Rookie Wednesday: What NOT to spend your SkyMiles on – EVER!

Welcome to a weekly feature on the Eye of the Flyer blog. Each week this series covers in a “rookie” way either a Delta or travel related theme and attempts to break down to a basic level each topic. You can read up on all the previous posts HERE. Now on to this week’s feature.

It is spreading like the flu! All the airlines are doing what it at least seems like Delta started, that is, spending your hard earned points on things you ought not to spend them on. Take for example the latest just “amazing” opportunity from KLM. They are suggesting:

“Flying Blue members can use their Award Miles to purchase tax-free items on board their flight. So be sure to check out the Sky High Collection inflight magazine when you take your next KLM flight.”

Well as to the latter bit, I think most of us have thumbed through the inflight catalog and have marveled at the prices for things we could purchase on the ground for so much less than these prices in the air. As for the first bit, well, KLM does have some truly exceptional values for spending their Flying Blue points each month if you can take advantage of them.

So what about SkyMiles? What are all the really bad ways of spending your points. The list is long but for a rookie post it is great to look at them and some important baseline facts.

The first is all of this is based on just what YOU feel a SkyMile is worth. If you feel they are all but worthless then how you spend them really does not matter. However, if you understand that at a bare minimum by holding a Delta CO-branded AMEX card personal or business (Gold, Platinum or Reserve) you can get at least 1 cent value from each point with the Pay with Miles program, that number should be the bottom floor of value for each SkyMile. If you are getting less than 1 cent then you are getting the short end of the stick as they say. Now if you are using them for award redemption, you should be able to see much higher values than 1 cent but since we are talking rookie here let’s make it simple.

Top shelf drinks in the Sky Club. You may say, “oh wait Delta is giving me 2 cents each in value to buy drinks so this is a good deal!” If you consider paying exorbitant Sky Club prices for drinks a good deal then go ahead. Sure if I am at a restaurant I have to pay what they are charging but in a club you have a choice between complimentary drinks at no charge and getting poor value for your SkyMiles. Let’s look at many other options from Delta.

Hotel stays. Take one simple example for comparison. Let’s say you want to stay at the very nice Westin near the Atlanta airport on March 15th for one night. At our MAX bottom floor level of SkyMiles value you are paying over $250 for your one night stay, that is, you are getting a low 7/10ths cent value for each point vs paying cash let alone the comparison cost of spending SPG points instead. I could do this all day long but you get the point.

Car rentals. Again, using the March date above, we need a car for two days in Atlanta. We can burn ~$126 worth of SkyMiles for the rental or pay cash and get it for ~$69. That means if we used our SkyMiles for this rental we would be getting just over 5/10ths cent value for each point.

We really could do this all day at the SkyMiles Marketplace but these two example clearly show that value cannot be found using your points this way. Let’s move on

We all want upgrades. Many of us work hard to keep our status to get “free” upgrades. Delta will allow you, under many cases, to upgrade with SkyMiles. But should you? First Delta hides the upgrade charts they use just like they hide the SkyMiles charts. The only way to know how much it will cost you (based on your fare class or award type) is to call Delta. Let me put this simply – expect to pay nearly as much as a FREE ticket would have cost you if you had booked at the right time. In other words, you are paying for a ticket twice if you do this, that is, first with cash and then again with SkyMiles. Don’t ever do this.

Donate SkyMiles. I am not against charitable giving and donate myself. But you know what charities like? Cash. I give on a travel card that rewards me with 6% points back and my CPA says when I donate cash I can take a tax deduction. With SkyMiles, yeah, notice the wording above from Delta.com

Transfer SkyMiles. I often get the question of can I transfer SkyMiles to someone. Sure. For 1 cent each in fees. Now how much did we say a SkyMiles is worth bare minimum? So your net value of your SkyMile for doing this becomes 0/10ths of a cent. Yes ZERO. Do we need to talk about this more?

I think this last one is a perfect place to end this as we could do this all day long and Delta, in their infinite wisdom, is trying to come up with more and more ways for you to get very little value from SkyMiles.

Let’s face it I could have summed up this post with a simple answer, that is, only spend your SkyMiles buying tickets and netting at least 1 cent value each. Clearly awards can yield even higher value either when Delta has award “sales” or you can find a Delta One redemption that would have cost you thousands of dollars in cash.

Any questions on any of this? Fire away in the comments below.- René