American Express does you a favour by dropping Membership Rewards redemptions for goods

Probably the worst possible way of redeeming any sort of travel loyalty points, whether it be airline miles, hotel points or credit cards points, is for ‘real stuff’.

The ‘person who redeemed their Lufthansa miles for a toaster’ is short-hand in the loyalty industry for describing someone who makes sub-optimal use of their points.  The only reason that Lufthansa has made a massive business out of their Worldshop operation (they even post me a big glossy catalogue each year) is that the hard 3-year expiry date on their miles creates a continual stream of panic redemptions.

It’s not that the loyalty schemes are trying to rip you off.  It is simply that ‘stuff’:

is heavy and difficult to ship

has costs associated with returns and repairs and

is not bought in big enough quantities by the programmes to get serious discounts

American Express has decided to bite the bullet.  It is dropping all Membership Rewards redemptions for physical goods on 31st May.

There is no dedicated page explaining this on the website but the banner below is showing at the bottom, in rotation with other banners, when you log in at membershiprewards.co.uk:

How bad are Membership Rewards redemptions for goods?

Let’s look at a typical redemption.

The Kenwood De’Longhi Nespresso Coffee Machine pictured below costs 59,340 Membership Rewards points:

The RRP for this product is £280.  This means that it is ALREADY poor value for points, since you are only getting 0.47p per Membership Rewards point.

However, scoot over to Amazon (click here) and the same coffee machine is just £247:

This means that you’re only getting 0.41p per Membership Rewards point.

And here’s the big contradiction ….

You can redeem your Membership Rewards points for Amazon gift cards at the rate of 0.5p per point.

So, if you really really really wanted to use your points for this particular Nespresso machine, it makes more sense to redeem 49,400 Membership Rewards points for £247 of Amazon gift cards, rather than use 59,340 points to buy it direct from American Express.

(Of course, it makes FAR more sense to redeem your Membership Rewards points for a travel reward.  This HfP article looks at the most valuable Membership Rewards redemptions.)

Everyone wins from this American Express change (for once!).  Amex has an easier life because it no longer has to deal with the administration of physical product redemptions, it can streamline the Membership Rewards website and there is no risk of any cardholder making a redemption of very dubious value ….

PS.  If you missed it, take a look at our recent article on the top 10 reasons why you should get the ‘free for life’ American Express Rewards Credit Card.

Want to earn more points from credit cards? – December 2021 update

If you are looking to apply for a new credit or charge card, here are our November 2021 recommendations based on the current sign-up bonus. 

You can see our full directory of all UK cards which earn airline or hotel points here. Here are the top current deals:

British Airways American Express

5,000 Avios for signing up, no annual fee and an Economy 2-4-1 voucher for spending ….. Read our full review

British Airways American Express Premium Plus

25,000 Avios and the UK’s most valuable credit card perk – the 2-4-1 companion voucher Read our full review

American Express Preferred Rewards Gold

Your best beginner’s card – 20,000 points, FREE for a year & two airport lounge passes Read our full review

The Platinum Card from American Express

30,000 points and an unbeatable set of travel benefits – for a fee Read our full review

Earning miles and points from small business cards

If you are a sole trader or run a small company, you may also want to check out these offers.

American Express Business Gold

20,000 points sign-up bonus and free for a year Read our full review

American Express Business Platinum

40,000 points sign-up bonus and a long list of travel benefits Read our full review

British Airways Accelerating Business American Express

30,000 Avios sign-up bonus – plus annual bonuses of up to 30,000 Avios Read our full review

Capital On Tap Business Rewards Visa

The most generous Avios Visa or Mastercard for a limited company Read our full review

For a non-American Express option, we also recommend the Barclaycard Select Cashback card for sole traders and small businesses. It is FREE and you receive 1% cashback on your spending:

Barclaycard Select Cashback Credit Card

1% cashback and no annual fee Read our full review