com gift cards were literally as good as cash to me.

Request for Proof of Purchase/Origin

I submitted my first two $500 cards on Friday and Sunday, and on Monday received an e-mail with the subject line “Request for Proof of Purchase/Origin” and the order number for my Friday order. The e-mail read:

“Thank you for choosing CardCash to sell your gift cards.

“To ensure secure transactions, please reply to this email with proof of purchase/origin for the gift cards you intend to sell. Please choose from the suggested examples or attach any other applicable documentation when replying to this email:

1. “Purchase receipts or invoices with transaction details.

2. “Documentation supporting their legitimacy, such as proof of employee incentives, loyalty rewards, or other valid sources.

3. “Additional details or explanations that provide clarity on how the gift cards were obtained.

“Upon receiving the requested information, our team will review it promptly.

“Providing this information is crucial in maintaining our commitment to a safe and trustworthy platform.”

I e-mail a photo of the card packaging, the back of the gift card, and the Safeway receipt showing the purchase details a little before noon and a little before 1 pm I received both a polite e-mail back and two e-mails with links to my newly-minted Hotels.com gift cards.

My third order was accepted without any additional verification.

Doing the math

I value Safeway Rewards in volume at about $2.39 each. They are only worth this much in volume, because more expensive awards also give better value. A single Reward is worth at most a dollar or two, while 7 Rewards are worth around $19.50. The 55 Rewards earned on a $500 Adidas gift card were therefore worth about $131.45 to me.

Selling Adidas gift cards for 80.5% of face value ($402.50) would still be slightly profitable, especially if you have a particularly high-value redemption in mind. But if you value Hotels.com gift cards the same as cash, as I did, then the value proposition becomes much more attractive, as I paid just $53.22 for what I conservatively value at $131.45 in Alaska Airlines miles.

"Transfer" timeline for Just 4 U Alaska Airlines Mileage Plan redemptions

Last month I wrote about the option of redeeming Albertsons (and their subsidiaries) Just 4 U rewards for Alaska Airline Mileage Plan miles. The option of redeeming, for example, 7 Just 4 U rewards for 1,300 Mileage Plan miles instead of a $10 grocery reward is the functional equivalent of buying Mileage Plan miles for 0.77 cents each.

If you can generate (or have stockpiled; more on that below) more Just 4 U points than you can use for actual groceries, that's a perfectly sensible redemption, especially if you’re saving up miles for a premium award on one of Alaska’s partners.

My April Alaska Airlines redemptions posted in one batch on May 1

What I could not answer in that earlier post is how long it takes miles to appear in your Mileage Plan account after you’ve ordered a redemption. That’s because one or both of the programs backdates your miles to the date of the Just 4 U redemption, not the date they become available for Alaska Airlines awards.

In April I could see that I had placed an order for 100 Mileage Plan miles on January 27, and I could see 100 Mileage Plan miles dated January 27, but I could not see when the miles actually became available.

[Note: I say I could see the order “in April” because Just 4 U only shows your order history for 90 days, so when I wrote that post on April 6 I could still see my January 27 order, but I cannot see it in my Just 4 U order history any more.]

That being the case, over the course of April I made four additional Just 4 U redemptions, on the 6th, 14th, 19th, and 29th, and made it a point to check my Mileage Plan account every morning to see if anything had posted. That way, while I might not catch the exact moment the miles became available, I would know within a pretty narrow window.

That’s how I found out that all four of my Just 4 U redemptions (three for 100 miles and one for 250 miles) all posted on May 1, 2023.

Obviously one datapoint is neither dispositive nor permanent. For all I know they post miles every 45 days and May 1 just happened to be 45 days after the last batch posted in March. But that seems less likely than all of each month’s mile redemptions posting sometime on or around the first day of the following month.

There’s no point redeeming aggressively but there’s no point waiting

Batched posting like this means, on the one hand, you don’t need to immediately redeem each reward as you earn it (as a reminder, you earn one reward for every 100 points you earn in the Just 4 U program, and larger redemptions give better value) since if you get your redemption in by (near) the end of the month you’ll receive the miles on the same day as you would have, had you redeemed earlier in the month.

On the other hand, each Just 4 U account’s redemption inventory resets every week so if you are earning more rewards than you know what to do with, you don’t want to miss a redemption opportunity by sitting on your hands either.

About that stockpiling strategy

Normally, “rump” Just 4 U points expire at the end of the month they’re earned and rewards expire at the end of the month after they’re earned. Back when it was trivial to amass unlimited Just 4 U points alongside credit card rewards a number of people pointed out that these rewards could be extended indefinitely by signing up for a paid FreshPass subscription. I’m sure there are plenty of people still eating for free on the rewards they earned back then!

This naturally raises the question: if another opportunity for unlimited Just 4 U points comes along, should you pay for a FreshPass subscription in order to redeem 22 rewards per week for Alaska Airlines miles? How many subscriptions? One for every member of your family? One for your dog?

This is not, fortunately, a question I can answer for you because it goes to the heart of how you choose to play the game. I chose not to get a FreshPass subscription and stockpile rewards back then simply because that’s who I am: after I’d filled up my fridge, and my freezer, and my cupboards, and my linen closet, and my local free pantry, I just stopped. Paying $99 per year to buy groceries I didn’t want or need for the rest of my life or until the program was devalued simply didn’t have any appeal for me. I wrote it up for my Subscribers-Only Newsletter and moved on.

On the other hand, I know lots of people who stockpile every currency under the sun on the off chance they find an opportunity to score the perfect luxury redemption. The thrill of finding first class award availability or consecutive exotic award nights with one currency is simply more exciting than seeing the value of another hoard whittled away by devaluations, mergers, or bankruptcies is discouraging.

And if you’re one of those people, then why not add Just 4 U into the mix? Of course, I don’t need to tell you that: you probably already have!

Just 4 U Alaska Airlines redemptions work, for what it's worth

A few months back a number of bloggers reported that Just 4 U rewards (the rewards program of Albertsons grocery stores and its countless sub-brands) could be redeemed for Alaska Airlines Mileage Plan miles.

How it works

The basic mechanism is simple. When a Just 4 U account has a store in Alaska designated as your “preferred store,” then you’ll see the following redemption options:

• 1 Reward: 100 Mileage Plan miles.

• 2 Rewards: 250 miles.

• 3 Rewards: 400 miles.

• 4 Rewards: 600 miles.

• 5 Rewards: 850 miles.

• 7 Rewards: 1300 miles.

Thus, you can redeem a total of up to 22 Rewards per week per Just 4 U account for a total of up to 3,500 Mileage Plan miles.

As a reminder, you earn 1 Reward each time you earn 100 Just 4 U points. Just 4 U points expire at the end of each month, but Rewards expire at the end of the month after they’re earned. Paid FreshPass membership keeps your Rewards from expiring indefinitely.

Mileage Plan Miles Versus Grocery Rewards

If you have access to unlimited Just 4 U points, then the “grocery rewards” double dip is the most valuable option because it allows you to stack multiple grocery rewards redemptions on a single purchase, even to the point of generating a negative balance (although since this will invariably raise suspicion, I recommend spending the negative balance instead, for example by buying a prepaid debit card).

That technique lets you redeem 44 Rewards for $64 off your bill when you buy $20 in groceries (leaving you with $44 to spend on dairy, alcohol, gift cards, or anything else that isn’t usually eligible for Rewards).

Note that the grocery rewards option is only more valuable because of the double dip. If you could not double dip grocery rewards, then redeeming 7 Rewards for 1,300 Mileage Plan miles instead of a $10 grocery reward looks a lot more attractive. Lots of people would be willing to buy Mileage Plan miles for 0.77 cents each, at least at the margin.

What this means is that while double dipping grocery rewards may be the best combination of Just 4 U redemptions, single dipping Mileage Plan redemptions at the 7-Reward level is a solid alternative after you’ve redeemed those and have Rewards left over each week. And this is, in fact, more common than you might think.

Leftover Just 4 U Rewards

Take, for example, last week’s offer for 10 Just 4 U points per dollar spent on Google Play cards. Since you can buy cards up to $500 in value, the maximum earning per card is 5,000 Just 4 U points, or 50 Rewards. After redeeming 44 Rewards through the grocery rewards double dip, you’re left with 6 Rewards. By earning a single additional Reward (or using a leftover Reward from a previous week), you can also redeem for the highest-value Mileage Plan reward the same week, before repeating the process the next week.

I don’t engage in much gift card reselling anymore, but when very high earning rates are offered on high-value cards (or even cards you plan to use yourself), you may be able to break even or turn a profit on Just 4 U rewards in addition to the credit card rewards you earn on the original purchase.

Comparing IHG's 4th-night-free with Marriott and Hilton's 5th-night-free

I was reading Danny the Deal Guru’s write-up of the latest Chase IHG Rewards signup offers and something jumped out at me: the 4th-night-free benefit offered to cardholders, including those who hold the no-annual-fee IHG Rewards Traveler card. To be clear, this isn’t a new benefit, it’s just one I haven’t had a chance to think about in depth.

Generally speaking, I don’t rate IHG or their rewards program very highly, because while they have an enormous global footprint, they’re rarely competitive compared with the main hotel programs I rely on, Hilton and Hyatt. For example, I regularly visit Portland, OR, which on a sample search turned up two downtown Hyatt properties priced at 12,000 World of Hyatt points, a Hilton priced at 37,000 Hilton Honors points, a Marriott priced at 30,000 Bonvoy points, and a Kimpton priced at 25,000 IHG Rewards Club points (plus a nightly “amenity fee”). For a one-night stay, it would be ridiculous to choose the IHG property unless you’d built up a large orphaned balance through various shenanigans.

Since my framework is manufactured spend, not signup bonuses, it’s easy to make a direct comparison between the options:

• 12,000 World of Hyatt points transferred from Chase Ultimate Rewards is worth $120 in cash.

• 37,000 Hilton Honors points earned at 6 points per dollar with the American Express Surpass co-branded card is between $123 (if the same $6,200 in spend had been put on a 2% cashback card) and $185 if the points were purchased for 0.5 cents each, an offer which is regularly available, including now through March 7, 2023.

• 30,000 Marriott Bonvoy points are worth between $240 (if you bought the points during one of their periodic promotions) and $300 (if you transferred the points from Chase Ultimate Rewards.

• 25,000 IHG Rewards points are worth between $150 and $175 if you buy them using the “points and cash” trick (purchasing points while making an award reservation, then cancelling the reservation and having the points refunded to your account).

This makes comparing the four sample reservation options, and indeed comparing all reservation options at the four chains, easy, if on average:

• World of Hyatt points cost 1 cent each;

• Hilton Honors points cost 0.42 cents each;

• Marriott Bonvoy points cost 0.9 cents each;

• and IHG Rewards points cost 0.65 cents each;

then on a one-night stay you can convert the points cost of any property into the cash cost of manufacturing, transferring, or purchasing the required points. In the concrete example above, we saw that Hyatt and Hilton were quite competitive, while Marriott and IHG Rewards were significantly more expensive options.

On four-night stays, the equation changes, but only for IHG Rewards points. On four-night stays at the other three chains, the cost per point remains the same, while the 4th-night-free benefit offered by the IHG Rewards credit cards increases their value by 33% or decreases their cost by 25% to 0.49 cents each — same difference. The four-night IHG Rewards stay now costs just $122 per night, putting it squarely in the middle of the “competitive” pack of Hyatt and Hilton, or even on the cheaper end (ignoring that pesky Kimpton amenity fee, which you obviously shouldn’t in practice).

Moving to a five-night stay, the equation shifts again, but this time against IHG Rewards, since Hilton and Marriott both offer the fifth night free on award stays. The cost per night on the sample five-night stays with Hilton is $123 per night, with Marriott is $216, and with IHG $130. Hyatt doesn’t offer free nights on longer stays so their cost per night remains flat at $120.

Reference Card

I wanted to use a specific example to explain why I personally don’t care for IHG Rewards, but in case you want to bookmark this post or paste the values into your notes app, here are the shortcuts when calculating the cost of stays of various lengths.

Stays of 1-3 nights:

• World of Hyatt: 1 cent per point

• Hilton Honors: 0.42 cents per point

• Marriott Bonvoy: 0.9 cents per point

• IHG Rewards: 0.65 cents per point

Stays of exactly 4 nights:

• IHG Rewards: 0.49 cents per point

Stays of exactly 5 nights:

• World of Haytt: 1 cent per point

• IHG Rewards: 0.52 cents per point

• Hilton Honors: 0.34 cents per point

• Marriott Rewards: 0.72 cents per point

Now you can easily calculate the cost of reward stays of up to 5 nights in length in every city in the world — not just in Portland, Oregon!

When should you optimize for spontaneous, planned, or predictable expenses?

I like to generalize travel hackers into three broad categories, although none describes any individual perfectly.

Roughly speaking, I think of opportunistic travel hackers as people who keep an eye on signup, referral, and manufactured spending opportunities in order to maximize the value of their earnings throughout the year. I doubt this is the largest category, although it receives the most attention from mainstream blogs, so in some ways it’s the easiest to get involved in. Frequent Miler, for instance, hosts a simple page indicating what current signup bonuses are available and how they compare to previous offers.

The flip side of opportunism is that because it’s opportunistic, it’s unlikely to directly or even closely correspond to your needs. For example, take a look at how Gary Leff is currently promoting the Citi American Airlines business credit card right now: “70,000 by the way is what it costs from the US to the Mideast, India or Maldives on Qatar. You can even fly Qatar’s Qsuites, which may be the best business class in the world.” Fair enough, but what does that have to do with me? The message delivered by and for opportunists is “apply now, earn now, figure out what to do with the miles later.”

The second bucket is tactical travel hacking, which is roughly what I did for our stay at the Grand Wailea: I had a plan for the Aspire signup bonus, a plan for the resort credit, and a plan for the Amex Offer for $70 off $350 in spend at Waldorf Astoria resorts, and as soon as I’d used them all, the card was closed.

Just like opportunism, tactical travel hacking has tradeoffs. By focusing on individual awards, you’re more likely to earn the miles and points you actually want to spend, reducing the chances of orphaned miles in random accounts. On the other hand, if you’re concentrated on a specific award, you’re subject to award availability for that precise award space. This comes up most frequently when looking for premium-cabin airline award space, but limited hotel award space is an increasing problem, especially at premium properties that play games with blackout dates, variable pricing, and of course what qualifies as a “standard” room; while writing up this post I couldn’t find a single date with standard award nights available at the Grand Wailea!

Lately I’ve been thinking a lot more about what I think of as logistical travel hacking. Rather than focusing on the highest signup bonuses (which I may never redeem, or redeem at a fraction of their supposed value), or individual high-value trips which may or may not have award availability when I need it, I’ve been focusing on rewards that I am highly confident I’m going to be able to redeem, even if I don’t know when or where.

This has resulted in a subtle transformation in how I go about earning and redeeming miles and points. For example, I’ve written extensively about how companion tickets like those offered by the American Express Delta credit cards and the Bank of America Alaska Airlines credit cards didn’t offer significant savings when compared to manufacturing spend on higher-earning credit cards. And I still think that’s true, as far as it goes. But the higher your confidence that you’ll be able to redeem your companion tickets at something close to face value, the smaller that trade-off becomes.

Take, for example, the Alaska Airlines companion fare. For roughly $121, plus a $75 annual fee, you can book a second passenger on any Alaska-operated economy ticket, including destinations in Mexico, Alaska, and Hawaii, and including some pretty zany routing rules. The same $196 spent on, for example, office supply store prepaid debit card activation and liquidation fees might earn 100,000 Ultimate Rewards points on a Chase Ink Preferred card, worth $1,250 or $1,500 in airfare, depending on your local opportunities and the frequency of in-store and online in any given year.

From an opportunistic perspective, the companion fare makes no sense, since it would be trivial to get more than $196 in value from 100,000 Ultimate Rewards points. From a tactical perspective, you can imagine signing up for the card when you have a specific, expensive Alaska-operated ticket in mind. But the logistical perspective is different: if you always buy Alaska-operated tickets with your companion fare, then you have the opportunity to optimize the rest of your earning and redemptions around the remainder of your travel needs.

Conclusion

I’ve always said, the point of travel hacking is to spend as little as possible on the trips you want to take, and the least valuable point is the one you don’t redeem. That’s still true, but a few years of travel restrictions have managed to convince me that it’s at least partially incomplete. From the opportunistic perspective, if availability suddenly opens up on a premium carrier or at a prestige property, you need to have the points available to redeem immediately. From the tactical perspective, you grind out the points, miles, and status you need to book the trip you want. But from the logistical perspective, you might choose to cover predictable, recurring expenses with tools like annual free night certificates and companion fares even if you might have short-term opportunities to spend less for the same night or flight. As the joke goes, the Pentagon overpays for toilets but they get a great deal on F-35’s.

Like a lot of people getting started in travel hacking, I first dabbled in opportunistic strategies but found I just didn’t care that much about stockpiling points it would take me years to eventually redeem, at uncertain value. Over the course of a few years, I shifted over to tactically earning bonused points in the currencies I was planning to redeem for specific trips: Chase Ultimate Rewards, Hilton Honors, and US Bank Flexpoints, in particular. And in the last few years I’ve increasingly been focused on logistics: if I know I’m going to book a ticket for two on Alaska Airlines or Delta, or stay at a Hyatt or Hilton, then what those companion tickets and free night certificates do is take those redemptions off my mind, letting me focus on the rest of the pieces of a trip, like deciding when to book through Hotels.com and when to book directly.

Don't sleep on Hilton's (extremely) variable award pricing

For some time now Hilton has employed variable award pricing to maintain a rough value of 0.5 cents per Honors point. That isn’t set in stone, and it’s not uncommon to see values as low as 0.4 or as high as 0.6 cents per point, but it’s clearly the benchmark redemption value they aim for across the entire Hilton portfolio. Outsized value of course is available when prices are unusually high and when booking stays in multiples of 5 nights, since the 5th night is free for all Hilton elites (when means just about everybody).

As my tone suggests, variable award pricing is usually treated as a defect in the program, but it has a silver lining: award prices also vary downward, as I found to my advantage during my recent stay at the Hampton by Hilton Glasgow Central.

I was redeeming US Bank Flexpoints at 1.5 cents each for the first night of my stay, and a topped-up Hotels.com award for the second night, which left me with two nights I planned to book using points. Here’s my booking history:

• 7/8/22: booked night 3 for 35,000 points

• 7/11/22: canceled night 3, rebooked for 33,000 points

• 7/13/22: canceled night 3, rebooked for 32,000 points

• 7/21/22: canceled night 3, rebooked for 31,000 points

• 7/22/22: booked night 4 for 34,000 points

• 8/6/22: rebooked night 4 for 32,000 points

That final reservation was just 2 days before night 4 — I had already checked into the hotel, but was still able to rebook that night and was instantly refunded 2,000 points! In total, these shenanigans saved me a total of 6,000 points, which you might reasonably consider to be kind of insignificant in the grand scheme of things. On the other hand, saving those points was a matter of clicking a few buttons on my phone, something we do for far less reward all the time!

Further considerations

In the list above I attempted to draw a subtle distinction: for night 3 of my stay, I was canceling and rebooking my stay, while for night 4, I rebooked my stay without canceling. This is because of a quirk in the Hilton reservation system: when editing an existing award stay, you must have enough points in your account to cover the full price of the updated reservation. When I was tinkering with night 3, I didn’t have the 31-33,000 points in my account, so I had to cancel the existing reservation before using the refunded points to rebook that night.

By the time August 6 came around, enough additional points had posted to my account that I was able to edit my existing night 4 reservation without canceling it first. I simply selected the same dates, the same room type, and 2,000 points were immediately redeposited into my account. This was ideal since I had already checked into the hotel at that point and all four of my reservations had been linked. If I had canceled the 4th night, I would have had to check back in and have the keys remade. A minor inconvenience, but one I was happy to avoid.

That brings me to a final consideration: if you’re not taking advantage of the 5th-night-free benefit, you may find it best to book each night of a 2-4 night stay separately, for the simple reason that when one night goes down in price, another might go up. If one night falls by 1,000 points, there’s no opportunity to rebook if the price of another rises by 1,000 points or more: separate reservations make it easier to capture intrastay price shifts.

Hotels.com exemplifies the importance of redeemable intervals

Affiliate bloggers (and Secretaries of Transportation) love assigning a dollar value to miles and points, which makes it easy for them to compare the value of signup bonuses across currencies and manipulate their valuations when a particularly large referral bonus comes along.

There are naturally people for whom this approach makes sense, like mileage brokers who sell award tickets and hotel stays to folks who don’t know or care where they come from: selling a hotel stay that might cost $10,000 in cash for $5,000 can be a good deal for all involved if you only paid $1,000 for the points.

But this approach has never made any sense to me, since miles and points aren’t fungible. I can’t opportunistically earn 20,000 American miles, 20,000 Delta miles, and 20,000 Spirit miles and redeem them for a 60,000-mile United flight. If the United flight is the one I need to take, my other three currencies aren’t worth 2 cents each, or even one cent each: they’re worthless.

This is one reason I work to keep many of my balances as low as possible. I only have 797 Mileage Plus miles in my United account, and have no intention of earning more any time soon (despite having flown United last month and flying them again next week!). If any potential use does come up, I can transfer the precise number of United miles I need from Ultimate Rewards, and then draw my balance back down into the 3 digits, just where I want it to be.

There’s no better way to illustrate this than with the example of Hotels.com.

Stamps, rewards, and the importance of thinking in tens

To refresh readers’ memory, Hotels.com has an extremely simple rewards program: when you book a night through them, you receive a “reward stamp.” Collect 10 stamps, and you receive a “reward night.” You can then redeem reward nights at virtually all the properties on their platform for the average nightly rate you paid for your 10 reward stamps.

Importantly, however, if the stay you’re trying to book costs more than the value of your reward nights, you can simply pay the difference in cash to “top up” the value of the night. This makes the risk of breakage single-tailed: you can lose some of the value when booking a room cheaper than the value of your reward night, but you’re not penalized for booking a room that’s more expensive (although you won’t earn a stamp on those “top-up” nights).

There are therefore two ways of thinking about the value proposition of the Hotels.com rewards program:

• it offers a 10% rebate on each paid night you book through the platform;

• after the 10th night you book through the platform, you receive a voucher worth up to the average value of your last 10 nights.

Regardless of the approach, the value of the voucher doesn’t change. What changes is the value assigned to each night you book through Hotels.com. If you take the first approach, then when you book through Hotels.com you can mentally multiply the cost of your stay by 90% to reflect the 10% rebate the program offers. If you take the second approach, the first 9 nights you book through Hotels.com generate no value whatsoever — only the 10th night you stay generates any value at all.

I prefer the second approach, because focusing on redemption thresholds makes it easier to compare the relative value earned by booking through different channels, as a recent experience illustrates.

Last month we visited the Midwest for a week to see some friends and family, and the best price I found was, as usual, at a centrally located Hyatt Place downtown. The lowest rate I could find was $136.85 per night, plus tax, which is irrelevant regardless of the booking channel.

Where the booking channel comes in is that $958 spent on a paid Hyatt rate would earn me 4,790 base World of Hyatt points, and 958 bonus points as an Explorist member, for a total of 5,748 points.

Now look at this through the same two lenses as above. On the one hand, since I redeem World of Hyatt points I’ve transferred from Ultimate Rewards fairly regularly, the points I’d earn on this stay could be valued at a minimum of $71.85 — the value of the same Ultimate Rewards points when redeemed for paid airfare.

Through the second, redemption-focused perspective, 5,748 World of Hyatt points are essentially worthless, since 5,000 points is just barely enough to book a Category 1 property, and only during off-peak and standard pricing periods! That story would be completely different if I had an upcoming high-value Hyatt stay and insufficient points to book it. In fact, I have plenty of Hyatt points and free night certificates, so the additional points would simply sit in my account growing stale.

That may well have still been my best option. After all, 7 Hotels.com reward stamps are just as worthless as 5,000 World of Hyatt points. What changed the calculus is that I already had 4 Hotels.com reward stamps in my account that had been rolled over all the way from 2019! That meant “crediting” my Hyatt Place stay to Hotels.com would put me over the redemption threshold and earn me a reward night, in my case worth $141.88, which I promptly redeemed with a small top-up for a night on our upcoming trip to the UK.

Sharp-eyed readers will have noticed one small but potentially critical error I committed: I was sitting on 4 existing reward stamps and then credited another 7 nights to Hotels.com — leaving me with a worthless “leftover” reward stamp! It may have been strictly superior to credit 6 nights to Hotels.com (securing my reward night) and the cheapest of the 7 nights to World of Hyatt (to save future Ultimate Rewards points). I say “may” have been because I didn’t bother checking the rates for individual nights, and it may have turned out the one-night rate was substantially higher than the longer-term stay rate I ultimately booked, erasing the value of the additional World of Hyatt points.

Two additional considerations: cashback portals and the Hotels.com credit card

Just as I set aside taxes and fees above, since as far as I know they are not included in the earning calculation with any loyalty program, I also skipped over cashback portals, which typically offer 1-4% cashback on hotel bookings (including Hotels.com bookings), although with periodic outsized offers, like the current 9% cashback rate at IHG properties offered by TopCashBack. Since those offers are for cashback, and have relatively low cashout requirements, you should always check where your total rewards (loyalty program + cashback + credit card earnings) offer you the most redeemable value.

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Finally, it’s worth mentioning the no-annual-fee Hotels.com credit card. The card has a paltry signup bonus (three $125 reward nights after spending $5,000, which can’t be stacked but can be topped up), but the earning structure does offer one interesting opportunity: for every $500 spent on the card, you receive one Hotels.com reward stamp. As mentioned above, each reward stamp has an assigned value which is averaged into the value of your reward night. Hotels.com assigns these credit card reward stamps the value of $110, so if you put exactly $5,000 on the card (for example, to meet the signup bonus), you’d end up with a fourth reward night worth exactly $110.

If you squint at it just right, that means someone trying to sell you this card could in principle convince you the card has a $485 signup bonus and earns 2.2% on ongoing spend (a $110 reward night for every $5000 in purchases). But that’s not the interesting opportunity offered by the card. Instead, since you earn a $110 reward stamp every time you spend $500 on the card, it’s ideal for topping up your reward stamp balance when your existing stamps have a relatively high average value (and you don’t have upcoming Hotels.com stays booked).

To give a simple example, if you have 9 reward stamps with an average value of $250 each, manufacturing $500 in spend on the Hotels.com credit card doesn’t yield $11 in rewards (2.2%). Instead, it yields a reward night worth $236 ($2250 plus $110 divided by 10).

I wouldn’t say this “supercharges” the Hotels.com rewards program. What it does do is reduce the downside risk of orphaned reward stamps, so at the margin makes it more appealing to book hotels based on price through Hotels.com, knowing that every time you accumulate 6 or 7 reward stamps through stays you can easily calculate the final value of the resulting reward night you manufacture with the credit card.

And if, like me, you have no interest in active participation in loyalty programs like Marriott or IHG, but notice that their properties are occasionally attractive in terms of price, location, or amenities, especially outside of big cities, it may be worth taking a look.

Conclusion

I tailored this post to Hotels.com rewards but hopefully I’ve made clear the point is universal, and not just for people who keep their balances as low as possible like me. If you’re saving up points for a week-long stay at the Conrad Maldives Rangali Island you might well need 600,000 points and a free night certificate, for example. But you don’t need 610,000 points and a free night certificate — only the points you redeem have value, the 10,000 leftover points are just gonna sit there, getting stale.

Hilarious, humiliating admission by Bilt Rewards

I woke up this morning and, compulsively reaching for my phone, saw a tweet so embarrassing I had to read it 3 times to make sure I understood it correctly. Twitter user @playalaguna asked Richard Kerr, the Senior Director of Travel at Bilt Rewards, a perfectly sensible question: “Why is BILT rounding dollar amounts down on points, $2.99 crediting as $2. Most cards round up, at least when it is $.50 and above...”

Now, you may find this user’s tone a bit more aggressive than absolutely necessary, and you may find quibbling over a maximum of 3 Bilt Rewards points (since the co-branded credit card earns 3 points per dollar spent on dining) to be a bit extreme, but the quibble is a perfectly reasonable one, especially since as playalaguna mentions, virtually all rewards credit cards solve the problem by “erring” on the customer’s side.

Now consider the possible responses you could make as a high-profile figure in the travel hacking community and brand ambassador for your company. A few obvious options:

• Neutral: “Thanks for bringing this to our attention! We’ll reach out to our credit card partner and make sure points are awarded correctly going forward.”

• Apologetic: “Sorry about that! A lot goes into launching a brand new rewards program and credit card partnership, and we overlooked that. That’s why your feedback is so important to us.”

• Legal/Technical: “For privacy reasons our current relationship with Wells Fargo only allows us to see whole dollar amounts for transactions so we are only able to award points in whole dollar increments. We’re working to change that and we hope you’ll be patient as we resolve this issue.”

What did Richard Kerr say? “Economics for a startup worked on whole dollar spent. Now that we’re a year in, we’re looking at making all these rules and idiosyncrasies as rewarding as possible. Send me a DM and I’m happy to award you the point.”

This is an astonishing admission. Kerr is saying that not only was this “rounding down” a known issue, it was not a bug, but a feature of the program! Bilt Rewards deliberately short-changed its credit card users in order to award them as few points as possible, in order to keep people from reaching redemption thresholds as long as possible, in order to spend as little money as possible, in order to stretch their startup funding as long as possible.

To call this “customer-unfriendly” would be a gross understatement. It’s downright customer-hostile: the customer is the enemy at the gates, trying to get as much value as possible from our program, and our corresponding duty is to give them as little value as possible.

But more than that, it flies in the face of everything we know about how loyalty programs succeed. Rewards programs attract customers when they offer frequent positive reinforcement, even when the actual value of the rewards is negligible. A few weeks back I received my REI “dividend,” a coupon that can only be redeemed at REI, so I’m going to buy my new bike helmet at REI instead of on Amazon or at a local bike shop. A $15 quick endorphin hit is going to net REI a $45 sale, plus whatever else I pick up while I’m in the store.

Bilt took the opposite tack: overpromise, then underdeliver, or even better from their perspective, don’t deliver at all.

Quick hits: what's on my mind in June 2022

It’s been a pretty slow month in the travel hacking world, and nothing’s jumped out at me so far in terms of killer deals that needed to be passed along immediately, but I’ve been taking notes about a range of opportunities and situations that I thought it would be useful to dump into a single reference post for folks who may have missed them.

Summer hotel promotions

I try to keep my Hotel Promotions page mostly up-to-date, but even if I miss a promotion, it’s always essential if you’re staying at a chain hotel to do a little light Googling to make sure you’re registered for any promotions you’re eligible for. All the chains but Marriott are currently offering universal promotions, so be sure to register for them before you stay.

Hotels.com for non-chain and secondary chains

I recently made two reservations through Hotels.com, one for a 7-night Hyatt stay, and another for a 3-night stay at an independent hotel in England.

There are two important things to keep in mind about Hotels.com. First, stays do not earn elite night or stay credit with Hyatt. Second, they earn rewards through two separate mechanisms: through the portal you click through to Hotels.com, and through Hotels.com “stamps” and “reward nights.”

For non-chain hotels this is usually a no-brainer: a portal rebate (currently 4% cash back through TopCashBack) and a 10% rebate through Hotels.com each time you earn 10 stamps and a “reward night” equal to the weighted average of your Hotels.com rates.

For chain hotels the calculation is somewhat more complicated, since you need to take into account the value of any points and elite status you might earn, especially during particularly lucrative promotions or when chasing particularly valuable elite status.

Hilton 5th Night Free math

Hilton Honors points are almost mechanically worth between 0.4 and 0.5 cents each, although with the caveat of massive upside value at particularly expensive properties, and when using them for 5-night-free redemptions on particularly expensive nights.

There are two important things to keep in mind. Just as Hyatt conceals the total price of an award reservation unless you have sufficient points in your account, Hilton will not reveal the total price of a 5th-night-free reservation unless you have enough points to book the first 4 nights. Instead, Hilton will only show you the price of the first night of the reservation.

This raises the obvious question: is the 5th night “free” in the sense that the average price per night is reduced by 20%, or is the precise 5th night of the reservation free? The answer is that the 5th night is free, which means during periods of dynamic pricing, it’s ideal to time the 5th night of your stay to be the one charging the most points, in order to maximize the value of the benefit.

How to buy Hilton points: Points.com or Hilton reservation?

I needed about 9,000 Hilton Honors points to lock in one of our hotels in London, so my natural first instinct was to click through the TopCashBack portal to Points.com to check out how much those 9,000 points would cost me. The answer: $50, which minus the 2.5% cashback comes to $48.75.

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I then checked out the price of simply “topping up” my existing Hilton balance during the reservation process, and was quoted 34.65 GBP, or just $42.52 USD.

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In other words, it’s cheaper to top up a Hilton reservation through Hilton than through Points.com — even during a promotion, and even when clicking through a cashback portal. It’s a story as boring as it is true: if you don’t shop around, you won’t get the best price.

American Express Hilton Honors Surpass lounge access

This is a bit of a silly one since most obsessive travel hackers have at least one ultra-premium credit card that offers unlimited Priority Pass lounge access, but since I’ve returned to traveling in 2021 and 2022, I’ve really enjoyed the 10 free Priority Pass lounge visits provided by the American Express Hilton Honors Surpass card. The overwhelming majority of our trips are non-stop, but the occasional long layover or delay in Seattle and New Orleans in 2022 has been a terrific and genuinely valuable benefit at times when air travel can be stressful and overwhelming.

Bilt Rewards

Finally, earlier this year a slew of bloggers started promoting Bilt Rewards when they offered 500 supposedly-transferable points when you linked your World of Hyatt account to your Bilt account. I, like a lot of suckers, linked up all my loyalty accounts, and ended up with just 1,400 Bilt points, 600 points short of the amount they require to actually transfer your points to loyalty programs (it would have been 1,500 but I’ve never been able to successfully create a Turkish Miles&Smiles account, for whatever reason).

I’m not here to say whether Bilt is an “ethical” or “unethical,” “profitable” or “unprofitable” company. I’m only here to say that while it exists, you have to hammer it as hard as possible, and one piece of that is only linking your loyalty accounts during promotions. When Hyatt is offering 500 points, link away. When they offer 100 points per account, you will never earn enough points to get any value from the Bilt program; make them come to you.

Double booking into the same Delta award space

So-called “fare buckets” are a curious feature of the airline ecosystem. For the overwhelming majority of flyers, even frequent travelers, the wide-ranging alphabet of letters, usually shown in parentheses after the class of carriage, is simply irrelevant: most people book on some combination of convenience and price, or have little or no choice if they’re required to fly on tickets booked by their corporate travel office.

So fare buckets don’t matter at all — until they’re the only thing that matters. For example, American Express Delta Platinum companion tickets can only be used to book into the L, U, T, X, and V fare classes. If those fare classes aren’t available for the flight you want, you simply cannot use the companion ticket on that flight.

The other important use of fare buckets is for finding award space on foreign carriers, especially ones that won’t show you availability unless you have sufficient miles in your account. Expert Flyer has a paid service that allows you to see the inventory available in each fare bucket for hundreds of airlines.

It’s important to note that there’s nothing magical about fare buckets. There’s not a “fixed” inventory in each fare bucket that never changes. While I assume most if not all airlines assign inventory to fare buckets algorithmically, the algorithms were still written by humans. An algorithm might say, “if there are 6 or more seats available in First Class, make one available for awards.” If that award seat is then booked, the algorithm might run again and make another single award seat available. One of the Japanese airlines is famous for doing exactly this.

Double booking the last available seat on Delta

As I wrote last month, although I’d finally booked my outbound tickets to England with SkyMiles, the price in Mileage Plus miles had ticked back down to 30,000, and I hoped to cancel the Delta award ticket and rebook using worthless-to-me United miles.

Having successfully completed that switcheroo, and with my Delta award ticket instantly refunded, I turned to booking flights to Wisconsin for a June wedding. There’s a single nonstop flight per day, and I found a ticket available for 26,000 SkyMiles. Almost like the good old days! But when I confirmed the dates with my partner and started booking seats for two, the price had jumped to 28,000 SkyMiles each! A 4,000-mile penalty just for waiting a day to book?

You probably see where this is going: the lower-priced ticket was still available, but there was just one seat available in that fare bucket. When I searched for two tickets on a single search, I was shown the lowest fare bucket with two seats in it.

What to do? Well, as Derek Trotter would say, “he who dares, wins!” So I had my partner fire up her laptop and log into her own Delta account. With both of us searching for a single seat, we both saw the 26,000-mile award available.

We each selected a seat, plugged in our payment information, and gave it a dramatic countdown: 3, 2, 1, click!

And we both got the last 26,000-mile seat.

This is obviously, in one sense, an almost trivial anecdote. We both had 28,000 SkyMiles in our accounts so if either of our purchases had errored out with “this fare is no longer available” whoever lost would have restarted the search and forked over the extra 2,000 SkyMiles.

But upon a moment’s reflection, the opportunities begin to come into view.

First, there are lots of tickets that cost more than 26,000 SkyMiles! For example, a one-way flight to Maui from Los Angeles in First Class costs 66,000 SkyMiles on December 3, 9, and 10. But on December 9, only one seat is available for 66,000 SkyMiles — try to book two, and the price jumps to 85,000 SkyMiles each. More realistically for a travel hacker, that means 66,000 SkyMiles for the first and 85,000 SkyMiles for the second, still a difference of 19,000 SkyMiles.

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Second, lots of people travel in groups of more than two passengers. If scalable, for groups of 3 or more the savings start to look astronomical. A family of four might save 57,000 SkyMiles flying in First Class to Hawaii; almost the cost of the first ticket!

I think this is a pretty neat trick, but to bring down the temperature let me state the obvious caveats.

First, to simultaneously book awards you need multiple accounts with sufficient miles in each. For a lot of people in “two-player” mode that’s not a big deal, but if you’re trying to book your kids or parents who don’t play the game, you will quickly struggle to find enough miles in enough separate accounts. If you have friends or colleagues in the travel hacking community that’s a good option, although it will likely involve at least some Zooming and screen-sharing to make sure all the booking details are right for each passenger, plus getting the timing exactly right.

Second, I don’t know how scalable this is: maybe it works for two passengers but not three, maybe for three but not four. Presumably at some point when the cabin is actually full Delta will reject issuing the ticket, so it’s essential to select your seats (different seats!) during the checkout process to make sure there’s room in the cabin for everyone.

Finally, I have no idea if this works on partner or international awards. I was booking nonstop, Delta-operated domestic flights. Would connections break it? Would partner award availability break it? I simply don’t know.

Conclusion

Like everything in the travel hacking game, your mileage will vary. If anything comes from this post, let it be the recommendation to search for individual seats before you search for seats for your whole family, since whether or not this trick works for you, securing one or two low-level seats before paying more for more expensive seats is an easy way of saving miles anyone can enjoy.

While this trick almost won’t certainly work for everyone, on every flight, in every class of service, I wanted to pass it along because it worked for me.