Southwest Rapid Rewards Points Devalued, But Still Good Value To Be Had

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Southwest made an unannounced devaluation of its Rapid Rewards program overnight, increasing the number of points needed for award flights. Thankfully the devaluation isn’t as severe as it could’ve been as the value of points have only dropped by ~6%.

Before this change Southwest points could ostensibly be redeemed for Wanna Get Away fares at a rate of 78 points per dollar, while now they can be redeemed for 83 points per dollar.

That doesn’t really tell the whole story though because of how Southwest does – and doesn’t – charge taxes and fees. When booking paid fares, you pay several taxes and fees on domestic flights. For example, a $58.98 flight from ATL to FLL costs $41.47 for the base fare and has $17.51 in fees added on:

Southwest $58.98 flight

When booking that same flight as an award ticket, you’re charged 3,443 Rapid Rewards points and the $5.60 fee, but other taxes and fees aren’t charged.

Southwest 3,443 point flight

With this example, that means that 3,443 points aren’t only saving you the $41.47 – they’re saving you $11.91 in fees too. That means redeeming points would be saving you a total of $53.38 or a rate of 1.55cpp.

Those are the figures for a cheap flight though where taxes and fees make up a larger proportion of the overall cost. The redemption value therefore isn’t as good when booking flights that are more expensive. For example, a flight from ORF to LAX can cost $353.28.

Southwest $353.28 flight

When redeeming Rapid Rewards points that same flight will cost you 25,154 points plus $5.60 in fees. Although the other taxes and fees are also higher at $44.63, the points are saving you 1.38cpp.

Last year Southwest generously allowed people to convert travel funds to points at a rate of 1.28cpp. While I’m still glad that I took advantage of that opportunity, it’s a shame that so relatively soon after allowing Rapid Rewards members to redeem your travel funds for points that they’re reducing the value of your newly converted points.

Ben at One Mile At A Time has also made the good point that with Rapid Rewards being a revenue-based program, it doesn’t really make sense that devaluations like these need to be conducted in the first place. If Southwest raises the cash price of flights then the number of points needed to book those same flights as an award go up automatically, so why do they then need to devalue points further by requiring even more points per dollar of airfare?

This is therefore a disappointing change that’ll need to be taken into account when deciding whether to book with points or cash, as well as when deciding whether to transfer Ultimate Rewards to Southwest, but as devaluations go things could certainly have been worse.

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