Southwest has mildly devalued its Rapid Rewards points by about 3%. What’s alarming isn’t the size of the devaluation, it’s that:
- Southwest gave no notice, only some sleuthing by FlyerTalkers sussed it out
- This is the third devaluation in third years, something which is completely unnecessary for a revenue-based program like Southwest
Southwest points used to be redeemable for any “Wanna Get Away?” fare at a rate of 60 points per dollar of the fare. Wanna Get Away fares are available on almost every flight until a few weeks before departure.
Let’s say you found a $300 base fare, it would be 18,000 Rapid Rewards + $5.60 per direction in taxes for a domestic award (and higher taxes for an international award.)
In March 2014, that rate was changed to 70 points per dollar, a massive 17% devaluation.
That same $300 base fare would be 21,000 Rapid Rewards plus taxes.
In April 2015, Southwest went away from 70 points per dollar on all Wanna Get Away fares to 70 points per dollar only on the cheapest five fare classes of Wanna Get Away fares, and up to 80 points per dollar–a 14% devaluation–on the five more expensive fare classes.
That same $300 base fare would hopefully still be 21,000 Rapid Rewards, although it could be up to 24,000, plus taxes.
These changes were announced with six and two months notice, respectively.
The most recent devaluation was never announced. The change is that the five fare classes of Wanna Get Away fare that were 70 points per dollar are now 72 points per dollar, which is now the best rate you can get for your Rapid Rewards.
That same $300 base fare would be at least 21,600 Rapid Rewards plus taxes.
That’s only a 2.9% percent devaluation, so I’m much more upset by the complete lack of notice.
In fact, the only reason we know about the last devaluation is because this FlyerTalk thread tracks what number of points people are asked to pay in exchange for what base fare and fare class.
Southwest Delta-ed Us
I noticed at the time of the April 2015 devaluation that Southwest was backing away from a fixed value per point model. Southwest said:
Beginning April 17, 2015, the number of Rapid Rewards Points needed to redeem for certain flights will vary based on destination, time, day of travel, demand, fare class, and other factors. However, there are still many flights which will stay at the current redemption rate.
And I wrote:
Whoa, whoa, whoa! That eviscerates the entire nature of Rapid Rewards. Rapid Rewards redemptions currently vary based on two factors: price of the ticket and which fare class you choose (until a few days before departure “Wanna Get Away” fares are available on 99% of flights, so this second factor is rarely important.)
But what I failed to grasp is that by backing away from a specific number, Southwest no longer had to announce devaluations because they can argue this isn’t a devaluation. They said awards costs what they cost and awards still cost what they cost. Basically Southwest “Delta-ed” Us.
Not announcing devaluations because you weaseled out of what saying awards should cost is called “Delta-ing” because Delta deleted its award chart from its website, said awards cost whatever the website says they cost (while still programming the website to use the old award chart to price awards), and then increased the price of many awards without notice.
Doesn’t the answer to “How many points per dollar does it cost to redeem for a ticket?” on southwest.com look like something Delta would write:
The number of points needed for a reward flight depends on the fare. Just like fares, reward pricing can vary based on destination, time, day of travel, demand, fare class, point redemption rate, and other factors and is subject to change. The same Rapid Rewards rules and regulations that apply to domestic flights will apply to international flights. Please be aware that rewards travel is subject to taxes, fees, and other government or airport-imposed charges from $5.60 per one-way trip that must be paid by the Member. Applicable taxes, fees, and other government or airport-imposed charges can vary significantly based on your arrival and departure destination.
And because Southwest doesn’t say 70 points per dollar there, they think they don’t have to tell us that the new minimum is 72 points per dollar.
No Notice is Unethical
Major devaluations stink more, so I am happy Southwest’s is less than 3%. (Let’s call the Aeroplan way of small yearly devaluations with a few months notice the ideal. I’d rather 3% devaluations a year for five years than a sudden 16% devaluation.)
No-notice devaluations stink the most.
They are plainly unethical. They imply that nothing has changed with your points when something has changed–they’ve gotten less valuable–and offer no chance to use the points quickly under the old rules.
They also sully trust between members of a frequent flyer program and the airline. Alaska was so embarrassed by its no-notice Emirates devaluation that it offered explanations after the fact, promised not to devalue again without notice, and refunded people who had recently purchased Alaska miles.
How to Fight Back
Alaska’s response didn’t happen spontaneously. It happened because hundreds of people got in touch with Alaska to complain by retweeting on Twitter.
Let’s have at it again. Retweet this tweet if you think no-notice devaluations are scammy.
— MileValue (@MileValue) May 19, 2016
I can’t imagine Southwest walking this change back, but I hope they will commit to no more no-notice devaluations.
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Earn 50,000 bonus points (worth $800 in American Airlines flights) after spending $3,000 in the first three months on the Citi Prestige® Card. Plus get a $250 Air Travel Credit each calendar year, free airport lounge access worldwide, and your fourth night free on hotel stays. Why I got the card.