Recently, Southwest Airlines gave us the ability to combine cash and points to pay for flights. But unlike some hotels’ schemes, Southwest’s system is a bit inflexible. As such, is Southwest cash and points worth it? Let’s dig in and find out.
Southwest Rapid Rewards has long been a revenue-based loyalty program, meaning you earn points based on how much you spend, while redemption values are based on the actual price of tickets. However, award tickets with Southwest gave you better value than a penny per point. As such, it’s kind of sacrilegious that Southwest hasn’t offers a cash and points option until now. Of course, that inevitably begs the question – is Southwest Cash and Points worth it? I’m going to go out on a limb and say no.
Is Southwest Cash and Points Worth It?
Why, you ask, do I say that Southwest cash and points isn’t worth it. Simple math, really. You see, the Southwest cash and points system doesn’t work in the same way as you see in the hotel space. Marriott, for example, operates theirs by allowing you to redeem points for certain nights and pay cash for others in the same reservation. On the other hand, Hilton uses a slide to adjust how much points versus cash you want to pay. But, for its program, Southwest offers you several hard values based on the overall cost of your fare, and these values have fixed redemption ratios.
Need to visualize it? Here are a couple of examples I pulled from Southwest’s system. First, we have an HNL-OGG-HNL itinerary over the upcoming Memorial Day weekend. As you can see, the total cost of these flights comes out to just over $200.
When I brought up the cash and points option for this itinerary, I was presented the following options.
As you can see, I can choose to redeem between 2,000 and 9,000 points to save between $20 and $90 on my fare. At the top end of the spectrum, that’s 9,000 Rapid Rewards points to save 45% on my tickets. Doesn’t seem so bad, does it? Well…
That exact same itinerary that would cost me $204.20 would cost 14,130 points (plus $11.20) for an award redemption. That’s a difference of just 5,130 points for the full roundtrip fare, where as the cash plus points option would cost me 9,000 points PLUS $114.20.
Put it another way, if I do cash plus points, I get $0.01 per point redeemed, versus about $0.15 if I went all in and redeemed points for the entire itinerary. That’s 50% more value for going all points!
Not convinced? Let’s look at a more expensive itinerary. This time, I chose HNL-SJC-HNL for the same dates. Here, the cash rate is $629.40.
Cash and points, naturally, comes back with a different set of discount options, ranging from $60 off for 6,000 points to $290 off for 29,000 points. At the top end, that’s about 46% off my fare, which seems to be the upper limit they’re willing to let you go to. Unsurprisingly, the redemption value here remains $0.01.
So, what does the award redemption rate look like for this flight? 48,868 points roundtrip. In this case, 29,000 points represents 60% of the cost of the entire award ticket price to save 45%, which clearly shows you’re leaving money on the table by going this route. But let’s do the math, anyway.
The above redemption returns a value of $0.013, which is lower than the HNL-OGG-HNL itinerary, but is still significantly more than the $0.01 you’d get for redeeming for the discount.
Should You Use Southwest Cash and Points?
Look, I’ve always been an advocate of using your points and miles in whatever way you wish. If burning points and miles allows you to travel when you otherwise wouldn’t have been able to, then that’s more important than hoarding points for some aspirational redemption that may change before you reach your goal anyway. And that continues to be my belief today, which is why I say that, yes, you should use Southwest Cash and Points if you see value in doing so. Heck, in the examples above, I clearly don’t have enough points to redeem for the HNL-SJC-HNL flights. But let’s not forget that other options exist, too.
For example, if you have a stash of Chase Ultimate Rewards points, which is where most of my points reside, and a Sapphire Preferred/Reserve you could easily transfer your UR points 1:1 into Rapid Rewards to bridge the gap. After all, Cash and Points don’t earn towards status, so if you’re not going to earn towards status, why spend any cash at all if you can avoid doing so. Doubly so since the cash you do spend won’t even earn you any new Rapid Rewards points! This is why I wouldn’t consider this option unless I was desperate.
I’d like to tell you that there are better options, and there very well could be depending on the travel period, etc., but for my above example, Alaska and Hawaiian were both charging far more miles for the same flight. Think over 60,000 miles.
How to Use Southwest Cash and Points
If you decide to use Southwest Cash and Points, you’ll need to book your flight using “cash.” Then, down in the payment section, you’ll need to expand the Cash + Points and other forms of payment section. It’s pretty easy to blow past, so make sure you scroll slowly through this section. But, remember, you won’t earn more points for the portion of the ticket you pay for, so try to get the maximum discount if you can.
Southwest Cash and Points, Final Thoughts
Having more options is always great, and I’m glad this option exists. As I said, I wouldn’t use Southwest Cash and Points, since you give up to much when doing so – value, points, and status credits – but if I really needed to get somewhere, wanted to save money, and didn’t have enough points, then I could see myself going this route. But, again, if this option appeals to you, then have at it! Whatever helps make travel more accessible to you is all that really matters.