I started this post in December, 2014 asking a question if you would buy United Airline Miles at 1.8 cents a piece. It’s pricey, I know. You would need to value 1 United mile at least $.018 in order to make that kind of purchase. So I looked around what everyone else’s valuation were:
Gary from View From The Wing: $.016
Since then, things changed a bit and I have been able to buy it for nearly a penny a piece. Traditionally, I like to buy my miles under a penny each. This means I’ve made some money if the points were worth at least a penny. I’ve bought a ton of American Airlines miles for a penny. I’ve also generated a stash of Ultimate Rewards points just shy of a penny so I can redeem the points at Hyatt.
So here’s how to do it.
MyPoints is another portal where you collect their proprietary points. What you can do is redeem them for various gift cards, generally speaking the value of each point if you do that is less than $.007/point. However, MyPoints offers you the option to redeem for United miles. 1 MyPoints point is worth .42 United miles.
Now, for regular readers, you already know my modus operandi is gift card churning. And as luck would have it, MyPoints sells gift cards! Each gift card you purchase, will allow you to earn MyPoints points. Remember how I tell you to use a certain credit card to determine the MCC? If you do your homework, you will find out that MyPoints store is categorized as an electronics store. Guess what? US Bank Cash+ has a 5% cash back category for electronics! This is why I was happy that the Club Carlson card devalued. I was hemming and hawing if I should sign up for it, but after it devalued, I am going to try and sign up for another Cash+ card. This would open the opportunity for me to spend $4000/quarter. I’m looking at manufacturing at least 120,000 United Miles per year doing the 2 cards.
I’ve spelled out a lot of the tougher parts to buying cheaper United miles in this post, which I haven’t been doing lately. You’ll need to figure out which gift card exchange, Cardpool, Giftcard Zen, or Raise to sell on. In addition, you’ll also need to figure out which cards to buy. That piece will be the easiest, just do some value engineering and you’ll be able to figure out the average cost per mile.
I must be missing something huge. Best I can find is ~1.7c to purchase UA miles w/5% cashback. And MyPoints is limiting me to 2 cards per order, so volume is ridiculously low.
Paul, that’s where the secret sauce is. You’re almost there
Well, if you could email me the secret sauce, I’d appreciate it. I spent at least an hour looking at the economics and couldn’t see it.
I found three options that are the best, but even with the 5%, the low reselling % (around 80%) killed the deal.
You aren’t missing anything in regards to the volume. Unless you invest the time in making a macro or script, this is for small timers.
I’m missing something as well… best I saw was LLBean @77% which results in 1.7cents per United mile @5% cash back… no portal CB for Mypoints…
Exactly what I found. Buy $40 gc with 5% cb = $38 cost. Sell at 76% (couldn’t find 77%) = $30.40. Net cost = $7.60 for 1050 MyChoice points = 441 UA (@ 0.42 conversion) = 1.72cpp UA
After an hour and a half, I’m missing something too.
Gap Brands = $25 GC with 5% CB = $23.75 cost. Sell for 81% = $20.25.
Net cost = $3.50 for 500 MyChoice points = 210 UA = 1.67 cpp UA
Staples = $75 GC with 5% CB = $71.25 cost. Sell for 86% = $64.50.
Net cost = $6.75 for 900 MyChoice points = 378 UA = 1.79 cpp UA
I guess you could try to ‘upgrade’ your gift cards and buy other gift cards but seems risky to me!
If anyone figures this one out eventually, yell out “Bingo!” or something…
Based on the info provided, the numbers presented don’t match what is claimed – I think he’s forgotten to add in the cost of converting to UA miles…or else he’s found some sweetheart method of reselling…
I wouldn’t expect to get expert level advice here. The more I read the more I realize it’s the blind leading the blind.
Okay, guys, instead of working this from the perspective of trying to find the lowest cost per mile, I think it’s helpful to look at the math “backwards” on this and determine the resale rate you would need in order to generate a cost per mile of $.01. Bear with me here, because I don’t know how well this math is going to format.
Let p= cost per mile. Let o = out of pocket cost. Let u = United miles. Let v = face value of gift card. Let m = MyPoints. And let r = gift card resale percentage.
Price per mile is what you spend divided by the number of miles you get, so: p=o/u
Out of pocket cost is the face value of the card, less 5%, less what you resell it for, so: o=.95v-rv
And the number of miles you get is .42 of the number of MyPoints, so: u=.42m
Now substitute and remember that we want p=.01
Knowing that, you can plug in the known MyPoints rates for given gift card face values and determine the resale rate you would have to get in order to be buying your United miles for $.01. I’m not going to spill the whole table here, but Excel makes quick work of the numbers and here are a few examples that I’m pretty sure aren’t what we’re looking for … but are still good examples.
AMC = 92.71%
American Eagle = 86.18%
Applebee’s = 92.90%
I’m looking over the whole table, and nothing sticks out to me, but then I’m not familiar with all of the rates of all of the resellers … yet. 😉
I set up a spreadsheet with 3 inputs: face value, points earned, resale %…
Nothing approaches 0.8cpm.
The “secret” therefore must involve upgrading a lower resale % card like staples to a higher resale % card like chevron etc. meaning this is highly ymmv.
Besides I wouldn’t buy them for 1.0cpm when buying VGC is 0.7cpm.
Nice, Ed! I’ll send you the link to the spreadsheet that I’ve set up