There are so many different ways to use American Express Membership Rewards points it’s often confusing to understand which redemptions are best. Most ‘experts’ will tell you to transfer points to a loyalty program. By transferring Membership Rewards to a partner loyalty program you’ll most likely get maximum value from your points. When using points efficiently you’ll easily get upwards of $0.08/point of value!
Once you transfer points to an airline or hotel loyal program you can use those points toward free flights or hotel nights. The goal always being to get maximum value from each Membership Rewards point. For example, you can use just 72,000 points for a Singapore Suites class flight from New York to Frankfurt. That flight typically costs around $6,000, so in this case MR points are worth around $0.08/point.
The only issue with this process is the time it takes to find available flights. Often people transfer points before finding an available flight. They’ll usually have specific dates in mind, but just expect to find saver level flights available. Unfortunately, when they begin to book their perfect first class flight, they can’t find anything. The easiest way to solve this problem is to only book flights far in the future or within two weeks of traveling. Otherwise, expect to spend a lot of time searching and waiting to find the flights you want.
Purchasing Merchandise With Membership Rewards Points
Instead of putting in the work to find flights, many people opt simply to purchase merchandise with their Membership Rewards points. After all the process so much easier. To redeem points for merchandise you just have to browse the Membership Rewards mall and pick your products. There aren’t any frustrating hoops to jump through to redeem points.
When using Membership Rewards points to pay for merchandise you’re going to get approximately $0.005/point of value. That’s just half a cent of value per point when using the Membership Rewards mall. It’s important to keep in mind those same points could be worth $0.08 when used to pay for premium cabin flights.
It appears nearly ever product listed on the Membership Rewards mall is worth $0.005 per point. Obviously that’s a fairly terrible value per point, but luckily there is a better way to use points for purchases.
Use Membership Rewards Points On Amazon Purchases
A few days ago I wrote about a unique offer to save $50 on Amazon purchases when paying with Membership Rewards points. While I only needed to use 1 Membership Rewards point to save the $50 I could have used more. More importantly this offer linked my Amex and Amazon accounts which means I can now use points to pay for any and all Amazon purchases. No doubt this is why Amazon offered the $50 credit to begin with.
Again, just because you can use Membership Rewards points as a payment option, it doesn’t mean you should.
In the above example it appears Membership Rewards points are worth approximately $0.069. Although that redemption rate is higher than the same $0.005 when buying products directly from the Amex mall, it again is not a great value. However, it appears if you really want to use points to pay for purchases your better off doing so through Amazon instead of using the Amex mall.
Please Don’t Use Membership Rewards Points For Merchandise!
I’ve said it before and I’ll say it again, please don’t use points for purchases! Consider this scenario. The Personal American Express Platinum card features a once in a lifetime 50,000 points sign-up bonus. If you use those points to buy products through the Amex mall that sign-up bonus is only worth $250. Using the same 50,000 points to pay for Amazon purchases makes the sign-up bonus worth approximately $345. Lastly, if you transfer those points to an airline loyalty program and get 5 cents per point of value, that same once in a lifetime sign-up bonus is now worth a staggering $2,500! In this scenario, you’re losing $2,250 of value when using points to buy merchandise from the Amex mall.
No matter who you are $2,250 is a lot of money. I think when you look at points like this it puts things into perspective. I’ve heard so many people complain about how difficult it is to use points and I understand their argument. However, I think if they fully understood how valuable those points are they’d understand why it’s well worth the effort. Likewise they’ll also think twice next time they head over to the Amex mall to buy a pair of Bose headphones!
Final Thoughts
My goal of this post was to show that using Membership Rewards through Amazon represents better value than when using points to pay for Amex mall purchases. However, each time I see just how little value either option offers I can’t help but tell people to avoid either option. The only way I’d ever consider using points to buy merchandise is if I needed to liquidate points quickly. Even so I’d still recommend instead transferring points to a loyalty program.
If you are considering using points to pay for a purchase, instead let me know. I’ll buy the products for you and will only charge you a rate of $0.01/point! This way you get double the value from your points and I have the ability to redeem those points for future travel. I’m only kidding, this definitely violates the Membership Rewards terms and conditions.
