Hypothetical - $ Value of Freq Flyer Points

endolphin on 25/04/2020 - 22:38

Lots of talk about the value of points of late and it got me thinking.

Let me propose the following hypothetical situation…

You've got 400k frequent flyer (ff) points (non brand specific) and you are planning a month-long holiday in Europe.
Flights with a decent airline to Europe return in business are $7,000 or 360k ff points (for simplicity assume no $ taxes payable on top), or in economy they are $1,500. Your (not particularly close) brother-in-law also happens to be planning his own Europe trip for later in the year and asks if you would be willing to book a business flight for him, for a price.

What offer price would you need to give up your business seat and take the offer? Poll options below

E.g. if he offers 1.0c per point that equals $3,600 direct debited to you, and therefore $2,100 left in your pocket after buying the economy flight for yourself.

I reckon this is one way of working out the value that one person assigns to their points, which could then be helpful to compare against what someone would be willing to spend to acquire points.

Poll Options expired

  • 1
    0.5c per pt. E.g. same value as gift cards. You're the most generous bro ever ($300 net gain)
  • 0
    0.8c per pt. Hey, better than gift cards! ($1,380 net gain)
  • 5
    1.0c per pt. Can put up with economy and enjoy the extra money ($2,100 net gain)
  • 2
    1.5c per pt. Really don’t want to give up biz but can’t say no to the cash ($3,900 net gain)
  • 4
    1.9c per pt. Same cost to your bro-in-law but if willing then you can’t refuse $5,340 net gain
  • 13
    No deal sorry bro. You value your pts at 2.0c+ & you’ll be flying business
Travel

Comments

  • Tony-Abbott on 25/04/2020 - 23:00

    None - it's what ever the person values them at. It's subjective. Value them at what you want.

    • endolphin on 25/04/2020 - 23:14

      You do realise that I agree that it's completely subjective and that is why there is a poll?

      • Tony-Abbott on 25/04/2020 - 23:25
        -1

        Right.. Just go to a frequent flyer forum then, they are the ones with experience.

  • 87percent on 25/04/2020 - 23:04
    +9

    Doesn’t sound very hypothetical

    • endolphin on 25/04/2020 - 23:17

      Haha I can see that it seemss like that but trust me it is hypothetical. I'm just imaginative I guess.

  • DingoBilly on 26/04/2020 - 00:28

    Points are sold for 1c each so seems reasonable to value same, esp. For friend/family.

    2c+ is a joke, dunno what those people are smoking.

    • MrHyde on 26/04/2020 - 07:14

      Can easily get points to be values at more than 2c each.

      I took the family on a around the world trip 2 years ago in business class for 1.2 million points. The cost of the trip if booked with cash came to about $40k for a family of 4. That's about 3.3 cents per point.

      I do believe it would have cost a lot more than 40k, that's a low end estimate.

      • endolphin on 26/04/2020 - 07:36

        Would you have ever saved up and actually spent $40k on that if points didn't exist?

        • MrHyde on 26/04/2020 - 07:47

          Never. I wouldn't even have done round the world in economy if I had to pay with my own cash. But we've now done it 3 times, so points are definitely worth it.

          • endolphin on 26/04/2020 - 08:54
            +1

            @MrHyde: You see what I'm getting at though? What were those flights worth, to you? Obviously not $40k because you wouldn't pay that. So it doesn't make sense to value your points using that cash price.

            What if someone came along and offered, say, $30k cash for your 1.2 million points?

            • MrHyde on 26/04/2020 - 10:10

              @endolphin: Thats a difficult thing. If someone offered me $30k; I would not sell knowing that I could use them to take the family on a holiday instead. However, if someone offered me $50K; I would see knowing that I could use the $40k to go on a holiday and still have $10k left over.

              See; if I did not have the points to begin with; I would not spend $40K to get the points as I won't think of that as a valuable use of my money - but if someone else were to give me that money; I'll take it. I would probably spend only $10K of my money to get the points. Perspective on whose money it is changes things. :)

  • Meho2026 on 26/04/2020 - 04:17
    +2

    What happens if the bro-in-law gets bumped at the gate and put in economy for one of the legs?
    It can happen.

  • capslock on 26/04/2020 - 13:45

    I've used my points to buy flights for my family before including a not so close brother in law and didn't charge them for the points. I figured they will return the favour some day.

    • endolphin on 26/04/2020 - 14:38

      Can you elaborate on the circumstance? I find those situations interesting. I have seen examples where people are far more generous with giving away points, than they would be about giving away money. I find it a bit odd.

      For me, there is no difference. My decision making is exactly the same if I am considering lending/giving away 100k points or $1000 (and I have both accepted and declined these sort of situations in the past).

  • Jules855 on 27/04/2020 - 10:46

    I value my points based on the maximum value I can get out of them. For our honeymoon we used 560k QFF points to go around the world in business class. We maxed out the distance and stops so the flight value had we paid cash was almost 80k.
    I regularly pay cash for flights despite having over a million QFF points so the offer to buy my points would have to be incredibly high to sell them.
    With Velocity points I value them less as international business class seats are near impossible to find. I have used them for domestic flights (often buying a domestic fair and using points to upgrade if I can get lie flat seats between Perth and over East destinations) and gifted to friends and family on occasion.

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