There are actually 2 tiers of the American Express Membership Rewards Program—the MR tier (this is the “full” program) and the Express Tier (which is identical to the MR tier except that you can’t transfer points to other frequent flyer/hotel programs). The Express Rewards program typically applies to AMEX cards that don’t charge annual fees, such as Blue from American Express®.
Since the Express Program offers fewer redemption options than the full MR tier, you might feel like you’re getting hit below the belt (and it turns out to be true!) as the value of the points earned in the Express program is worth less than the same number of points earned through the MR program.
The American Express Membership Rewards Express Program offers a number of ways to redeem points, including cash and non-cash gift cards, booking of flights directly, shopping, etc. As such, to assess the value of the program, we need to assess the value of each redemption option, and determine the best redemption approaches.
By the way, if you’re simply looking for an awesome Amex rewards card, check out our review of the Blue Cash Preferred® Card From American Express. As a bit of plastic foreplay, with this card you’ll get 6% cash back at U.S. stand-alone supermarkets, 3% cash back on gasoline at U.S. stand-alone gas stations and select major department stores, and 1% cash back on other purchases.
Value of Amex MR Express Points When Redeeming for Various Rewards
As you can see from the table below, the highest value attainable for the Express Rewards Program is $0.01-before adjusting for non-cash penalties. However, on an adjusted basis, we estimate the highest cash-equivalent value you can get from these points is $0.0090 per point. This is because there is no way to get direct cash out of this program at $0.01 per point, and cash is always superior all else equal. The next best option is gift cards, but since gift cards are never as good as cash-in-hand, we apply a penalty to adjust for this fact. For an explanation of why we apply this penalty, check out our post Why does GetDebit Penalize the Value of Non-Cash Rewards?
|Award Type||Approx. Street Value||Points Required to Purchase||Dollar value of 1 point|
|4 AMC gold tickets||$42||4,300||$0.0097, but $0.0090 after 7% non-cash penalty|
|$50 AMEX cash card||$50||10,000||$0.0050|
|Purchase of airline tickets (“Pay with Points” program)||price of ticket||2 points/dollar||$0.0050|
|Koss Sparkplug headphones||$12 (includes shipping via Amazon||2,900||$0.0041|
|25 iTunes downloads||$25||3,000||$0.0083|
|XBox 360 headset||$20 (Amazon)||4,200||$0.0047|
|Various gift cards||$25||2,500||Nominal value of $0.01, but GetDebit penalizes by 10% (see below) so valued at $0.0090.|
|$50 traveler’s cheques||$50||10,000||$0.0050|
The Giftcard Black Hole
One way to earn a nominal value of $0.01 per Express Point is to get a gift card. However, we firmly believe that gift card nominal values should be penalized for the following reasons.
- Gift cards limit your ability to comparison shop. You are stuck with that merchant.
- There is a small risk (but moreso in this economic environment) that any given retailer could go belly-up.
- According to an article on unused card values by consulting firm Tower Group, $8B was lost by consumers in 2006 who let their gift cards go unused (lost, expired, ignored).
So GetDebit believes gift cards should be valued, generally, at 90% of their face value. To validate our discount, GetDebit investigated completed sales of gift cards on EBAY and discovered that most sales closed at around 80-85 cents on the dollar—so our 90 cents on the dollar estimate seems reasonable, maybe even generous.
If you want to read a little more about GetDebit ranting on gift cards, you can read our post, 5 Reasons Why Gift Cards Suck.
Pay With Points Option
The American Express Membership Rewards Express program also allows you to purchase airline tickets directly with their “Pay With Points” program. However, a little-published fact (until after you get the card!) is that, unlike with full Membership Rewards points, the MR Express points redeem at only 50% of full value-a crushing blow to the value of the Express Program (thanks to a reader, Rob, for pointing this out!). For example, to buy a $200 airline ticket, you’d need 40,000 MR Express Points.
The Final Analysis
In conclusion, GetDebit estimates the value of an American Express MR Express point to be just a bit south of $0.01 per point—we’ve placed a value of $0.0090 per point, as we assume that the primary mode of redemption/usage of points will be through gift cards.
Disclaimer: This content is not provided or commissioned by American Express. Opinions expressed here are author’s alone, not those of American Express, and have not been reviewed, approved or otherwise endorsed by American Express. This site may be compensated through American Express Affiliate Program.