Think of frequent-flyer miles as a form of currency, with a value that fluctuates and also depends on how they’re spent.
Typically, using frequent-flyer miles for free flights is the best value. At Southwest, for example, 18,800 Rapid Rewards points will buy you a $100 gift card to various retailers and restaurants, but those same points are worth about $275 if applied to an airline ticket.
While many carriers put point/mile values on different flights, Southwest allows customers to buy any ticket on any flight with Rapid Rewards points, with the number of points required being determined by the cash price.
And that background brings us to the math behind Southwest’s cash-plus-points offer. Let’s compare the cash, points and cash-plus-points price for the same flight, a one-way May 31 flight from Charleston to Baltimore/Washington International, a flight I picked at random.
- Cash price: $208
- Points price: 13,695 Rapid Rewards points, plus $11.20 for taxes. So, those points are covering $197 of the total cash price.
- Cash-plus-points: 13,600 Rapid Rewards points will take $85 off the cash price, leaving $123 to be paid in cash.
So, for about the same number of Rapid Rewards points, a traveler could either pay for the entire ticket (plus tax) — a $197 value — or take $85 off the cash price.
With the all-points option, a Rapid Rewards point is worth 1.44 cents. With the cash-plus-points option, one point is worth less than half as much, just 0.63 cent.
So, that’s a bad use of points. But someone who rarely flies Southwest, who has few Rapid Rewards points and little prospect of earning more could find the option useful.
Say a person has 3,000 Rapid Rewards points. They might like to get $20 off their ticket by using those, because there’s not much else they could do with them.
Here’s how Southwest’s cash-plus-points works: While booking a ticket online or through the airline’s app at the cash price, the payment screen will show several cash-plus-points options.