Why a 25% Discount on Purchased Starpoints Can Be Quite Good, and How to Scale It

Starwood is offering up to a 25% discount on purchased points. And even though it’s just a 25% discount, it can make real sense.

Through May 31 here’s the tiered discount:

  • 10% off 500–9,500 Starpoints
  • 15% off 10,000–14,500 Starpoints
  • 20% off 15,000–19,500 Starpoints
  • 25% off 20,000 Starpoints

This isn’t an uncommon offer — Starwood offered this in April and November of last year, and they offered it in 2013. But it’s also the biggest discount I’ve seen.

The ‘normal’ price on Starpoints is 3.5 cents per point. Ouch. Fortunately, unlike airline miles, you don’t pay an additional tax on top. And there’s not also a ‘processing fee’ like many of the airlines charge.

If you max out on the discount, and buy 20,000 points, it would cost you $525… that’s 2.625 cents per point.

Still not compelling, it can be possible to get better than 2.6 cents per point in value from hotel redemptions but only the best redemptions do orders of magnitude better.

Here’s what it opens the door for, though. Most Starwood airline mileage transfer partners are at a 1:1 ratio, and they give you an additional 5000 miles when you transfer 20,000.

You can view buying 20,000 Starpoints as really buying 25,000 airline miles — and then you are buying miles at 2.1 cents apiece.

That’s going to be too rich for most people, but if you need to top off for instance an Alaska Airlines account towards a good specific award then this can be a reasonable way to do it as it’s a lower price than Alaska usually sells miles for even when they’re running promotions.

Another play is Japan Airlines miles, JAL’s Mileage Bank is one of my favorite programs for distance-based oneworld awards and for Emirates redemptions (which are often cheaper than those offered by Alaska).

If you want to buy more than 20,000 Starpoints, remember that:

  • Each member’s account can buy 20,000
  • Starwood allows you to transfer points between each member of a family at the same residential address

Many will take a pass on this, but some will find it strategically useful.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. Just curious on your thoughts here. If we were using a card like the Citi Prestige card (I chose this one as I just got it, but other cards could be used) and do book a fair amount of AA flights, could it make sense to speculative purchase here. My rationale is that the purchase of Starpoints at $.02625 would be offset by the $.0166 rebate on AA flights, thus an ability to purchase at a rough estimate of $.00965/point. Again, this assumes a few things: these would be used for AA bookings (could get potentially greater value from a transfer partner), having the cash available to make this purchase, ignoring the opportunity cost of earning 3X the cost of the Airfare in points and any costs associated with the risk of devaluation. Haven’t decided if I would jump in on this one but was wondering if I am being irrational with my though process.

  2. Gary – so are you saying that when you want to book an award ticket on any OneWorld member airline or for any Emirates award tickets, you do both through the award section of the Japan Airlines home website? Or you could do the Emirates piece through the Alaska Airlines home website? If this is correct can you please collate/summarize other award ticketing relationships that are non traditional (booking Emirates award on Alaska website).

    Would you agree that of all the points transfer card options available, SPG offers the most airline options? Tx

  3. Starpoints can be manufactured for as little as 1.1 cents each. It does take a bit more time and effort, but why pay double to buy them from SPG?

  4. Actually, the cheapest I’ve bought Starpoints was when it was 35% off so 20,000 points cost me $455. But then it was during the Great Recession.

  5. @Gary — Do you have any broad estimates / reference points for fuel surcharges when redeeming JAL miles on Emirates? Perhaps DXB to North America or SE Asia, or vice versa ? Any meaningful difference b/t business and first? Thanks in advance for any info.

  6. rockchalk: no, you can’t really manufacture starpoints for 1.1 cents. You can get a cash+points award with that theoretical valuation, but when you cancel the award, you don’t get to keep the points, so you can’t do that like you could with IHG points.

  7. Gary, do you think SPG will run another bonus points conversion to AA miles this year?

    Last year (could have been July) I am sure that SPG offered an additional bonus 5000 miles on top of the standing 5000 bonus for each 20000 points transferred to AA.

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