MMMT: Are Amex Offers That Pay Out Membership Rewards a Good Deal?

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Are Membership Reward Amex Offers a Good Deal?

Monday Morning Miles Talk is a regular series that has some smaller, more quirky ideas to kick off the work week.  These are essentially random ideas that I wanted to share with you.  Here are the previous entries.

Are Membership Reward Amex Offers a Good Deal?

I love Amex MR Offers, you love Amex MR Offers, we all love Amex MR Offers…but should we? Are they really good deals or are we just buying Membership Reward points at a discount?

I would like to take a look at a few examples that are currently available and come to a conclusion on these questions.  My thinking may not match what your thinking but I would love to have that discussion about it in the comments section!

Saks Fifth Avenue Amex Offer

There is currently an Amex Offer for Saks Fifth Avenue.  The offer gives you a credit of $50 when you spend $250 at Saks Fifth Avenue.  There is a second offer on some Membership Rewards earning cards where you get 5,000 MR points instead of $50 after spending $250. This offer seems to come around every year around the holiday season.  I personally love this offer and take advantage of it every year…but I prefer the $50 in credit.

When this offer comes out I usually buy gift cards in store.  I link my cards to my Ebates account to get the in store portal payout as well, extra tip there :)! I then turn around and sell those gift cards. The best public price offered is 82% from Card Kangaroo so we will use that amount in our example.  People with bulk selling relationships can usually do better than 82%.

At 82% you would get $205 for your $250 gift card.  That is a quick and easy profit of $5, plus whatever you get from Ebates, plus whatever points you earn for the purchase.  That isn’t a bad deal but what if it is a card that offers 5,000 MR points instead of cash back?  That would mean you are paying $45 for 5,000 MR points or a cost of $0.009 per point.

Almost 1 cent per point is not a great deal.  That number could be reduced some if the Ebates portal pays out, but there is no guarantee there.  The cash offer is superior here since you can usually earn MR points at a much cheaper rate than .9 cents a piece.

Are Membership Reward Amex Offers a Good Deal?

Exxon/Mobil Amex Offer

The Saks Fifth Avenue offer was a more obvious conclusion so let’s take a look at the Exxon/Mobil offer.  With this offer you get 1,000 MR points after spending $25 at the pump at one of their locations.  Sounds like a great deal, I mean most people need to buy gas. Free points!!!

Not so fast, I discussed in an earlier article on how to get fuel at a discount. You can normally get gas at a minimum of a 13% discount.  More if you go to a station that treats gift cards as a cash purchase and gives you the 10 cents off per gallon.  You also have to take into account whether or not Exxon/Mobil is higher priced in your area, they are in mine.  So let’s say you can get gas 15% cheaper at another gas station.

On a $25 purchase that is $3.75 in savings.  That means you are essentially purchasing 1,000 MR points for $3.75 or a cost of $0.00375.  Now most people wouldn’t have a problem purchasing points at that price.  You have to try really hard to get a value of less than that per point…and even then it may not be possible.  Maybe a toaster would get you less than $0.00375 per point?

Conclusion

The American Express Amex Offers that offer Membership Rewards points can be an easy way to rack up some points quickly.  But, they may not always be the best deal.  So make sure you crunch the numbers before taking the plunge.

I personally value the cash offers more because, cash is king!  You are getting an instant return and I am not a fan of buying points.  Don’t get me wrong I still take advantage of most of the Membership Reward paying Amex Offers when they make sense. I do make sure that I use up the cash ones first though.  If you have enough offers split between the two types you can usually make enough of a profit from the cash offers to offset your purchase of points with the MR offers.

 

 

What do you think?  Are all Amex Offers that offer MR rewards worth pursuing if they are less than 1 cent per points?  Do you usually crunch the numbers before making the purchase? Or do you consider them “free points” that are a throw in with your regular purchase? Let me know in the comments section.


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16 COMMENTS

  1. Just saw on Fri AmEx had a Marriott offer, 4000 MR pts for stays paid for beginning that day. Checked my Biz Plat acct, saw and accepted the offer, checked into my hotel Fri (existing ressie), MR pts posted today. $80 value (@2 cents) for something I already was buying. Ymmv. Cheers.

  2. This may be blasphemy for miles and points but I’m in cash mode right now so I use my Schwab Plat to redeem the MR and I love the MR offers! To me, I’m getting another 25% bonus. Hopefully I’ll be able to go back to mile collecting soon but this works for me. Between the Schwab Plat, biz plus, and MR offers, I’m getting all kinds of cash!

    • You do you David. If you are miles rich and could use the cash more then that is the way to go.

      I have been focusing on cash more with the death of 5x on PPDG.

      If you are able to cash them out at 1.25 cents per point then you are usually going to make at least that 25% so that is a good deal.

  3. Your “quick and easy profit of $5” is essentially buying a 5000 penny statement credit for $45, or $0.009 per penny. Whether almost 1 cent per penny is a great deal depends on how much you value alternative currencies. If you value MR at much more that 1 CPP, buying cash seems pretty lame.

    • There are so many ways to earn MR’s at a cheaper rate than that and I get into this to travel for as cheap as possible….buying points at 1 cent a piece, while may be a deal compared to paying cash, is not all that cheap imo.

      But that all depends on the person – everyone will have their own view which is what makes it interesting. If you only use MR points for first class international flights or you are unable to increase spending other routes or get sign up bonuses then you probably lean more towards it is a good deal.

      • My point was more that the Saks offer you detailed was a poor way to generate cash as well. There are so many ways to earn pennies at a cheaper rate than that…

        I wouldn’t be a buyer of EITHER cash or MRs on that deal.

        • If you are able to pump through 7-8 cards while at the mall and while getting in store cash back from Ebates – $10-20 per card (depending on the current rates) then it is a good deal. Especially if you pair it up with Macy’s and Athleta offers etc. while there. Plus whatever points you earn for the spend. I usually leave my mall trips until I have 3-4 offers lined up at once.

  4. 1000 MR points for a $25 gas purchase is an excellent deal! The only exception is if you live in an area (the Mid-Atlantic is one) where you can get your gas for basically free if you buy gift cards at the supermarket during the promotional periods. Giant/Stop&Shop is one such opportunity, especially with the recent link to Shell’s FuelRewards program.

    • Kroger affiliates cover much of the country with that deal. You can also buy gas gift cards on eBay at 8-10% off plus a 10 cents per gallon cash price discount. The MR deal is still a good offer but there is still cost involved since you could get it cheaper elsewhere. That is the fun of the discussion though. That deal is more clear cut where some of the fringe deals are more questionable.

  5. I’d rather get the MRs than cash. I have an Amex Business Plat card. I book tickets with Amex Travel with my airline of choice and then get 35% of those points back. I used this feature twice this year and got back over 75,000 worth of MR points (one trip to Singapore and another to CA). With these offers I am now at 40,000 points and the more I get, the more I’ll get back. This is only on the AX business card however, but it’s a good deal if you can play it right.

    • Booking flights that way is almost essentially using them as cash with a 35% increase so yes I agree if you go that route the MR’s would always be better. Thanks for the comment!!

  6. This article might have been useful if you actually told us how you get your MRs at a “much cheaper rate.”

    I am guessing it involves quite a bit of driving to and standing in line at Walmart…

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