Ouch: Membership Rewards Devalues Transfer Ratio To British Airways

Whenever possible I do what I can to collect transferrable points currencies, given that they’re much more flexible and allow you to transfer points to any of a number of airline partners. One of my favorites is American Express Membership Rewards, which has well over a dozen airline transfer partners.

Amex-Membership-Rewards

Not only do Membership Rewards points afford you a lot more flexibility than just accruing a single, specific currency, but:

  • Many cards which accrue Membership Rewards points offer category bonuses, meaning you can often earn 2-3x points per dollar spent
  • Membership Rewards sometimes offers transfer bonuses, whereby you get some additional points when transferring points to a partner program

For the most part the transfer ratio is 1:1 when converting Membership Rewards points into airline miles. There are exceptions, for non-traditional programs, as explained in the Membership Rewards terms & conditions:

For most frequent customer programs, 1,000 Membership Rewards points will equal 1,000 miles, points or credits and must be transferred in 1,000-point increments unless otherwise noted. The only exceptions are:

  • JetBlue Airways: 250 points = 200 JetBlue TrueBlue® points; must be transferred in 250-point increments
  • El AL Israel Airlines: 1,000 points = 20 Matmid points
  • Starwood Preferred Guest®: 1,000 points = 333 Starpoints®
  • Hilton®: 1,000 points = 1,500 HHonors™ points
  • Virgin America: 200 points = 100 Elevate points; must be transferred in 200-point increments

However, it looks like we’re about to see a change to the above. As of October 1, 2015, Membership Rewards points will transfer to British Airways/Iberia Avios at a 250:200 ratio (or 1,000:800), rather than the current 1:1 ratio.

Executive-Club-Transfer-Rati

Travel With Grant received the following communication in his most recent American Express statement:

Effective October 1, 2015, when transferring points from Membership Rewards to British Airways and Iberia, the number of Avios you receive will change. From this date, for every 250 Membership Rewards points you transfer to the British Airways Executive Club and Iberia Plus programs, you will receive 200 Avios (the previous conversion rate was 1,000 Membership Rewards points for 1,000 Avios). As of October 1, 2015, you must transfer points to these loyalty programs in increments of 250.

Ouch! This stings especially since:

British-Airways-Avios-Bonus-1

What makes this especially interesting is that British Airways also partners with Chase Ultimate Rewards and Starwood Preferred Guest, where they also have a 1:1 transfer ratio. So it will be interesting to see if their ratios change as well.

Do keep in mind that British Airways’ co-branded credit card is issued by Chase, so it wouldn’t surprise me if Chase Ultimate Rewards’ transfer ratio remained 1:1. In theory it’s possible that Chase simply didn’t want American Express to have an equally lucrative transfer ratio to British Airways, though that’s just a theory.

Bottom line

Of course this is a negative change, and sets quite the precedent for a change from the traditional 1:1 transfer ratio we’re used to with transferrable points currencies.

This industry is just constantly changing, and when you really step back and look at it, you can’t help but laugh. Yes, programs keep getting devalued, but the opportunities to earn points keep increasing. Ultimately I’m convinced the long term purchasing power for those of us who are savvy is still on the rise, though on a day-to-day basis it can be hard to realize that.

What do you make of this change, and do you think this is the beginning of a trend?

Comments

  1. I literally just decided today that I was going to use BA to take my MR points…
    Well we’ll see I guess. Hopefully there’s one last transfer bonus before the ratio changes!

  2. Man oh Man! What else can they do to slaughter BA Avios? Its just one after another of horrible BAD News! What’s next? Revenue-based? Further mileage devaluation? Soon, BA will realize that they can’t be anymore generous…there goes AA 4500 miles redemptions! I can see it in the horizon. That’s ok though…I’ll keep getting their signup bonus every 2 years and stick it to ’em!

  3. Canadian MR still transfer 1:1. Honestly, double dipping is the way to go if you can make it work!

  4. I think this is Chase driven. Remember, BA & Chase just renewed their contract. This is likely a consequence of that.

  5. AMEX MR is such an also ran at this point vs. Chase UR. It’s not even close. Chase’s customer service and ability to resolve issues beats AMEX day-in day-out.

    AMEX SPG notwithstanding, AMEX has to figure out how to remain relevant to people not stuck in DL-only hubs like ATL, SLC, MSP, and DTW.

  6. ** Ultimately I’m convinced the long term purchasing power for those of us who are savvy is still on the ride **

    huh?

  7. To me, it is clear that this is Chase’s continuing battle to boast their offerings and diminish AMEX’s. Can’t say I blame them. Chase has better customer service and I believe they also have a better long-term strategy. The only innovative thing AMEX has done in recent years is opening some lounges.

  8. Hey Lucky,
    I know this is irrelevant to this post but I just wanted you to know that Alitalia just rolled out a brand new livery. Waiting for your take on it,though there aren’t much changes 🙂

  9. Doesn’t appear to have happened to UK yet, however our earning rate of MR is only .66 of your as its 1 point per £ rather than per $…

  10. @ Steven S — AMEX Sync offers keep me a member, but yes, Chase has really stepped up its game in these last few years.

  11. this change kicks in sometime in the fall, correct? So we have some months to make transfer at the old ratio. The new BA award chart is so terrible (and with high fuel surcharges) that I’m not sure one should even still bother with this program.

  12. Make no mistake — this is a devaluation of British Airways as well. If you can’t earn miles easily with them, then it’s hard to justify crediting flights to them.

  13. On top of the stuff already mentioned, not a big fan of BA 1) charging J class passengers w/ out status to choose a seat, 2) their step-over-each other, I mean business class seats, 3) ridiculous surcharges/fees on award tickets, etc. They do have good award availability though…

    90% of my award travel is from NYC to NRT, so I love the 85k and 95k J class ANA seats and ANAs overall service, so MR points are still my favorite.

  14. Could it have anything to do with the fact that it’s theoretically easier to earn MR points that UR points? If you’re using PRG and Everyday Preferred to their max potential, in most spending scenarios, you’ll earn more MR points than UR points using Sapphire/Freedom, even if you max out the Freedom bonuses. (The only way I can think of that the Chase scenario would earn more points is if you spend most of your money on hotels that aren’t bookable via Amex travel and eat at restaurants significantly more often than you shop for groceries.) Plus, the Everyday cards are fairly new (and open full MR up to a much wider customer base), and the PRG changes are just now being rolled out, so maybe BA feared a wave of people cashing in points at much higher rates than they anticipated when they first offered the 1:1 transfer to MR customers.

  15. This + the new award chart = me flying a lot less BA to/from Europe, which is a little sad because I have had great luck with last-minute F awards. But, in addition to an F product that feels like little more than a really good J product, I’ve felt for some time like it’s better to just fly KL/AF J for US>EU>US flights and save the MR points.

  16. Still seems extremely generous to me! By comparison in the UK we only earn at 1 MR per GBP, have to pay forex fees, almost never have transfer bonuses and in the main are stuck with BA if looking to be able to earn meaningful numbers of points!

  17. “Many cards which accrue Membership Rewards points offer category bonuses, meaning you can often earn 2-3x points per dollar spent.”

    REALLY??

    There is the Gold Preferred Rewards Card that earns a category bonus on airfare and gas and I think supermarkets and then there is the Everyday cards in either iteration that earns for Grocery @ 2 points per $ (capped @ $6,000.00/year) or if you put 30 more transactions on the Everyday Preferred, you get a general bonus.

    So, 2 card or at most 3 cards constitutes MANY??????????????

    And, for what???

    What truly are MR points good for any more anyway?

    Not Delta, with the withdrawal of now you see me, now you don’t award charts.

    Not HHonors with the let’s devalue to the point that a 1 night stay could run you almost 100,000 points..

    So, you are left with Air Canada, and having to make a stop-over vs. some perceived miles savings and of course, the possibility of your flight being socked with fuel surcharges.

    Or, the Asian carriers some of which have a mandatory expiration of their points after a certain time-frame.

    Well, what works for some globe hoppers unencumbered with a 9 – 8 job and potential family responsibilities, that may be all well and good, but just tell me where the value is in MR points now that the best of the US based market leaders have been poached by Chase and Citi, respectively?

    Aside from your links for selling AMEX cards, what is the benefit to the average Joe here in the USA getting an AMEX MR card, even if but a few of them, not many, will give bonused spend on some, but certainly not many items — unlike the Chase UR or Cit Thank You card offerings.

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