I seem to be one of the only people who believes that Ultimate Rewards points don’t deserve a premium value for their flexibility. Don’t get me wrong, I think they are worth at least as much as United’s miles, which is usually the most valuable transfer option. But I’m not willing to say they are worth anything more than that.
Food Wine and Miles gave me a good idea for how to test this reasoning in the comments of my post yesterday. If I were given a choice between 1,000 Ultimate Rewards points or 1,000 United Airlines miles, which would I choose?
The Ultimate Rewards points, of course! They’re as good as United miles, and they have some flexibility.
But what if I were offered more United miles? How many more miles would it take before I chose United’s miles over Ultimate Rewards points?
My answer was 1,001. Any number of miles more than Ultimate Rewards points was good enough for me. I may think Ultimate Rewards points are better, but I don’t think they’re so much more valuable that I would prefer to give up United miles in exchange for fewer Ultimate Rewards points — one of the most fundamental ways to demonstrate superior value.
An equivalent question to the one posed by FW&M is to ask how many miles you would trade for a fixed number of Ultimate Rewards points.
If I you were to say that United’s miles are worth 1.5 cents and Ultimate Rewards points are worth 1.6 cents, then that means you would be willing to give me 10,000 miles if I gave you 9,375 points. Come on, we could both be happy! You can call me an idiot and take my Ultimate Rewards points, and I’ll laugh while I rake in the extra miles.
So in the interest of some lighthearted fun, I encourage you to answer the poll below or in the sidebar. What’s the MOST number of miles you would exchange for 1,000 Ultimate Rewards points and their flexible transfer rules? An equal 1,000 (no premium)? Just 1,001 (a symbolic extra mile to get the flexibility of UR points)? 1,300? More than 1,500? Remember, I am interested in your upper limit. Nearly everyone would like to trade miles in reverse to get the same number of UR points. What if you had to pay a premium in the process?
I think it will be an interesting experiment to see just how much people are willing to give up in exchange for “more valuable” Ultimate Rewards points.