Airlines and hotels are happy to sell you points or miles in their loyalty programs. It’s a highly profitable side business for them.
For consumers, on the other hand, buying miles or points is almost always a bad deal. Almost always.
There are two scenarios where buying miles may be the sensible thing to do. The first is in the case of limited need. You’re just short of an award threshold, and purchasing the handful of miles still needed to qualify for that free trip is quick and easy.
The other case is when airlines or hotels discount the price of miles enough to fundamentally change the value equation.
How much discount is enough to make miles a smart buy? It depends on the loyalty currency, among other things. But US Airways’ recurring 100 percent bonus for purchased miles is certainly a case in which the value of the miles redeemed can exceed the price of the miles purchased—in other words, when buying miles in quantity might make financial sense.
Can the same be said of Starwood’s newly announced discount for buying Starpoints?
Through December 31, Starwood points can be purchased at a 20 percent discount, either for a member’s own account or as a gift for another Starwood Preferred Guest member.
There’s an annual limit to the number of points that may be purchased of 20,000 per member.
Deal or No Deal
The normal price of Starpoints is $17.50 for the minimum purchase of 500 points, and $700 for the maximum 20,000 points. With the discount, 500 points cost $14, and 20,000 points go for $560.
There are multiple options for redeeming Starpoints, including free hotel nights and airline frequent flyer miles. Free nights range in price from 2,000 points for a weekend night at a Category 1 hotel to 35,000 points for a night at a luxe Category 7 property.
A 20 percent discount isn’t enough to move the needle from “No Deal” to “Great Deal.” But if you’re already planning to buy Starwood points, or you’re on the fence, this offer makes the expenditure that much more palatable.
Reader Reality Check
Have you purchased Starpoints in the past? Will you now?
Where did you find the best value in redeeming your points?
This article originally appeared on FrequentFlier.com.