It’s a Bonus Sale of up to 100%, Which is United’s Best Sale of the Year! It Must be a Good Deal - Or is it?
Expiration Date – December 18, 2015
United Airlines is offering a mystery bonus of up to 100% to buy or gift miles by December 18, 2015. Since this is a targeted offer the allowable purchase amounts and tiers to get up to a 100% bonus may vary. But even with a bonus this big, buying miles doesn’t usually make sense.
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 a 100% bonus. Miles are available in increments of 2,000 all the way up to 75,000 for most before the bonus is applied. You can add up to a total of 150,000 miles annually.
Without a sale MileagePlus miles cost 3.76 cents per mile to buy (which is inclusive of a 7.5% excise tax).
The deal I was given awards a 50% bonus for purchases of 10,000-29,000 miles at a cost of 2.50 cents per mile and a 100% bonus for purchases from 30,000-75,000 miles at a cost of 1.88 cents per mile. And if I purchase the maximum amount of 75,000 miles during this sale I will receive a total of 150,000 miles.
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 with a 100% bonus, equating to 1.88 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 25% discount to transfer miles until December 30, 2015, but transferring miles never makes good financial sense.
The price to transfer a mile is normally 1.5 cents per mile plus a $30 fee per transaction. And if you transfer miles during this sale, the cost will range between 1.2 cents per mile for 25,000 miles and a whopping 7.1 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 big bonus. 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.
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