Posted by William Charles on November 29, 2016
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Published on November 29th, 2016 | by William Charles

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How Much Are Southwest Rapid Rewards Points Worth?

Southwest’s loyalty program is called Rapid Rewards, in this post we will look at what these points can be redeemed for and how much these points are worth. You can read other posts we have in this series below:

What Can The Points Be Redeemed For?

You can redeem points for any of the following:

  • Southwest flights: 1.39¢+ per point
  • Gift cards: Up to 1¢ per point
  • Merchandise:
  • Other travel: Up to 1¢ per point

Southwest Flights

Most people will be able to get the best value out of their Southwest points by redeeming them for Southwest flights. Unlike other airlines the cost of all flights with Southwest is tied to the cash rate of that flight. When you redeem your points for wanna get away fares, you’ll be charged 72 points per $1 (1.39¢ per point).

It’s important to remember that when you redeem points for flights you’re only charged for the base fare and not taxes (although you do have to pay the mandatory TSA fee of $5.6 for one ways and $11.20 for round trip flights). This means you’ll get better value out of Southwest flights where a larger portion of the cash rate are taxes/fees. Let’s take a look at some sample flights to give you a practical example:

  • Flight A costs $47 or 1,633 points + $5.6 (2.535¢ per point)
  • Flight B costs $196 or 11,935 points + $5.6 (1.595¢ per point)

In general cheaper flights will give you a better value per point but regardless you’re still paying 72 points per $1 on the base fare. Keep in mind that is only for Wanna Get Away Fares, the other fares have a sliding scale.  Here is a history of how much these points have been worth:

  • 2011-2014 (March): All points were worth a fixed 1.67¢ per point
  • 2014 (April) – 2015 (April, 16th): All points were worth a fixed 1.43¢
  • 2015 (April 17th) – 2016 (April 19th or so): Fares in the lowest class were worth a fixed 1.43¢, fares in other classes were on a sliding scale
  • 2016 (April 19th or so) – Currently: Fares in the lowest class are worth a fixed 1.39¢, fares in other classes were on a sliding scale

Don’t I Get Double Value By Holding The Companion Pass?

The Southwest Companion Pass allows you to have one companion fly for free (you just have to pay the $5.6/$11.20 TSA fee). Some people like to think that 2.78¢ per point, but your companion would be able to fly for free if you booked a cash fare as well so that doesn’t make any logical sense.

Gift Cards

Southwest have large variety of gift cards that you can redeem points for at the following rates:

  • $25 gift card = 3,000 points (0.833¢ per point)
  • $50 gift card = 5,000 points (1¢ per point)
  • $100 gift card = 10,000 points (1¢ per point)
  • $150 gift card = 10,000 points (1¢ per point)

Basically after you redeem more than 5,000 points you’ll get 1¢ per point in value. I know that Southwest used to sometimes have sales on these gift cards, but I can’t remember the last time they did (please let us know in the comments).

Some of the gift cards they offer are as follows:

  • Target
  • Chili’s
  • Starbucks
  • Nike
  • Bed Bath & Beyond
  • Gap
  • Kohl’s
  • Staples

Other Travel

Southwest advertises having options such as car rentals & cruises, but these are just gift cards to those options at the same rates as above.

Merchandise

Like most points programs, Southwest allows you to redeem your points for merchandise. I thought I’d do a quick price comparison to show you that this is a terrible deal:

  • Parrot Bebop Drone & Sky Controller Bundle: 80,358 points or $299 on Amazon (0.372¢ per point)
  • Bose SoundLink III Bluetooth Mobile Speaker: 39,578 points (on special from 41,991 points) or $269 on Amazon (on special from $299) gives you 0.679¢. Even if we compare the Southwest RR sale price to full price on Amazon you’re still only getting 0.755¢ per point.

Honestly please do not redeem for merchandise, it’s for suckers.

Our Verdict

You should be aiming to use your Southwest Rapid Rewards points for Southwest flights to get the best value out of them, it looks like they have reduced their gift card redemption options somewhat compared to when I remember last checking but at least you know you can get 1¢ per point there (and convert that to cash at probably 80-90% of facevalue for a base line of 0.8¢ per point).

 

 



20 Responses to How Much Are Southwest Rapid Rewards Points Worth?

  1. MrDioji says:

    Doubling the points value to 2.78¢ per point makes logical sense in some cases. For example, if you have an opportunity to easily MS RR at 1.8¢ per point and have a redemption in mind for before the CP expires, then you should take that opportunity because you can get 2.78¢ for that 1.8¢.

    The math you’re thinking of is that it’s actually like the value of a penny is doubled to 2¢ for Southwest flights – 2.78¢/2¢ if you’re comparing using points to paying cash, which ends up being the same 1.39¢. But there are uses for the 2.78¢ per point math.

    • milesjjcc says:

      In that case you should MS for UR at 1.8. Gives you additional flexibility.

      • milesjjcc says:

        Also why not to spend directly 1.4 cents then & buy it in cash? Only advantage with points is cancel as it is

      • MrDioji says:

        Right. For the example UR can equal RR. Say you typically get 1.7¢ per point out of your UR, but now you have the CP. Suddenly UR at 1.8¢ per point is worth it. So the 2.78¢ valuation makes sense in certain circumstances.

        The caution is: don’t necessarily spend your last 20k UR on a Southwest flight thinking your getting double value, then pay cash for your Hyatt hotel which would’ve given your 2¢ per UR point. Use your UR for the Hyatt hotel, then pay cash for the Southwest flight, where your dollars are worth double.

    • csdx says:

      That still doesn’t make sense, why MS at a cost of 1.8c per point when you could just outright pay for the flight at an effective 1.39c per point?

  2. Mike says:

    As someone who redeems a couple hundred thousand Rapid Rewards points per year, all for Wanna Get Away fares, I can say that the 72 pts per dollar isn’t correct. I account for taxes in all of my calculations, and I can’t remember the last time that I got less than 1.5 cpp (67 pts per dollar), and a much more typical rate is 1.8 cpp (56 pts per dollar). I just spent awhile pulling up all sorts of random routes, and it verified my experience. There’s no correlation in cpp value to ticket price (I was just as likely to find 1.5 cpp or 1.8 cpp value on a $300 one way ticket as a $60 one way ticket), so I’m assuming that there’s some sort of dynamic pricing within that 1.4-2.0 cpp range.

    I agree other points made here – clearly we shouldn’t intrinsically value Rapid Rewards points as double their value because we have a CP, and in general it’s much more useful to do bonused spend on a UR card.

    • Justin says:

      Yes I agree – don’t travel on Southwest much but when browsing for prices/point values I have noticed the values differ and can reach that 1.7-1.9 range occasionally!

    • Jon says:

      The value of a Southwest point depends on the dynamic fare pricing & the route booked.

      Essentially the points required for a flight will range from ~72-78 pts/ base fare dollar. This is the current dynamic pricing that they have in place so there is no longer a fixed number of points per dollar in base fare.

      Now on the upside the reason people see the overall redeemed value to be greater than 1.5cents/pt is that there are a handful of taxes and fees that get rolled in at no extra rapid reward charge.

      The excise fee (7.5% of the base fare), segment fee ($8/segment), passenger facility charge ($9/layover) are all included at no extra charge when redeeming rapid rewards. So when the base fare is low you will essentially see a higher redeemed value as the fixed charges get rolled in at no extra point charge. There are a couple other pricing idiosyncrasies but the above is roughly what you should see.

      The question should be what is the current best & worst overall redeemed value for a southwest rapid reward? The author should state the ballpark range you should be seeing.

  3. Justin says:

    Doc, can you explain where I’m going wrong in my math:

    Hartford –> Cabo Jan 7

    Price of $213 OR 11,840 pts w/ $26.16 in taxes

    so for cpp you get (213-26.16)/ 11,840 *100 = 1.58cpp

    I can repeat this with other flights and I get varying point values from 1.4 to 1.6

  4. Matt K says:

    I agree with the above as well, rarely less than 1.5 cpp. Southwest points have a lot of intangible value that rarely gets factored in too. I hate having cash fare cancels on southwest because then I have to track the old confirmation #(s) and those expire in 12 mos from booking whereas points bookings go back to account and taxes back to card. So less booking “because my travel cert expires soon”. I rarely fly a flight at the points I originally redeem at. By rebooking whenever a sale comes up, it’s basically like having a stock option vs holding stock and trying to time the market on buying. Yes, that can be done with cash bookings but again, if you book early, by the time you relock you might only have 6 mos to use that credit. I value southwest points (agreed, I’d rather have them sitting in UR) at least 2 cpp.

  5. Benjamin Perley says:

    All that’s true, but at the expense of not earning status.

    I do tend to use points for speculative bookings just for the creature comforts of not having a dozen orphaned TTF to keep up with. Too much trouble when my average booking is a cheap $100 sale fare.

  6. Bob says:

    Can you add to the article any other programs that let you transfer points to your Southwest account? Like can you transfer American Express for Chase points into Southwest rapid rewards points ?
    Thanks

  7. Stvr says:

    I quibble with the valuation because

    -PayPal sells Southwest gift cards at a discount multiple times a year
    -you earn 5 Chase points per dollar when buying them with Ink
    -you earn points when flying on a cash fare

    So I’d say the points are worth 10% less as a result. As always, cash is king

    • Stvr says:

      Let me rephrase in a more legible way. About a year ago, my brother told me he had WAYYY too many Southwest points.

      “Instead of buying that ticket you’re about to buy, use my points and give me the money you would have spent.”

      At the time eBay was having a sale on Southwest gift cards. There was also a portal cashback/eBay bucks component to the deal, both don’t exist anymore. I was set to earn 5 points per dollar, which are worth at least five pennies. Also, discounted eBay gift cards purchased at GameStop! Also, cashback on gift cards to GameStop purchased at CardCash! Plus I would earn Southwest points, which are worth a penny each.

      So I crunched all the numbers and offered my brother… 1.2 cents each. Exactly the amount of cash I was about to put out there.

      He took the money but stopped bragging about how many southwest points he was earning on his Chase card.

  8. Bert says:

    How long do gift cards typically take to process and ship? I redeemed for 100 gc for lowes and it still hasn’t been sent. 5 business days so far. The southwest portal led me to some website called awardhq

  9. Aaron says:

    Agreed the mathematical valuation of Southwest points does not double with the companion pass given the opportunity to book the same base ticket with cash. However, for some, I do think Southwest points are more “valuable” when trying to maximize a pool of different points and avoiding paying cash for travel.

  10. barschools says:

    I value Southwest points at 3 cents apiece with the companion pass. As others have stated, when you factor in taxes and fees, you get about 1.5 cents apiece, Your points will go twice as far with the companion pass. Sure you can get the same deal booking with cash. In that case your cash will go twice as far. Either way you are getting a 2 for 1 deal by having the companion pass. Effectively doubling the value of your points if you book with points or doubling the value of your cash if you book with cash.

  11. brian says:

    May want to fix: $150 gift card = 10,000 points (1¢ per point)

    s/b 15,000

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