Southwest Rapid Rewards Devaluation Again! This Time No Notice

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Southwest has mildly devalued its Rapid Rewards points by about 3%. What’s alarming isn’t the size of the devaluation, it’s that:

  1. Southwest gave no notice, only some sleuthing by FlyerTalkers sussed it out
  2. This is the third devaluation in third years, something which is completely unnecessary for a revenue-based program like Southwest

The Devaluations

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

Devaluations stink.

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.

I can’t imagine Southwest walking this change back, but I hope they will commit to no more no-notice devaluations.

Hat Tip View from the Wing


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3 COMMENTS

  1. I’m generally against government regulations, but these companies can’t keep their hands out of the consumer cookie jar and need to be taught who pays their salaries. I don’t feel bad for people who read this blog (me) because they likely get great value for airline miles and credit cards. The people I feel bad for are people who don’t know they are getting screwed a little bit at a time.

    Miles in practice are as valuable as cash and should be regulated more like bank accounts than some silly ‘rewards program’ at a bakery. What if your bank took only three percent of your money, no big deal? If it is no big deal to just devalue three percent, then why are they doing it? Because they get paid $100s of millions annually by Chase, Citi, etc.

  2. Thanks for doing this Scott. Would be great to have others also publicize it though I understand it’s not as outrage provoking since the changes are small compared to AS.

  3. Ridiculous. I called to cancel my Chase Southwest credit card but they kindly offered me a credit for the cost of the annual fee. If they keep pulling stunts like this, then I will definitely cancel next year.

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