Starting today, there is a promotion where Southwest is selling their points at a 25% discount. While a discount always sounds great, Southwest has a fixed redemption program, so you’ll still not get the value that they are worth, typically. But let’s go through the math to see when it might be worth it to purchase the points through this sale.
Without the promotion, the cost to purchase points is a flat $0.020625 per point. Points can be purchased in 500 increments (starting at 2,000 points), so every 500 points will cost you $10.31. This is actually cheaper then some promotions in the past were you get a 25% bonus instead of 25% off. You can purchase up to 60,000 points through May 31, 2014.
As mentioned above, Southwest has a fixed redemption where each point is worth $0.0143. So to buy points for more than they are worth is definitely NOT a good value. However, if you are close to redeeming for a flight and shy a few points, do the math to see if purchasing points will ultimately be worth it to redeem for a free flight.
Example 1: Let’s say you have 5,000 points and the number of points you need to redeem for a free flight is 8,000 points. This means you’ll need to purchase 3,000 points for that free flight. The cost to purchase those 3,000 points will be $61.88. In this particular scenario you are overpaying for the flight by $17.10 ($0.02 per point to purchase the points – $0.0143 per point to redeem = $0.0057 x 3,000 points = $17.10). It really depends on if you fly Southwest often and can continue to accrue points to have enough to redeem for a free flight or just trying to deplete your account and prefer to pay less for a “free” flight.
Example 2: Now, there is one scenario where it actually might benefit you to purchase points and actually get a flight for cheaper than the advertised flight. As I mentioned about a year ago, Southwest and AirTran allow you to transfer points and credits back and forth freely, allowing you to redeem for a free flight regardless of price.
When you purchase points, these points can be transferred to AirTran credits or back to Southwest credits – giving you the opportunity to redeem for a “free” flight on either airline.
Transferring Southwest points to AirTran credits: 1,200 Rapid Reward points = 1 A+ Reward credit (*you need 8 A+ Reward credits for a free one way ticket, 16 A+ Reward credits for a round trip). So you need to accrue 9,600 Southwest points to earn a free one-way flight on AirTran. With this promotion, you can purchase 10,000 points for $206.25. So if an AirTran flight you are looking to purchase is more than $207 one-way than it is worth it to purchase the points to redeem. However, keep in mind that AirTran free tickets are capacity controlled so you will need to call them in advance to see if the flight you are looking at is available for free ticket awards. Many times, from personal experience, AirTran representatives will override availability for you as long as it is not a black out date. They will also put the ticket on a 24 hour hold for you.
Transferring AirTran to Southwest: Credits: 1 A+ Reward credit = 1 Rapid Reward credit. So once you transfer your Southwest points to AirTran, you can then transfer them back to Southwest. Similar to AirTran, it requires 8 Southwest Rapid Reward credits to redeem for a free flight. It will cost you the same $206.25 to “purchase” a one-way flight, so see if the flight you are looking at is more than this and it could be worth it to take advantage of this promotion.
Ultimately, this probably is not a good promotion for most of you, however, there are a select few that will see the benefit. Also remember that you will not earn points (for Southwest) or credits (for AirTran) when redeeming free flights, so take that into consideration. With Southwest, the points earned from a paid flight can be thought of as 8.5% back to use on a future flight.
Purchase Southwest points here and it will require you to sign into your Southwest account.
Editorial Note: Opinions, analyses, reviews or suggestions expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by any card issuer.