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Southwest is offering a promotion where you can purchase their points with a 50% bonus. This promotion ends today, May 30, 2016, and means you are ultimately purchasing points at 1.83 cents per point.
As I mentioned in my original post when this promotion was initially launched, I stated that overall this is NOT a good deal. Southwest has a fixed redemption program and when you go to redeem your points you are redeeming them for approximately 1.43 cents per point. This is LESS THAN the purchasing price of 1.87 cents per point. Also, purchasing points does not count towards earning the companion pass, so there is no real benefit there.
But, Purchasing Points Could Offer you a Cheaper Insurance Policy
With that being said, there is one scenario when purchasing points might actually be worthwhile. Southwest points give you the flexibility to cancel at any point for NO FEE (up to 10 minutes prior to the flights departure). While flights purchased with a credit card can also be cancelled with no fee, you’ll receive the amount paid back in a voucher which comes with a 1 year expiration date from the date the flight was purchased and is non-transferable. With a flight on points, the points simply go back into the account they came from and there is no timeframe on when they need to be used again.
Because of the above, if you are one that loves flexibility and like to have an insurance plan on your flights just in case, then purchasing points for slightly more than what they are worth can actually be a cheaper way to insure your flights.
For example, I looked up a random flight from Baltimore to Los Angeles that cost $268. This same flight requires 17,949 points. Assuming you have a zero balance in your Southwest account, this would require you to purchase a total of 18,000 points to redeem for the “free”flight. With this promotion, that will cost you $330, plus the taxes on the flight which was $5.60, for a total of $335.60. That means you are paying an extra $68 to have full flexibility. It also allows you to purchase many flights speculatively if you aren’t 100% sure of your travel plans. And if you are looking to travel during a peak time period, purchasing flights early could be a lot cheaper.
I personally would not pay that premium and for most people would not advise it. But, I know for some it could ultimately save them money in the long run.