Buying Virgin America Elevate points — the worst deal ever?

I received an email from Virgin America this evening offering a 20% bonus on purchased Elevate points through May 2. I haven’t looked at the Elevate earning/burning scheme in at least a year, though I recalled that you earned points for flying based on the price of the ticket, and that redemptions were also directly tied to the cost of a ticket, unlike the legacies, which award miles based on the number of miles flown, and also have fixed award costs (saver and standard awards, for example).

So I was curious, how much can an airline really sell points for, if redemption is based on the cost of the ticket?

While buying miles is almost never a good deal, there are some cases where it can make sense, even at the “normal” cost. For example, American sells miles directly for 2.75 cents without any sort of a promotion. For most of us that’s not a good deal, though at that rate an international business class ticket to Asia, for example, would only run you $2,750. In other words, there is the potential for savings.

I was shocked to go to Virgin America’s website, only to find that their usual sale price is 5.2 cents per point. Now, I could be wrong, but by my math, there’s absolutely no way to get more than 2.5 cents of value out of a Virgin America Elevate point, no matter how creative your math is. Furthermore, by buying points towards an award ticket, you’re missing out on the points you would earn from booking a revenue ticket.

Anyway, I’m not trying to single out Virgin America here, because in most cases buying miles or points at the “normal” price is a rip off. However, there’s always that hypothetical situation where it could make sense. In the case of Virgin America, though, I’m drawing a total blank. Perhaps if you’re a few points short (and even then it’s questionable), though that’s about it.

Even worse, the cost of transferring points between accounts is two cents per point. Given that you can at most get 2.5 cents of value out of an Elevate point, I really don’t see the point there either.

Virgin America should consider cutting the cost of purchased and transferred points in half, and they might have some crazy people bite while still making a killing.

Just a quick observation…

Comments

  1. I’d guess the primary scenario for most of the general public is when you’re almost at a reward and new a handful more miles to get it.

  2. Yah when you buy the rev tickit you get miles and thats allways fun cant wait till out of high school ABQ-DEN ever week end that would be fun!

  3. Lucky, you seem to be quite the analytical person. I am sure the airlines hate to see you coming because I am sure that you obviously have the mind for numbers that is going to enable you to squeak every dollar you can out of the airlines. Great going. I want you on my side when I am purchasing a ticket. Interesting read. Thanks.
    Jeremiah

  4. Yeah I recently crunched the numbers when they were offering up to 100% free points when you buy points (buy 500 and get 500 free). Even at this rate it is still just cheaper to buy the ticket. For example, a $49 dollar ticket cost you 2,279 points. If you buy the points it will cost you $52 for only 2,000 points. This is all at the promotional 100% free level. It really should be the same value across the board.

  5. I bought points without knowing all of this. I got 45 cents worth of points for every dollar I spent. Even with the 2 for 1 promo that Brian mentioned you get 90 cents on the dollar.
    In plain numbers, without promo, if you want to buy a $400 flight, you need to buy $1000 worth of points.

    I was “legally” robbed.

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