It’s a Bonus Sale! It Must be a Good Deal - Or is it?
Expiration Date – October 23, 2015
United Airlines is offering up to a 80% bonus to buy or gift miles until October 23, 2015. While 80% is one of the highest bonuses we’ve seen, buying miles to keep or gift doesn’t usually make sense. Here’s why...
United MileagePlus bonuses are generally offered based on tiered purchase levels and this sale is no different. The more you buy, the larger the bonus - up to 80%. Miles are available in increments of 2,000 all the way up to 80,000 miles. You can purchase up to 150,000 MileagePlus miles in a calendar year including bonuses.
During this sale you will enjoy these bonuses:
15% bonus on 5,000-25,000 miles (3.27 cents per mile)
35% bonus on 26,000-29,000 miles (2.79 cents per mile)
80% bonus on 30,000-80,000 miles (2.09 cents per mile)
Without a sale MileagePlus miles cost 3.76 cents per mile to buy.
As you know from prior TRVLVIP Perks and Tips, we believe the value of a United MileagePlus mile is 1.5 cents per mile, which is the value we would be willing to pay for MileagePlus miles if we could buy them for cash. It is also the minimum value we feel you should expect before redeeming your miles.
So even if you buy 30,000-80,000 miles with a 80% bonus, equating to 2.09 cents per mile, you will pay well above what we believe MileagePlus miles are worth at 1.5 cents per mile.
Does it ever make good financial sense to buy or gift MileagePlus miles? Maybe – but typically only in these scenarios:
You plan to purchase miles in order to secure a specific award flight during a discounted award promotion
“Saver Award” space is available (vs. a “Standard Award” which generally requires more than twice the number of MileagePlus miles)
You plan to secure a Business or First-Class award ticket
Here is a quick calculation you can use to determine deal value:
Find an award ticket
Determine the full price of that ticket if you were to pay cash, including all taxes and fees
Add to that amount any taxes and fees you will be required to pay on the award ticket
Divide that amount by the number of miles required
If the value per mile exceeds the amount you have to pay to buy the miles then you’ve found a good deal and if not, we don’t suggest you buy the miles
Remember, purchased miles will not count toward MileagePlus elite qualification.
United is also offering a 20% discount to transfer miles until October 26, 2015, but transferring miles never makes good financial sense. The price to transfer a mile is 1.5 cents per mile plus a $30 fee per transaction. So if you transfer miles, the cost will range between 1.6 cents per mile for 25,000 miles and a whopping 7.5 cents per mile for 500 miles. And because you’re simply transferring existing miles instead of buying new ones, you have to factor in the value of the transferred miles (at least 1.5 cents per mile). This makes it a very expensive transaction at any purchase level.
It rarely makes sense to buy or gift miles speculatively as it is an expensive way to acquire miles even with a discount. Once you’ve picked a location and your dates and have taken the steps to ensure award availability, make the small effort to crunch the numbers to make sure the mile purchase makes good economic sense - you will be very happy you did! Click here for United’s award charts, to review award availability and to book award travel.
A great alternative to transferring miles or purchasing miles to gift to another person is to book them an award ticket using your miles. That is a much more economical choice.
Want to look a bit deeper into the option to purchase, gift or share miles with or without a bonus offer and the opportunity to acquire miles using the United MileagePlus Award Accelerator when purchasing a flight? See our great tip: United - Pros & Cons of Buying and Gifting Miles.
If TRVLVIP helped you gain a better understanding about buying United MileagePlus miles on sale, we’d love a nice note on Facebook and Twitter!
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