Today only: churn gift cards towards a Southwest Companion Pass for less than 1 cent per point

Today only, the Southwest Rapid Rewards portal is offering 15 points per dollar at Saks:

SWA_Saks_15X

And, via the Frequent Miler Laboratory, we see that a reader named Josh reported earning portal rewards at Saks when he bought physical (by mail) gift cards, but not when he bought e-gift cards:

Lab_Saks

And, via GiftCardGranny, we see that resellers will pay up to 84.5% for Saks gift cards:

GiftCardGranny_Saks

Put it all together

Note: Please do not take this as a recommendation – it is a thought exercise showing what might be possible.

Suppose you go through the Southwest portal and buy $7000 worth of gift cards.  And, suppose you pay with a Southwest credit card that earns 1 point per dollar.  And, suppose you really do earn 15 points per dollar on those purchases from the portal.  And, suppose you succeed in reselling those gift cards at 84.5% of face value, then we can work out total costs and benefits:

  • Total out of pocket cost (including $4 gift card shipping fee): $7004
  • Cash back from reselling gift cards: $7000 x .845 = $5,915
  • Net cost: $7004 – $5,915 = $1,089
  • Southwest points earned from credit card: 7004
  • Southwest points earned from portal: 7000 x 15 = 105,000
  • Total Southwest points earned: 112,004
  • Cost per point: .97 cents

Benefits:

  • Southwest points are usually worth around 1.5 cents each when used for Wanna Getaway fares, so this is like a 35% discount
  • You’ll earn a companion pass good for an unlimited number of flights (paid or award flights) for the rest of this year and all of the next year. 
    • Points earned from the Southwest portal and Southwest credit card count towards the Companion Pass. 
    • The companion pass is earned once you earn 110,000 points within one calendar year.

If you have already earned some Southwest points this year, but fewer than 110,000, keep in mind that you wouldn’t have to buy as many gift cards with this deal if your goal is the companion pass.

Real risks

Buying Southwest points, that count towards the companion pass, for less than a penny each is a phenomenal deal.  However, there are very real risks here…

  • You may not receive points from the portal.  Portal terms explicitly say “Not eligible on gift cards”. So, if points aren’t awarded you won’t get anywhere by contacting support.
  • You may not get 84.5% of face value from reselling.  Resellers change their purchase rates regularly.  Some will refuse to buy in large quantities from new sellers.  Worst case: gift cards you send may get lost and/or the reseller may claim not to have received them (yes, this has happened to some readers).
  • Southwest may stop counting portal rewards as companion pass eligible (very low chance of this, but it is possible)

About Greg The Frequent Miler

Greg is the owner, founder, and primary author of the Frequent Miler. He earns millions of points and miles each year, mostly without flying, and dedicates this blog to teaching others how to do the same.

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Comments

  1. Southwest also has their spring bonus, where if you spent $750 through their portal, you get 2500 bonus RR points. I’m pretty sure these do NOT count for the companion pass, but they are still very useful for redeeming on southwest and indeed a nice bonus.

  2. Do the other portals tend to behave the same was as Discover? i.e. if something pays out on discover, usually it would also pay out on other portals?
    saks is also 15pts/$ on AA today
    seems to be up across the board, actually. 12 on delta, 10 on alaska, and 5 on united.

  3. How long does it take the points to post on the SW? I just bought 25$ physical gift card to check if the points post.

    • It will take anywhere from a few days to a few weeks. You won’t have an answer in time for this promo, but please let me know how it turns out so that I can add the data point to the Lab

  4. By Murphy’s Law, I would pass any opportunities like this. But I have to admit that high rewards are only for those courageous warriors who long for it.

  5. General question about Shopping through Southwest…how quickly do the points post? I am used to seeing my typical cashback post later during the day, however I made a Kmart purchase through Southwest yesterday and don’t see it reflected today.

    Thanks
    Steve

  6. What are you all going to buy at Saks for $7K when nobody buys your gift cards? LOL. Dangerous advice. None of the major gift card resellers are likely to accept large amounts of GC for a low-volume retailer. As soon as the first few people sell any noted volume of Saks cards the % paid will plummet and everyone else will get stuck with a big loss or even worse having to go shop at Saks.

    • Agree, dangerous advice plus too much hassle. Even if you eventually can resell those gift cards at 84.5% of face value, “Cost per point: .97 cents” is still too expensive. What if the resell rate is much lower than 84.5%?

      Cost you NADA, if play your “REDbird”.
      Even you’re willing to pay a little out of pocket w/a little extra work, I still can get the Paypal reload each $500 for $3.95 fee, 2 cards $1K cost $7.90.
      Cost per point: 0.79.
      Load $$ to a family member’s PP account first then send $$ to my PP, to play safe, don’t W/D the cash, a little extra work, trip to Walmart, using the Paypal Biz Debit to transfer $$ to a SERVE account, the you know the SERVE Bill Pay to payoff the CC balance. The cost is lower, and much less risk and hassle than
      “that Saks GC chun”.

  7. Tested the waters. Failed. Bought small amount $75 gift card. Got 75 points from using Chase card, got 75 points added Companion, got 75 points added to Southwest balance.

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