FLASH SALE - Enjoy up to 100% More MileagePlus Miles! It’s a Sale! It Must be a Good Deal - Or is It?
Expiration Date – April 25, 2016
United Airlines is offering up to a 100% bonus to buy or gift miles until April 25, 2016. And the offers vary by member. My offer was only for up to an 80% bonus. If you were offered a 100% bonus, that is the largest bonus United offers. But even with a bonus that big, buying miles to keep or gift doesn’t usually make sense.
United MileagePlus discounts and bonuses are typically offered based on tiered purchase levels, where the more you buy, the larger the discount. And you have the option to buy 2,000 all the way up to 80,000 miles. You can purchase up to 150,000 miles each year.
Here is the offer I received:
Without a sale, MileagePlus miles cost 3.76 cents per mile to buy (which includes a 7.5% tax for US residents).
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.
Even if you buy at least 20,000 miles with an 80% bonus, you’ll pay cents 2.1 cents per mile. And if you received an offer for a 100% bonus and purchase 20,000 miles, you will pay 1.88 cents per mile. Both prices are 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.
And Sharing miles never makes good financial sense:
The price to transfer a mile is 1.5 cents per mile plus a $30 fee per transaction without a sale. And even with a 35% off sale transferring miles never makes good economic sense! To transfer 500 miles you will pay close to 7 cents per mile and to transfer 25,000 miles you will pay 1.1.cents. 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 bonus or 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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