Is Delta’s Miles + Cash Option a Deal or a Dud?

Apr 13, 2015

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This year Delta unveiled Miles + Cash awards, which (unsurprisingly) allow you to redeem a mix of both SkyMiles and dollars to book tickets. Today, TPG Contributor Richard Kerr examines whether this new redemption option is worth using.

Delta SkyMiles had a busy 2014, and hasn’t slowed down much this year. The program announced multiple changes, sometimes made changes without announcement, and generally overhauled the program in its entirety. One of the additions Delta made was a Miles + Cash option for award tickets. In this post I’ll look at whether this new option provides real value, or if it’s yet another SkyMiles program devaluation.

Not to be confused with Delta’s Pay with Miles option, Miles + Cash adds a cash surcharge to award tickets in order reduce the cost of an award ticket. For example, you could pay 25,000 miles and $11.20 to fly JFK-LAX round-trip in economy, or you could use the Miles + Cash option (if available) to pay 15,000 miles and $190.20. There are a few things to know off the bat:

  • Miles + Cash is available for round-trip tickets only.
  • Miles + Cash is not available on all flights, but can be available for both main cabin and first/business.
  • You have to be logged into your SkyMiles account to see Miles + Cash options.
  • In addition to any redeposit or cancellation fees you have to pay, the cash surcharge on a Miles + Cash ticket is non-refundable. You will be refunded the cash portion in the form of SkyMiles — e.g., in the example above you would not be refunded the $190.20; instead, your account would be refunded 25,000 miles.
  • Pay with Miles tickets are now treated like revenue tickets, whereas Miles + Cash tickets are treated as award tickets.
Is Delta Miles + Cash as cool as this picture?

The way this works out, you’re essentially paying cash for some portion of the miles needed for an award ticket. In the example above you’d be paying $179 for 10,000 miles, effectively buying miles at a rate of 1.79 cents apiece. If you’re buying miles for cheaper than the redemption value you can get by using miles for an award ticket, then this option could make sense.

Continuing with an example on the JFK-LAX route, main cabin round-trip tickets at the end of May are $332.20. The same flight is is available for 25,000 miles, giving you redemption value of 1.33 cents/mile. In this case, using Miles + Cash (buying miles at 1.79 cents/mile) that you redeem for 1.33 cents/mile is obviously a losing proposition. You’re better off using 25,000 miles for the ticket.

If using Miles + Cash here, you would pay more per mile than the redemption value.
Using Miles + Cash here would cost you more per mile than the redemption value.

So when does the Miles + Cash option makes sense? Here are a few scenarios:

1. When the redemption value exceeds the cost — I sampled 10 itineraries (5 in Main Cabin and 5 in Business/First) covering different routes like large market to large market, Delta Hub to Delta Hub, and small market to small market. The table below shows each route along with the cost of various redemption options, and indicates whether Miles + Cash is a good idea.

Itinerary Revenue Cost Award Ticket Redemption Value (cents/mile) Miles + Cash Miles Cost (cents/mile) Redemption > Cost?
ATL-NRT June 3-10 Main Cabin $1,686.20 80,000 + $50.40 2.04 65,000+$329.40 1.86 Yes
SEA-PEK June 17-24 Business $3,269.80 180,000 + $37.90 1.80 160,000 + $416.90 1.91 No
LAX-LHR June 17-24 Main Cabin $1,640.00 77,500 + $196.90 1.86 70,000 + $470.30 3.64 No
MIA-ORD June 17-24 Main Cabin $183.20 25,000 + $11.20 0.69 15,000 + $190.20 1.79 No
DTW-CDG July 15-22 Business $6,086.30 160,000 + $131.50 3.72 140,000 + $510.50 1.9 Yes
PHL-HOU July 15-22 First $797.25 57,500 + $11.20 1.37 42,500+$290.20 1.86 No
SFO-MSP July 15-22 Main Cabin $392.30 30,000 + $11.20 1.27 20,000 + $190.20 1.79 No
LGA-GIG July 15-22 Business $4,422.33 195,000 + $65.43 2.23 175,000 + $444.43 1.9 Yes
CHS-DEN August 12-19 First $748.20 70,000 + $11.20 1.05 55,000 + $290.20 1.86 No
BUF-MSY August 12-19 Main Cabin $351.20 37,500 + $11.20 0.91 32,500 + $190.20 3.58 No

Of the 10 routes listed above, only 3 provide a good deal where the cash portion you pay is at a lower rate per mile than the redemption value of your miles. 8 of the 10 examples allow you to acquire miles for roughly 1.8 cents apiece, with two odd outliers where miles cost a massive 3.58 cents apiece. I believe the general rule of thumb to glean from this data is that if you can redeem miles for more than 1.8 cents apiece, then the Miles + Cash option makes numerical sense.

2. When you’re short miles — Perhaps obviously, if you don’t have enough miles for a full award redemption, but the Miles + Cash option is available, then at least you have access to a discounted ticket. 

3. When you’re conserving miles for a better redemption value — If you’re a hard charger in the points and miles hobby and know your redemption value every time you book an award ticket, you could use the Miles + Cash option when the overall redemption value is lower than what you know you can get in the future. Conserve your miles by paying for some of the ticket in cash, and redeem for a full award ticket later when you can score an incredible redemption value.

Buy Miles for 1.8 cents – Platinum and Diamond Medallion

Delta Platinum and Diamond Medallions are not charged any redeposit or change fees for award tickets. Therefore, they can book a Miles + Cash ticket, and as I explained in the beginning, cancel that ticket and be refunded the balance in miles. To find out how many miles you would be refunded, simply click to the confirmation screen of a Miles + Cash booking and look at the total ticket value per passenger.

If canceled, Miles + Cash bookings will be refunded entirely in miles based on the ticket value per passenger.
When canceled, Miles + Cash bookings are refunded entirely in miles based on the ticket value per passenger.

While this tactic won’t get you free tickets, it could certainly result in big savings. In the Detroit to Paris example from the above chart, buying miles at 1.8 cents apiece would result in a business class ticket for $2,880 instead of the revenue fare of $6,086.30.

Bottom Line

To play devil’s advocate, just because you find your itinerary offers a redemption value of 1.8 cents/mile doesn’t mean you have to (or should) use Miles + Cash. At the end of the day, pay exclusively with miles means more cash in your pocket to be directed elsewhere, and sometimes I think award travelers lose focus of that. Regardless of what the redemption value is for your award ticket, if you want to spend less money, then spend less money!

For me, the Miles + Cash option revolves around that 1.8 cents/mile cost most itineraries seem to offer. In TPG’s most recent monthly valuations, Delta Skymiles are listed at 1.2 cents. Therefore, buying at a rate of 1.8 cents per mile isn’t very appealing. Certainly the itineraries where Delta is asking an astronomical ~3.5 cents per mile means I wouldn’t even stop scrolling on the webpage. From my research for this post, redemption values above 1.8 cents/mile seem to be the exception, which means using Miles + Cash should be your exception to the rule as well.

Have you used Delta’s Miles + Cash option?

Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

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