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Travelling with points becomes surprisingly complicated once friends and family enter the picture. Unless you only travel solo, there’s definitely been a time when you’ve been travelling with friends or family, and the subject of how to split expenses has come up. Especially if you’re redeeming points, do you charge someone the market value of what you’re redeeming for? Probably not, but on the other hand, earning points isn’t free and certainly isn’t without opportunity cost.
Actually, one of the topics I find most awkward is when someone who doesn’t understand miles and points asks me to use my points to help them book a trip, and they’ll “pay me back the value”.
Points as a Currency
The thing is, for those not in the miles & points game, “points” sound like free currency. Redeeming any number of points is “free” because you’re not spending any out-of-pocket money. The issue I’ve run into sometimes is someone expecting the other expenses to still be split evenly if I’m also contributing with points in some way, like covering accommodation. Since they view points as “free”, this can cause some friction.
I find it terribly awkward to explain that points are actually a valuable currency and not at all “free”, since we forgo cashback to earn them and spend more money than we otherwise would to accrue them. We pay annual fees, Chexy fees, and other costs specifically to acquire those points in the first place.
Sometimes, we pay additional fees to meet minimum spend requirements
To outsiders, it can also look like accruing points is easy and that we’re sitting on a large stash at all times, so we should be liberal with how we spend them. What’s even harder to convey is how much time and effort goes into earning those points. After paying the annual fee, we have to figure out the minimum spend requirement, consider our 5/24 status, product switch the card, call the bank to do credit splits, or anything else. When gifting points to friends and family, you’re essentially taking on that labour for them — which isn’t to say you shouldn’t be generous, but it’s just a fact.
Splitting Expenses Paid with Points
Hotels
On the other side of the coin, it doesn’t make sense to charge someone the rack rate (or half if you’re sharing the room) if you’re covering it with points. If you redeem for a business class ticket, it’s unreasonable to expect someone to reimburse you $5,000+ when they’d never spend that much for a flight in the first place. If my hotel room is going for $800 and you redeemed a 35,000-point Marriott Free Night Award with a 20,000-point top-up, I’m not charging my friend $400.
Do you charge them based on your acquisition cost (annual fees, fees to hit minimum spend, etc.)? Do you charge them a random “reasonable” amount, like $150/night, no matter the hotel?
What do you charge someone if redeeming points for, say, Waldorf Astoria Osaka?
I’ll be honest: I avoid this problem most of the time by just paying cash. With the way hotel points have devalued, paying cash makes sense, anyway, especially if I’m splitting the cost with someone else. If there’s a great redemption or an aspirational property I really want to visit, I think the logical thing to do is to just be generous and pay for the hotel with your points. My friends will cover a dinner or two, and that’s even in my books.
Flights
My preference for flights is a little different: I think it’s reasonable for the other person to cover the equivalent amount it would’ve cost to buy the flight in cash, either to cover accommodation or other expenses. Their covering the cost of what an economy flight would’ve cost is totally reasonable if I’m redeeming points for both of us to fly business class. Even if I’m redeeming for economy, my take is that covering the cash price is a fair exchange, since flights booked with points tend to have more flexible change/cancellation policies.
If this friend is willing to apply for credit cards, I’m also okay with them paying me back (in points) later.
I’d much rather help my friends and family earn their own points, but that’s easier said than done
“Sell Me Your Points” Dilemma
The other difficult thing about valuing points as currency is that we tend to overvalue them, while most people undervalue them. A personal example: when I first became proficient at earning points and building larger balances, some family members asked if they could buy points from me for trips back to China. For my parents, brother, or grandparents, that’s one thing — I’m obviously happy to buy the ticket with no cash repayment needed. For extended family, the dynamic feels different.
They’ll ask me to help buy them an economy ticket, and the main issue is that redeeming for long-haul economy often has poor CPP, which creates a problem since their goal is usually to save money on the ticket (by buying my points).
Redeeming for long-haul economy is not an optimal use of points
Their position is that I should give them a discount since I have so many points, and it’s a win-win because I’m “earning some cash”. My position is that helping them save money on their flight means selling my points at a more-than-healthy discount due to the poor CPP issue. I explain that, in this case, I would personally pay for the flight in cash — which is true! But you can imagine how well that pans out with non-points people.
That’s before we even get to the point where I have to explain what award availability is and why I can’t just book the exact flight they want with points.
Takeaway
And that brings me full circle as to why I never charge anyone directly based on how many points I spent, for example, splitting a hotel night booked with Marriott points valued at just 0.5¢ each. What I perceive as generosity could easily be seen as greed by someone else, especially with the “points as a currency” issue. I just don’t think this works out in anyone’s favour.
I’d much rather have them pay me back “in kind” in other ways on our trip or repay the points directly, as if this were a loan. At the end of the day, this topic really depends on your dynamic with friends and family, and obviously, not all friends are equal. If I sense any animosity brewing, I’ll either just spend the points with the mindset of “this is a gift,” or we’ll book an Airbnb instead.
I’m really curious how everyone else handles this, so please feel free to share your thoughts in the comments below!
