Airline, Hotel Programs Begin Limiting Non-Travel Redemption Options

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Three loyalty programs have now suspended the ability to redeem their currencies for most non-travel-related points redemptions. Delta, Southwest, and Best Western have temporarily halted these types of offerings for the foreseeable future due to circumstances resulting from COVID-19.

Redemptions like these are usually some of the worst values for your points/miles. However, they are convenient for anyone wanting to cash out—especially during a time of need. Unfortunately, we can expect that other loyalty programs will follow suit with similar restrictions in the coming days/weeks.

Delta SkyMiles

The first airline to cut certain non-travel mileage redemptions was Delta. In addition to being able to redeem SkyMiles for flights, Delta's SkyMiles Marketplace has offered SkyMiles members the chance to redeem miles for merchandise, hotel stays, car rentals, cruises, and gift cards.

However, some restrictions have recently been put in place. Currently, only Medallion Members and Delta SkyMiles American Express cardmembers are able to redeem miles through the SkyMiles Marketplace. Also, the option to redeem SkyMiles for gift cards has been removed. Per a SkyMiles Marketplace representative, this restriction was put in place on March 16. Qualifying members can still redeem miles for merchandise, Apple products, hotel, car rentals, and cruises.

Southwest Rapid Rewards

Southwest has one of the simplest reward programs out there when it comes to redeeming for flights. But Southwest also lets members redeem their Rapid Rewards miles for merchandise, gift cards, hotel stays, and more through their ‘More Rewards' program.

Well, at least they used to. Southwest has now halted all redemptions except reward flights for many Southwest Rapid Rewards members. Members trying to access the More Rewards page will be shown the following notice:

Error message on Southwest Rapid Rewards More Rewards page about the temporary suspension of redemptions.

However, not all members are getting this error. If you have a Southwest co-branded credit card—such as the Southwest Rapid Rewards® Priority Credit Card, Southwest Rapid Rewards® Premier Credit Card, or the Southwest Rapid Rewards® Plus Credit Card—you can still redeem Rapid Rewards points for non-travel redemptions. The banner at the top of the More Rewards page now specifically shows “for Rapid Rewards Credit Cardmembers”:

Screenshot of Southwest Rapid Rewards More Rewards with a banner referencing Southwest credit cardmembers.

Best Western Rewards

Screenshot showing Best Western redemption mall with a notice at the top about the suspension of gift cards and merchandise.

Best Western Rewards also offers a variety of redemption opportunities outside of standard award nights, including assorted merchandise and gift cards. However, Best Western has currently paused the ability to redeem your Best Western Rewards for gift cards and merchandise. You can still use points for:

  1. Free night redemptions
  2. Donations to an assortment of charities/scholarships
  3. Conversions to 14 different major frequent flyer programs
  4. The purchase of a 1-year AAA/CAA basic membership

Best Western does not offer a timeline for when they expect the ability to redeem for gift cards and merchandise to return.

Our Take

A lot of airlines and hotel companies are going through severe financial hardship right now due to COVID-19. With most people pausing their travel to practice social-distancing, the number of flight and hotel bookings has tanked, massively affecting revenue for these travel providers.

It's possible that—due to cash flow issues—some airlines and hotel loyalty programs simply can't afford to buy the gift cards or merchandise to complete these redemptions right now. Either that or airlines and hotels want to dissuade people from cashing out all their points and miles during the travel standstill.

In any case, Delta, Southwest, and Best Western will probably not be the last travel companies to do this. It's likely that other programs are also looking for ways to tighten their finances, and some may follow this lead. We don't usually recommend that members cash out points and miles through these kinds of low-value redemptions. However, if you're considering cashing out points or miles this way with any other loyalty program, it'd probably be a good idea to do it sooner rather than later.

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Comments

  • I’m ok with these moves. I understand their situation. Their priority is to keep afloat until people start to travel again.

  • Yes the situation is very dynamic – it pays to carefully monitor what is going on, since it can change very rapidly. In my country (Australia) there are concerns about the viability of Virgin Australia, and there has been a mad rush to gift card redemptions. They also stopped the ability to transfer points from Virgin Velocity to Singapore Krisflyer. All those efforts to collect points, might have been in vain.

    The age old rule with frequent flyer points – the best ones are the ones that you have already used.

  • marianall says:

    American sent me an email offering me the extension of the miles expiration date until July. good for them

    • Any ideas if Alaska Airlines Mileage plan might do the same? I have some expiring in 1 month but can’t really do much with them. Thanks

  • This is not a problem for me.
    I’ve never used this kind on redemption which usually offers very low value to points and miles.

  • It would be nice if American dropped expiration dates on their miles like some of the other airlines, or at least offer an extension of expiration dates due to the pandemic.

  • I wonder how many redemptions these programs actually receive for gift cards. Given that the value isn’t much when converting miles/points to GC, I wouldn’t think that redemptions are very high. Perhaps, some believe that a bird in the hand is worth more than points that they feel they may not be able to use if the issuer goes bankrupt.

  • I wonder if when the whole COVID-19 crisis clears up if there might actually be some reduced mileage awards offered by the carrier to at least fill the seats and get people flying again. Award program balances basically represent a liability to the airlines on the balance sheets. Maybe some will consider allowing award tickets — even if at reduced redemption rates — if it means that the planes won’t go with so many empty seats. Just my $.02

  • Hope this doesn’t last long. Wonder how many others will do the same

  • Makes sense as these would be cash outflows from the airlines or hotel programs to buy obtain the gift card for you in exchange for your miles/points. While it reduces their liability on their books for those points they need to preserve cash, hence suspending these redemptions.

    I would look for all of them to be selling miles (perhaps with all time high bonuses) soon. It is like funny money – they can print as much as they need to and worry about fulfilling those later. Of course, they will then increase all rewards costs later…..

  • That’s fine. I only use miles for flights and hotel points for hotel bookings. I just hope that they don’t massively devalue their award charts in the future.

    • Airlines are diluting their redemption values all the time. Now even earning miles is getting tougher unless one has a fat travel expense account. However, redeeming airline miles for non-travel needs is much worse. No way I will be able to get anything decent for the miles I accumulated over a long long time.

  • Using miles for non-travel redemptions usually represent sub-optimal value so i’m not sure if this restriction is really a hit to users. Maybe for someone in hardship or wanting to “cash out”, this may be an issue. My bigger concern is that after we get out of this crisis, airlines (and maybe credit cards programs) may devalue the points even more (they just need a reason i suppose and here they would have one).

  • The only silver lining is that non-travel redemptions aren’t a good value anyway.

  • I’m not opposed to this. Companies need to stop burning cash to maintain as much cash flow as possible.

    Just like those who lost their jobs and need to stop spending money.. Fair move to me.

  • I would think that maybe the company who does the giftcards, etc. doesn’t have the funding to keep going? otherwise, I would think that using up miles would be good that way maybe people spend more on Amex and/or buy miles giving money to the airline?

    I wish that AA would just get rid of their expiration date of miles now. Would be nice. But maybe not because then you’re buying miles and giving them money?

  • I can see this trend worldwide. All of travel industry is hurting and they will minimize expenses the best they can. Pausing or weakening loyalty programs is to be expected, hopefully just temporarily.

    • I do not think airlines will be that indiscriminate to cut the benefits because they actually want to get the passengers back.

  • I’m really curious if many people actually redeem points and miles for non-travel stuff that much so the card issuers need to restrict them.
    None of my friends seem to even consider this option.

    • It seems to me more likely a response to change in behavior due to the COVID-19 situation. Given the stay-at-home orders and massive lay-off’s, people are probably turning to their rewards programs to make up for lost income by cashing in on grocery store and Visa prepaid gift cards for necessities like grocery stores to make up for household financial losses.

  • I’m sure we will be seeing more “enhancements” to loyalty programs as things tighten up.

  • At this point, it’s more prudent to earn the miles and stock them up I guess.

  • Ironic… considering how Delta was trying to anchor expectations of 1 DL mile being worth 1 cent. Now perhaps not even that…

  • While it is understandable why the travel companies are doing this, those who are able to should allow the redemption to gift cards since there are clearly no redemption for travel at the moment. This makes the miles essentially worthless at the moment.

    • Actually you CAN redeem miles for way in the FUTURE travel. And the airlines are allowing changes to those plans without change fees through the end of the year, in case the pandemic drags on.

  • Bill from Maine says:

    As you mention, these redemptions aren’t the best use of points and I have never used my points or miles for this purpose. I personally can live with this change, especially since each of these currencies don’t expire.

  • ron_vaughn@hotmail.com says:

    Just a preview of coming attractions?

  • This is not at all surprising. I am going to hold on to my points to use them for travel after this is all over, but I understand why some people would want to do this. Especially if they are economically affected by this issue. Gift cards to Amazon, Walmart or Target would be very useful if I couldn’t work and hotel or airline miles would have no value.

    • Yes, the airlines are actually getting pressure on both ends here. Demand for these is probably up, and they don’t want to supply them right now. First, as AW says, they don’t want to spend the cash on these rewards right now as they burn so much cash daily on essentials. But, even more so, it’s got to be lots of people wanting to cash out… either because they need the gift cards economically… OR, more likely, because they think the airlines might go bankrupt, and they’re destined to completely lose all their points.

  • I’m sure they want to insure that folks WILL travel again when it is safe….and that’s in the best interest of most of us who love to travel.

  • Laura Eastman says:

    From what I can tell American is still allowing their points to expire even though many can’t fly. The flexibility of cash rewards is looking mighty nice right now…

  • Steven William Van Meter says:

    I’ve taken the time to look into this. 60,000 points is nothing to sneeze at. this is a very workable option. It is not always necessary to incur a large cash expenditure to realize good point acquisition. This is such a deal.