2 worst ways to redeem loyalty and reward points

Most of the reward programs nowadays have many redemption options across different categories, but not all reward redemption options are created equal. Reward points don’t have a fixed value, and they are only worth what you can redeem them for. The key in getting truly rewarded is to find the best value per point, and to maximize that value based on the need.

Below are some examples of the worst ways to redeem points

Cash Back on Points Credit Cards

Although it might seem as the easiest and most appealing, it is not usually the best value, especially on non-cashback cards. Take Arabi points program from Arab Bank in Jordan for example. The general Arabi point value is 0.1 JD per point and can reach 0.17 JD per point when redeemed for a Cozmo Supermarket voucher for example. However when choosing to redeem for cashback, each 250 points are equivalent to just JD15, that is a mere 0.06 JD per point! 

For members looking to simply get cashback at the end of each billing cycle, stick to cash back cards such as Najm One card from Majed Al Futtaim, giving direct cashback of up to 10% on all Carrefour spend in the UAE. 

Catalogue Merchandise

Almost all major banks have a type of reward store for redemption, which is usually managed y third party vendors. It might be tempting to use the reward points for gadgets and the latest technology from the special setup branded store of an airline or bank, however always keep in mind the rates are far from good usually. For Royal Jordanian passengers collecting Royal Club Miles, buying an iPhone Xs 256 GB smartphone on the official Royal club rewards store costs 237,900 award miles, or 1,094 JOD + 500 award miles. The exact same phone on websites such as Ammancart.com sets you back only 739 JOD, that is almost a 40% difference in value! 

Sometimes there are special deals however or exclusive edition items on the reward program store that match or even beat market values, however members should always check the real item price and choose wisely. In many cases converting the points into a voucher and using that voucher to buy the item from a merchant would give a much better value per point, albeit  

When does bad redemption value make sense?

Very frequent flyers or high spenders who have hundreds of thousands of points are often not too concerned on the best value per point but rather the convenience, and often have more points than they can spend. Think about corporate travelers who regularly fly for work or book hotel stays often at the same franchise and those points collected are abundant. In this case less than optimal point value could be acceptable for that upgrade or exclusive item that isnt available in stores. 

On the other hand, if miles or points are about to expire, getting something is always better than nothing, and this is another case where redemption regardless of the point value is acceptable to many. Although more and more programs are becoming generous with the expiry of their points and miles, members should always keep an eye on the expiry dates and make sure redemptions are done well before so they are not squeezed for choices.