A frequent flyer mile is an ephemeral thing. Or at least its value is.
At the low end, if a mile can't be redeemed for a product or service desired by the mile's owner, then that mile is effectively worthless.
At the other end of the spectrum, if the miles can be successfully redeemed, their value varies according to the price of the award. Redeem 25,000 miles for a ticket that would have cost $250, for example, and the miles have a value of 1 cent apiece. So in theory, the sky's the upper limit.
That variability puts the onus squarely on the mileage earner to make the most of his miles. The following two recent reader notes illustrate the responsible approach nicely, showing how miles can be redeemed for good value in one case, and for great value in the other.
First, this from Anthony S.: "We recently were able to redeem 150,000 Delta SkyMiles for three open-jaw tickets from Los Angeles to Vienna and Budapest to Los Angeles. These seats would have cost about $5,250, valuing each mile at 3.5 cents."
For context, my estimate of the current average value of a frequent flyer mile is 1.2 cents.
Rod C. did even better: "I booked a Swissair nonstop from Los Angeles to Zurich and a return on Lufthansa from Frankfurt to Los Angeles last April for 100,000 United miles (I booked the ticket the previous October before first class went up to 120,000 miles). The face value of the ticket was $12,500. 12.5 cents a mile! Not bad. It's the only mileage redemption that really makes sense."
The point is not that premium flights to Europe are the best mileage investments, although that strategy served Anthony and Rod well. Rather, these success stories show that it pays to do the math: the dollar value of the award divided by the number of miles redeemed equals the value of the miles. More value naturally trumps less value. And no savvy consumer would want to be on the receiving end of a below-average deal.
So, at a minimum, do the math and confirm that you're at least getting more than 1.2 cents per redeemed mile. While you might not have the miles, or the inclination, to fly first class to Europe, at least you'll protect yourself from cashing in 25,000 hard-earned miles for an award ticket that could have been purchased for $97.