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

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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)
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