There is rarely a good reason to buy points unless you are seeking to top up an account for an immediate high-value redemption, or the offer is absolutely compelling. I recently purchased a small quantity of Flying Blue points to top up my account to redeem points in business class flights on Air France from Toronto to Paris, and from Amsterdam to Bangkok on KLM. I thought the rationale was compelling enough because Flying Blue was offering a 100% bonus on purchased points, and both routes were discounted 22-25% off the lowest saver rates.
Without bonuses, I would never buy points because they retail significantly higher than what they are worth in redemptions. Buying points for speculative bookings is generally a bad idea given the potential for the program to devalue your points without much notice, or sometimes with no notice at all, as when Avianca’s LifeMiles program raised the cost of North America-Asia redemptions in most cases from 75,000 to 90,000 points without warning earlier this fall.
Cash Versus Points Outlay for a High-End Property
One case for buying points is to make a high-value redemption for stays at aspirational hotel properties. The Maldives has long been on my bucket list and I was eyeing an overwater villa at the InterContinental Maamunagau, which for my dates currently retails at USD 729 per night plus taxes and fees. And this is just the nonrefundable rate. The privilege of refunding my booking 3 days before check in would be $873++. With taxes and fees at the refundable rate, I would be looking at paying $5,600 – YIKES!
I could stay elsewhere of course, but I get unique perks holding IHG One Reward Diamond status along with Ambassador status at InterContinental properties. Hmm, what to do?
I looked at booking with points, which would cost me 120,000 points per night or 600,000 points for the entire stay with no cash outlay. I checked my balance and it had 109,000 points, not enough to cover a night’s stay.
Doing the Math on a Points Purchase
Fortuitously, IHG is running a current sale on purchased points with a 100% bonus on points purchased up to December 29. Ordinarily, IHG caps the number of points you can purchase pre-bonus at 150,000, but for this current promo, the cap has been lifted to 250,000. I have not purchased IHG points this year (or ever), so I went all in for 250,000 at USD 0.01 per point. With a bonus of 250,000 points, I ended up purchasing 500,000 points for $2,500, bringing my balance to 609,000, sufficient to make my booking.
Best of all, the booking is refundable up to 3 days before check-in, giving me the flexibility I need. My total savings is $3,100 or 55% off the refundable rate!
The Bottom Line
Buying points rarely makes sense unless you can get them at a low enough cost to immediately lock in a high-value redemption. Look for bonus offers from hotels and airlines and do the math to compare the points versus cash outlay on the redemption you want to make. Sometimes the discounts on a redemption funded by purchased points can be astounding.
