Hotel cashback portal participation (it's complicated)

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I've recently had occasion to take a look at a few options for booking paid hotel reservations, and have come across a peculiar situation on several cashback portals. Today I want to share a few observations and offer some suggestions.

Booking portals penalize rewards-earning stays

I came across this issue because the Citi Dividend card (no longer available to new applicants) is offering 5% cashback (up to $300 cashback per calendar year) on airline reservations and Hilton stays during the third quarter of 2017. While I personally reached my cashback maximum in the second quarter (at drug stores) I thought some readers who don't manufacture spend might still be able to earn cashback during the third quarter on paid Hilton stays. After all, even if you have a Hilton Surpass card earning 12 points per dollar spent at Hilton properties, you'd have to consistently value Hilton points above 0.42 cents each to prefer the Hilton points.

With that in mind, I decided to take a look at some booking portals you could use to make your Hilton reservations, and discovered that the two portals offering the highest payouts included similar restrictions. In the case of BeFrugal, the payout is:

  • 7% Cash Back on Non-HHonors Rate Completed Stay
  • 6% Cash Back on HHonors Blue Rate Completed Stay
  • 2% Cash Back on HHonors Silver Rate Completed Stay
  • 1% Cash Back on HHonors Gold Or Diamond Rate Completed Stay

And in the cash of TopCashback:

  • 7% Confirmed Booking for Non HHonors Members and Blue Tier HHonors Members
  • 2% Confirmed Booking for Silver Tier HHonors Members
  • 1% Confirmed Booking for Gold and Diamond Tier HHonors Members

In other words, Hilton doesn't want to pay out big cashback rebates to customers to whom it's also paying out big Hilton Honors points rebates.

The reason this is necessary is because once you've clicked through the cashback portal, you land directly on the hotel's website, which means your stay is eligible for hotel rewards as well.

Knowing that some online travel agencies allow you to pay for hotel stays in person on arrival, my first thought was to work around this problem by using an online travel agency with its own rewards program. But the same problem pops up there!

BeFrugal offers to pay out on Hotels.com bookings at the following rates:

  • 9% Cash Back on Completed Hotel Stay - Not A Hotels.com Rewards Rate Customer
  • 3% Cash Back on Completed Hotel Stay - Hotels.com Rewards Rate Customer

In other words, you can earn 9% cash back without earning Hotels.com Rewards nights, or 3% cash back if you choose to earn Hotels.com Rewards nights.

TopCashback offers:

  • 9% Completed Stay without earning Hotels.com Rewards
  • 5% Completed Stay with earning Hotels.com Rewards

Since Hotels.com Rewards nights are worth "about" a 10% rebate, you're better off earning both cashback and Hotels.com rewards nights, if and only if you're sure you'll reach 10 Hotels.com Rewards nights and thus be eligible for a redemption.

Possible workarounds

In the case of online travel agencies, you can stack rewards by choosing the highest cashback portal payout that still earns the OTA's own rewards currency, choosing a rate that's paid in-person, and then paying with a credit card that offers the highest earning rate, like the Citi Dividend in the example I mentioned above. In the case of Hotels.com this might add up to a total rebate of something like 20%: 5% through TopCashback, 10% through Hotels.com, and 5% through the Citi Dividend.

If you want to take advantage of your status with a hotel chain, for example receiving room upgrades or breakfast, as well as earning points or elite-qualifying nights, you'll want to book through the cashback portal that offers the highest payouts on elite-qualifying stays. For example, the Upromise portal offers 5% cashback on Hilton stays and doesn't include restrictions on participation in Hilton Honors.

Finally, if you want to earn the highest payouts, don't need elite status benefits, and are willing to take a chance, you could try booking a paid stay through the highest-paying portal (BeFrugal or TopCashback in the case of Hilton) without logging into your hotel rewards account, and after your stay has completed and your cashback has posted request retroactive points from the hotel chain. Of course that means being unable to take advantage of rates exclusively available to Hilton Honors members.