The American Express Economy
April 26, 2011
Quick back-story. I was trying to reserve a car with my Amex points for a trip I’m taking to Virginia. My wife and I are going on a short vacation and I had some Amex points so I wanted to splurge a little and rent us a convertible Mustang. During our trip, we are driving up to New York for a day and that calls for a Mustang drop-top, right?
Turns out that most car rental agencies don’t make convertibles available for gift certificate buyers (that’s how you rent a car with Amex points… Gift certs). I’m sure it’s because the convertibles are difficult to keep in inventory and Amex probably only pays out pennies on the dollar for those certificates. The car rental agencies want to save those premium cars for cash paying customers. Fine, I get that.
So then I started looking at other things that I could use my Amex points on and I came across some Herman Miller chairs. I’m going to buy one this year anyway so it made sense to use points if I can. I looked up how much the Herman Miller Mirra chair was and Amex will give it to you for 126,300 points. I only have 91,581 points available so I figured I could just pay the difference in cash. I was pumped. Could I really get the Herman Miller chair I want for a couple hundred dollar plus my Amex points?
##Not on this planet, not in the amex economy
Here is the math. I currently have a 3.9 college GPA but I still suck at math so please correct me if I’m wrong…
At Amazon, the Herman Miller Mirra sells for $799.00. Take 126,000 points divided by $799 and that puts the Amex point value at 158.07 per $1. When you add the Mirra to your cart and go to checkout, the Amex website tells you that you don’t have enough points and that you need to purchase more. You can purchase points from Amex at 40 points per $1 but you have to buy them in 1,000 point increments. So I needed to buy 35,000 points in order to have enough points to get the chair. So, 35,000 divided by 40 points per $1 comes out to $875.00 that I need to come up with to by my chair that costs $799 from Amazon. That’s $76 more for the chair, plus I’m giving up 91,581 points in the process.
If you did not follow all of that, here is the short version: Amex just broke into my home, robbed me, stole my children, and sold them on ebaY for $1 just because they can.
What a joke. Here is what the real math should be: You take the points per dollar cost of 158.07 and figure out how much money I have with 91,581 points; it comes to $579.37. This means I’m short $219.63. That’s what I should pay in cash…
Yeah yeah, I can read your mind. “Duh Billy, everyone knows the points systems are crap”. I knew the points system is backed by clever marketing, but I was totally caught of guard by running the numbers myself. The net result is that to complete this transaction, it actually means my points have a negative monetary value. Well hot damn!
I feel like a total idiot for getting excited about this. There has to be something you can use your points on where you at least get the feeling where you come out on top. I’m going to find that thing, whatever it may be…