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Update: The changes have now taken effect. Rapid Rewards members now need to redeem 86 points per $1 of ticket base fare.
If you haven't heard the bad news, Southwest has scheduled a devaluation of its Rapid Rewards points. Starting January 1, 2024, your balance of Southwest Rapid Rewards will be worth 4% less. This news came via email to Rapid Rewards members, and it's not a welcome change.
Here's what we know so far about Southwest's impending devaluation.
Southwest To Devalue Rapid Rewards by 4% In 2024
Despite being a revenue-based program, Rapid Rewards is devaluing for the second time in two years.
In November's Rapid Rewards statements sent to members, Southwest informed members that award flights will require about 4% more points starting on January 1, 2024. While any devaluation is disappointing, there is a silver lining. The airline will let loyalty members book award travel using the current fixed value of Rapid Rewards until the end of the year.
Revenue-based programs like Rapid Rewards price awards based on the cash price of tickets. If the ticket price goes up, so does the number of points you'll need to book it.
Southwest's pricing model is a bit more nuanced. The airline also fixes the value of Rapid Rewards within a range — typically between 1.3 and 1.6 cents per point.
A 4% devaluation means the new value of Rapid Rewards will fluctuate between 1.25 and 1.54 cents per point.
Related: Why Southwest Rapid Rewards is the Easiest Airline Loyalty Program
On its face, the move isn't huge, but it's not exactly a sign of great things to come. This is the second time Southwest has devalued its fixed-value currency in a short time. Hopefully, it's the last, but if we're being honest, it's hard to keep our hopes up.
Moreover, this is bad news for customers. Typically, you simply need more points because the cost of a ticket has gone up. Maybe the flight is nearly sold out; maybe the flight is on a busy holiday. But in this case, you'll simply need more points because they'll be worth less.
Related: Do Southwest Rapid Rewards Points Expire?
Bottom Line
Southwest has announced that it's planning to make its Rapid Rewards points worth 4% less in 2024. While unfortunate, the nearly two-month notice is something lots of us can appreciate.
If you've got a balance of Rapid Rewards points, you can redeem them at their current fixed value until December 31, 2023. Starting next year, you'll need to pony up a few more points to make an award redemption.
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