Southwest 50% Bonus on Purchase/Gift/Transfer of Points – Sample Points Values & Is It Worth It?

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southwest point bonus analysis

Southwest 50% Points Bonus

Southwest announced today that they are paying out a bonus on the purchase/gift/transfer of Rapid Rewards points through July 25. The bonus works as follows:

  • Buy, gift or transfer 4,000-10,000 points and get a 30% bonus.
  • Buy, gift or transfer 11,000-19,000 points and get a 40% bonus.
  • Buy, gift or transfer 20,000+ points and get a 50% bonus.

Since gifting and buying are the same thing, there are really only two parts of this promotion. Lets break it down to see if it’s worth it.

Transferring Points

Generally with promotions like this it makes sense to purchase/transfer the amount that gives you the largest bonus possible. In this case that is 20,000 points. Lets look at the math for transferring 20,000 points.

  • Cost: $200
  • Bonus points earned: 10,000
  • Cost per extra point: $.02

Buying or Gifting Points

Now with both buying and gifting, the price is different. Purchasing 20,000 Rapid Rewards points costs $550. Since you get a 50% bonus, you end up with 30,000 points. Here is the math:

  • Cost: $550
  • Total points: 30,000
  • Cost per point: $.0183

southwest point bonus analysis

Value of the Points

Southwest points used to have a fixed value, however that has changed recently. Here are three sample flights I searched for to check the value of redeeming points.

  • MDW-LAX August 12, 2015: $188 or 11,971 (Points Redemption Value: $.0157)
  • MDW-LAX December 26, 2015: $329 or 22,776 (Points Redemption Value: $.0144)
  • DAL-LGA August 12, 2015: $104 or 5,854 (Points Redemption Value: $.0177)
  • DAL-LGA December 26, 2015: $217 or 14,344 (Points Redemption Value: $.0151)
  • BWI-FLL August 12, 2015: $89 or 4,877 (Points Redemption Value: $.0182)
  • BWI-FLL December 26, 2015 or $284 or 20,086 (Points Redemption Value: $.0141)

Is It Worth It

southwest point bonus analysis

As you can see, it is almost impossible to get your money back in terms of value on the redemption side. (You will never get $.02 so forget the transfer option.) In one case the value of the redemption (BWI-FLL $.0182) came close to the purchase price ($.0183), but by paying the cash fare you would earn points, so that would make more sense.

Basically this evidence just reinforces my beliefs when it comes to any of these deals. It might make sense to top off your account for a specific redemption, but for most people it just doesn’t make sense. Since Southwest’s program is revenue based, you are almost always going to lose out.

Conclusion

It is almost never a good idea to purchase points and this just proves that. For some people in special situations purchasing these points might make sense, but for most people this should be a pass. And not the companion variety.


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2 COMMENTS

  1. I need southwest points for a domestic trip coming up in Sept. Could I transfer 20k ultimate reward points to southwest into my account, then transfer those 20k points to my wife’s Southwest account and get the 50% transfer bonus? Or could I gift them to my spouse or kids to get a transfer bonus?

  2. Solid breakdown! This is something I’ve wondered for a few years of seeing these promos but never acting on them. However, now speaking of that Companion Pass, I just got it. And my named companion has a lot of points as well. I’m guessing that when one of these transfer points bonus promos pops up it would make sense for her to transfer the max amount to me, being that I’ll be able to use those points to book flights where she can be added on for free. The cost of the points would go twice as far and her points would be better spent under my account. Sound right?? Thanks!

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