I Learned Something New About Buying Starpoints

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Starwood has become more active lately when it comes to selling Starpoints. In the past they’d sell Starpoints at a discount a couple of times a year, while lately they seem to be selling them at a discount every couple of months, and in many cases the discounts are even bigger than before.

As I wrote about a couple of days ago, Starwood is offering up to a 30% discount on the purchase of Starpoints through July 1, 2016.


That’s the biggest non-targeted bonus we’ve ever seen them offer (last month they offered a 35% discount for those with the Starwood Preferred Guest® Credit Card from American Express or Starwood Preferred Guest® Business Credit Card from American Express, which was the absolute biggest we’ve ever seen).

Starwood processes their points purchases through points.com, as is the case with many loyalty programs which sell points. Points.com provides the back-end technology and support, and presumably they take a cut on the sale as well (for that matter, points.com does a lot more than facilitate the sale of points).


The reason that’s worth knowing is because generally making a purchase through points.com doesn’t qualify as airline or hotel spend, since it’s being processed by a third party. Their merchant category isn’t for an airline or hotel, but rather for online services.

In other words, when you buy Alaska Airlines miles through points.com, you don’t earn triple points on airfare for using the Citi Prestige® Card or Premier Rewards Gold Card from American Express, because it’s not actually an airline processing the purchase.

So when people have tried to purchase Starpoints, I’ve always recommended using a card which maximizes your return on everyday spend, since points.com doesn’t qualify for any major bonus category. As luck would have it, Starwood’s co-branded credit cards are among the best for everyday, non-bonused spend anyway.

However, what I hadn’t realized until now (thanks to the readers who made me aware) is that you earn double Starpoints on your credit card spend when purchasing Starpoints with the SPG Personal Amex or SPG Business Amex.

I value Starpoints at ~2.2 cents each, so to me earning double Starpoints on the purchase of Starpoints represents a return of ~4.4% on those purchases.

The next thing I need to test out is if you earn double points on all points.com purchases using the SPG Personal Amex or SPG Business Amex, or if they somehow have it specially coded so it only earns bonus points on the purchase of Starpoints…

The moral of the story is that if you’re going to buy Starpoints, use your co-branded Starwood credit card!

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  1. Do we think purchasing points falls into the $3000 dollars of “eligible purchases” category for receiving the 25k sign up bonus?

  2. Lucky, do you know if transferring SPG points to my temporary Lufthansa account qualifies as “earning at least 1 mile” for the purposes of receiving the permanent card, booking award flights, etc?

  3. BAD DEAL? (other than transferring and purchasing international business-class flights). At lest for SPG hotel redemptions, this still seems like a pretty poor deal. Even at 2x points, this only brings the purchase price down to 2.33 cents per point. (E.g., $245 for 10,000 points, at 2x points for spend that’s 245/10490=0.02335…) The average SPG hotel redemption is not over $.0233 per point (though there are some). The BETTER deal seems to be to pay cash for the hotel and get 4x to 5x SPG points for the spend. You’d spend less and get more points.

  4. @Mike: ANY mileage earning triggers the shipment of a physical Miles & More card.
    Question: why is it important to you to have the physical card and to be able to book awards if you haven’t collected a single mile yet?

  5. @David, to be able to transfer SPG points to LH to book F seats in advance for better trip planning. Unlikely given the value of SPG points but I’d like to at least have that ability if needed.

  6. I never understand why the opportunity cost of an award redemption (i.e. no stay credit, no point earning) is never factored into the equation of whether it’s a better deal to buy points -> redeem for award stay vs. paying.

  7. Hi Lucky, Do you have more details or information on pricing models of Points.com
    They seem to have a monopoly when it comes to Back-end Technology for Loyalty Points.
    How much is the mark up done by Points for any particular Airline?
    I am sure Airlines are ready to sell miles at a different price to different user but probably points.com is making them expensive. What do you think? Any other company doing similar stuff like Points.com?

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