Is trading gift cards for United miles a good deal?

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I just got this e-mail from United Airlines promoting their “service” where you can trade gift cards in for United MileagePlus Miles.

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Here’s the text of the e-mail:

Rather than keep a gift card you may not use, exchange it for award miles and get one step closer to taking your dream vacation. Here’s how the MileagePlus® Gift Card Exchange works:

■ Go to giftcardexchange.mileageplus.com, and trade in your gift cards from more than 100 popular retailers.

■ Preview the amount of miles offered before completing the exchange.

■ Receive miles in your MileagePlus account.*

Exchange cards now ›

At first, you might think that this would be a good way to get rid of some unwanted gift cards. I was curious to see what sort of value they would be giving. The site says the minimum miles given are 670 miles for a $25 card, 1,330 for a $50 card, and 2,660 for a $100 card. I was wondering if the trades might go higher than that, but that does not appear to be the case.

I first tested it out by calculating the exchange value of a $100 Williams-Sonoma gift card. This was relevant to me since I was just offered 20x AAdvantage miles for Williams-Sonoma purchases with my Barclaycard American Airlines Aviator card.

Here’s my result:

win a free trip 1 - Is trading gift cards for United miles a good deal?

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2660 miles for a $100 gift card! That’s 3.75 cents per mile. Considering that you can purchase 3000 United MileagePlus miles for $105 (3.5 cents per mile), there’s nothing special here. But wait, let’s look just a bit further.

United is partnering with CardCash.com for these exchanges. By going directly to CardCash instead of via United, I could receive $82 for that same $100 gift card.

In reality, you’re then trading $82 in cash for 2660 miles, not $100. Taking that into account, it’s around 3 cents per mile. This is still not a good deal, in my opinion, but if you’re really close to an award, perhaps trading your unused gift cards is actually a bit cheaper than buying miles directly.

Note: This analysis of buying miles does not include any “buy miles” promotions, such as the August 2015 United promo where you can save up to 35% on purchases of up to 150,000 miles, which lowers the price to 2.275 cents per mile on large purchases.

It does actually bring up an interesting question as to whether or not this is a potential spend opportunity if you can find heavily discounted gift cards that you can then flip via this method. A hypothetical here would be if you could purchase a $500 gift card for say, 35% off, then turn around and flip that $325 spent for 13,300 miles (2.44 cents per mile). Perhaps it’s an option if you’re trying to meet a minimum spend requirement, but again, there are likely better options unless I am missing something, and you’re still not getting great value here.

If for some reason you really want to exchange your gift cards for United MileagePlus miles, go here to do it. Otherwise, I’d suggest finding some other way to get rid of unwanted gift cards that gives you better value in return, such as finding the best offer on Gift Card Granny. Yes, miles can be great, but in this case, go for the cash unless you’re really close to an award.

 


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