I’ll preface this post with a note acknowledging our other threads on rewards points, whether they are worth it and some rip offs. I thought this example that I received from the Velocity Frequent Flyer program was worthy of its own thread.
As of February 2019, there is the below promotion where you can purchase Velocity points and receive a 20% bonus.
Before we we even get into the detail of this, I’m already reminded of this classic skit:
So here we have Velocity points, just like regular money but more ‘fun’. And what kind of fun can these points purchase? Well how about this Samsung Galaxy S9 Plus, just 268,871 points.
Seems like a lot of points - for example, let’s say you have an AMEX Velocity Platinum card that can ‘Earn 1.25 Velocity Points per $1 spent’ at the time of writing. You’ll need to be spending in the hundreds of thousands to collect this many points, which leads us to purchasing of points outright - perhaps to bridge the gap between points balances and the rewards we so dearly deserve, or perhaps we just like the look of the promo.
However we arrived here, the next step is to check out how many points we can buy for our money here’s the conversion table:
Assuming you needed to buy all the points to get this phone, you’re looking at $5341 (once you account 20% bonus points). Even if you are already halfway to the total points needed and want to bridge the gap, you’ll still end paying double the RRP (shown below) and a quick Google search will tell you that you should be able to get this phone for less than the RRP anyway.
While I know that many people would not use the points in this way, or for this item. Or perhaps there is a backdoor for signing up to a new card that grants you a one-off points bonanza and that changes the equation - however you cut it, it’s still a VERY expensive way to buy a phone. At five times the RRP, at what point does this become a concern and switch into something a little more predatory, Shonky even?
Let me know what you think in the comments below.