Posted by: pizzainmotion | April 18, 2013

Are You Earning 5 Points Per Dollar For Your Southwest Flights?

Don’t forget to enter my giveaways for a Bubble Bum and 5,000 Ultimate Rewards points.

I spend a good deal of time trying to help people I know earn more points on their everyday purchases. Maximizing those recurring purchases is the biggest source of collecting miles and points for the largest part of the population that don’t travel as a part of their professional lives.

The easy items come from making sure you’re using the right credit card, since so many cards include category bonuses. Why earn 1 mile per dollar when you buy gas when you could earn 2 or 3? Same thing with your cell phone bill (5 points per dollar on Ink Bold).

Just make sure you don’t overlook an easy way to earn 5 points per dollar when you take the family on that next flight on Southwest. How? Pretty straight forward.

Chances are, your local Staples or Office Max carry Southwest gift cards. To my knowledge, Office Depot doesn’t. I’ve seen both $50 and $100 cards. Buy those cards with your Ink Bold card and you’re well on your way to 5 points per dollar when you use your Ink Bold card.

DSC00441

While the process to pay with a gift card on the Southwest website is pretty straight forward, there are a couple of thoughts to consider:

  • The Southwest website only allows you to have 4 total methods of payment. Take this into account when you’re planning a trip and buying gift cards. If your ticket is only $200, no problem using those $50 gift cards. Over that amount and you’ll need some $100 ones.
  • If your total cost is over $400 (4 $100 gift cards), you can really only use 3 gift cards, since your fourth method of payment will need to be the credit card that pays the remainder of your balance.
  • If you’re looking to maximize your entire larger purchase of Southwest travel at 5 points per dollar, you might consider booking your round-trip ticket as two one-way trips. You could also split up the passengers on different records, though this is not the most advantageous in case of a delay or schedule change during travel.

Finally, if you’re looking to give someone a birthday or Christmas gift, consider giving them the gift of travel in the form of Southwest gift card, and give yourself the gift of extra miles.

Note: None of these are referral links for me. Ink Bold is just one of my favorite cards.


Responses

  1. Southwest’s “no change fees” policy makes it reasonably straightforward to apply larger amounts from even smaller denomination gift cards to expensive flights. Straightforward, but whether your readers are willing to go to the extra effort is up to them. I find it worthwhile, especially since I go through a similar process to re-use ticketless travel funds from previously canceled or changed travel. Others may reasonably disagree with me as to whether they’re willing to do this. I will say that the description of the process is longer than carrying it out.

    Suppose you only have access to $50 gift cards, and you want to buy travel that costs $500 round trip and $250 each way. (Now, for some routes and date/times, that may be the best available fare from any airline. Southwest may not ALWAYS be the lowest fare on a given route and date/time, but the recent study that showed they were lowest for 40% of studied combinations is pretty darn good since the flip side is that all other major airlines combined only managed to be lowest 60% of the time; and that study wasn’t counting checked baggage fees, which could have helped Southwest be the lowest on even more than 40%.)

    First step: mentally prepare to buy two one-way tickets instead of a single round-trip ticket. Southwest rarely requires the purchase of a round-trip ticket to get their best pricing. In recent years, I can only think of the occasional round-trip discount code that made round-trip purchase better than two one-way ticket purchases.

    Second step: Use the maximum of four $50 gift cards to buy a temporary ticket that you have no intentions of flying. Your objective is to get as close to $200 as possible while still staying under. It doesn’t matter if this temporary ticket is a one-way or a round trip. Usually I find that buying a one-way Anytime ticket is simplest. The price of that ticket is essentially always the same on any given route, so the trick is to look through routes until you find one where the Anytime ticket is the amount that you want. I also often look for routes where Southwest essentially runs a shuttle service (hourly or nearly hourly), so the supply of seats is very large, and try to buy something very far in advance so that my machinations have the least perturbation on the actual supply of Southwest tickets for other buyers.

    Third step: Cancel the temporary ticket. There is no change fee, so you have the entire amount of the ticket to be re-used.

    Fourth step: Buy the ticket you actually want to travel on. You will first apply the ticketless travel fund left on the previously canceled ticket, then add the remaining gift cards. You’ll also allowed to use a credit card for any additional collection still needed. You don’t earn the 5x points for this additional collection, so you want to avoid this as much as possible.

    Just a single cycle through this process starting with only $50 gift cards actually allows you to buy a $400 ticket earning 5x Chase UR points on the gift cards and spending nothing on a credit card directly with Southwest. If you get to exactly $200 on the temporary ticket in step two, then in step four you get to use the wholly unused ticket worth $200 PLUS another four gift cards each $50.

    I go through this process often because it fits into my overall strategy for non-work travel:
    (a) As soon as I know of reasonably likely potential travel, I start looking for good airfares for the destination/date/times.
    (b) As soon as I see a vaguely reasonable airfare on Southwest, I purchase it. I now have a ceiling as to the maximum that I could possibly need to pay.
    (c) I continue looking for better fares. If I see a better fare on Southwest, with no change fees I am able to re-price the ticket I purchase in (b) and lock in the new lower maximum fare.
    (d) If I see a good fare on United, my preferred carrier, I have a more nuanced decision to make. First, the elite qualifying miles on United are worth something in and of themselves, so I’m prepared to pay more to fly on United than on Southwest. Once I make that adjustment to the United price, I then look at the likelihood of whether there will be an even better fare in the future. The issue is that once I buy the United fare, United’s typical $150 change fee restricts me from being able to benefit fully from any additional fare drops in the future.
    (e) If the elite-qualifying-miles-adjusted United price is sufficient low, then I do buy the United ticket, and cancel my Southwest ticket entirely, getting the entire amount spent on it for future re-use.

    Overall, this lets me lock in a pretty reasonable fare, and then play the waiting game of hoping that my preferred carrier United will offer a great fare in the final weeks before my travel.

    • PH, absolutely brilliant. Never thought about the credits. Going to revise the post later with some of this.

      • Better write fast, United just updated their standard domestic non-refundable ticket change fee from $150 to $200. 😦

  2. I have also seen Southwest gift cards at CVS and at the grocery store.

    • Carla, some cards pay bonuses on drugstore and grocery purchases, but the 5X on office supplies is the best value I know of currently for acquiring these gift cards from a brick and mortar stores.

  3. While I use this technique, there is a potential drawback. Once the gift cards are used for a ticket, the credit on that ticket expires in a year if you cancel.

    • Peter, you’re right. But, Southwest doesn’t charge a change fee like other airlines(who also only give you a year to use up old credit), so you do get the complete value of that canceled ticket to reuse for a year. Definitely not something I would stockpile, but easy enough to use this method on a planned reservation without much risk.

      • Lifetime, I’ve probably spent >$10,000 on Southwest tickets in new funds (either directly via credit card with Southwest or through gift cards per this technique), and have lost a total of approx. $200 due to expiration, less than a single instance of United’s new default domestic change fee. This is possible because of careful tracking and careful re-use of existing ticketless travel funds instead of adding new money. By careful re-use I mean two things: (1) I use ticketless travel funds which are close to expiration on travel that I’m reasonably certain will really be on Southwest, so as to use them up; (2) when you combine multiple ticketless travel funds or add new money, the resulting expiration date is the soonest expiration date, so you want to be careful to minimize tainting of fresh money (with no expiration date) by old funds (with soonest expiration date). Lastly, Southwest lets you revive ticketless travel funds that have expired by paying a $75 fee (recently increased from the $50 it had been for years) from the existing balance, for which you get back 6 months of usability.

        • PH, I didn’t know you could revive expired travel credits. That’s a great tip!

      • Yep. The expiration isn’t a problem; just something to be aware of so that you start your tracking when you cancel and things don’t get lost or forgotten.

        One other wrinkle to add is that I buy the Southwest gift cards through the Staples website and get an extra 2-5% by going through a shopping portal. Also, Staples.com offers up to a $500 card with electronic delivery so it doesn’t matter where the nearest store is and you don’t have to bother combining $50 cards.

        • Peter, I’ve never been wild about buying gift cards online, but electronic delivery is very enticing to me.


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