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American Express Membership Rewards 03.08.18

American Express Membership Rewards Value

American Express Membership Rewards, along with their competitor, Chase Ultimate Rewards are two of the most sought-after award currencies among the points and miles community. Like it’s peers, Membership Rewards offer the astute awards enthusiast ample opportunity for high-valued award redemptions. Conversely, and perhaps more-so than others, they offer some very low-valued options for those either too lazy, or too impatient to put a little effort in.

After all transfer partners were duly evaluated, we assigned an excellent ACRV of $0.0226 to each Amex Membership Reward. Of course, it’s worth noting that we base our value entirely on the assumption that one will inevitably use their points via transfer partner. By utilizing this methodology, we’re claiming that Membership Rewards are worth slightly more than Ultimate Rewards. If lower-value redemptions, such as award booking portals or gift card purchases were taken into account, the result would likely be the other way around.

Transfer Partners

Like all transferable award points, the most lucrative redemption option is to transfer to a travel partner, preferably with a redemption already in mind. Below, one can see that we found six transfer partners that had at least one award in excess of $0.06. To put that in perspective, The Platinum Card commonly has a signup bonus of 60,000 Membership Rewards. If one were to transfer to say, Cathay Pacific Asia Miles and redeem for $0.05, which is entirely feasible, that signup bonus would be worth a whopping $3,000!

American Express Membership Rewards Transfer Partner Value 03.08.18
It’s important to keep in mind the above chart is rendered with transfer ratios considered

So What about Real-World Expectations?

While it’s easy for a points and miles enthusiast to get excited about bonus categories and redemptions that, combined, result in a ROS that can exceed 10%, what’s actually likely to happen? To answer, this, we need to perform a little statistical analysis. By viewing the bell curve below, we can see the average non-zero value, across all redemption partners, is $0.0148. For an explanation as to why this differs from our ACRV, take a look here. Furthermore, the standard deviation is $0.0106. This means that, theoretically, 68% of redemptions should occur between $0.004 and $0.025. That’s quite a large range, and we would hope that an Amex customer would think twice about any redemption worth less than 1¢.American Express Value Distribution 03.08.18

Other ways to Redeem

After transferring Membership Rewards to a travel partner, the next most-lucrative redemption option would likely be to book travel directly with Amex. Sadly, unlike Chase’s booking portal, there appears to be little reason to do so. Most booking options, quoted in cash and points, tend to reveal a redemption rate of just $0.01.

For a slightly better option, Amex offer a somewhat unique “Fixed Points Travel Program”. For a fixed amount of points, one can purchase region based award tickets, up to a maximum dollar value. The point/price matrix can be found here. These type of fixed price awards can be a blessing, or potentially a trap. They are actually quite good, if the lowest priced cash alternative is at or near the maximum price for a given tier. Furthermore, some partner award programs are notoriously restrictive on certain routes. So Amex’s fixed point program may potentially serve as a work-around. It’s a trap if the lowest price cash alternative is quite a bit lower than the maximum tier price. See example below.

Amex Fixed Points Award Quick and Dirty Example
CategoryRoutePointsLow Price CashMax Tier PriceRedemption RateResult

If One Wants to Throw Value Away

Buy a gift card. Many are available, typically at a redemption value of just $0.008.

One further has the ability to pay for previous charges using their Membership Reward balance. Unfortunately, this is an even worst use of points than purchasing gift cards. Most charges will be “paid” using a redemption value of just $0.006.

If paying for previously purchased goods does not sound like a good idea, and one still wants to cheat themselves, the option to shop via Amex’s Membership Reward Mall exists. While there isn’t a common redemption value here, several cursory examples averaged $0.0051, using the Amazon priced divided by points method.

To Recap

American Express Membership Rewards, along with Chase’s Ultimate Rewards and Starwood Preferred Guest, occupy the top strata of the points and miles world. However, like all programs, they can be extremely lucrative or extremely useless. Below is a quick summary, in order, of how we would use Amex Membership Rewards.

Value of Membership Reward Redemptions
Transfer to a travel partner>1.5¢
Book using Amex’s Fixed Points Travel Program1-2¢
Book using Amex Travel’s Portal
Buy a Gift Card.8¢
Pay of Prior Charges.6¢
Shop the Membership Awards Mall.5¢