I would argue that the true cents per point value should be calculated not just versus the quoted sticker price, but also the price of any acceptable alternatives. When someone brags about getting a great deal using cents per point, I hardly ever see comparisons with similar products. For instance, if they can book a flight for 30k points with a retail value of $900, they might think they’re getting a great deal at 3 cents per point. However, if there’s another flight with acceptable schedule for $400, the actual value of the redemption is much lower.

This is particularly true for traveling to other countries. Western brands often cost more than local ones. For example, spending 12k points for a $360 Hyatt hotel room might not be as good a deal as paying $120 for a similar local hotel. Similarly, American Airlines flights to South America might have good value in points, but they are usually twice as expensive as the local airlines.

Redemptions with great CPP are often very restrictive and only available on certain dates. If you apply the same level of flexibility when booking with cash, the CPP value is often very low. If I’m willing to plan my trip around a cheap award flight, I should be equally willing to plan my trip around a cheap cash flight.

The takeaway is that the cents per point value quoted is often not as a great as it seems. When you compare to other alternatives, the actual value is often much lower.

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