There are two main ways that reward values are determined, based on how redemptions are structured.
First is fixed value, and this generally applies to cash-back rewards, or for some types of reward redemptions like booking through a bank’s travel portal. When you redeem certain bank-operated reward program points through their travel portal. For example, you can expect to get 1.25 cents per reward (¢pr) no matter what type of flight you book, or what cities you’re traveling between.
Alternatively, other programs are structured based on distance-based or zone-based award charts. This means that the value of the rewards will vary because the number of points required is fixed, and actual flight prices move.
So if you can identify the best deals within a category, you can end up getting a lot better value. Or, if you’re not paying attention, you could end up using your rewards for bad redemptions. For example, within the continental US, many programs might charge 12,500 points each way as their standard redemption option. If you use those for a flight from New York to Chicago that would have cost $300, you’d get 2.4 cents per reward, which is not bad. If you used them for a flight from New York to Los Angeles that would have cost $400, you’d be getting 3.2 cents per reward.
The main takeaway here is that the value of reward points is based on how you use those points. RewardStock has a built-in reward valuation platform so you always know the value of your points.