How much are Southwest Airlines Rapid Rewards Points worth?
Southwest Airlines Rapid Rewards offers a loyalty program whose currency is a Rapid Rewards point. The value of one Rapid Rewards point is tied to the cash rate of a flight, and its value will primarily depend on the fare class you choose.
PointsValues believes that a typical passenger can redeem Rapid Rewards points fairly consistently at 1.5 cents per point, and in some cases, up to 1.7 cents per point or more.
For maximum value, redeem Rapid Rewards for Wanna Get Away awards with layovers.
Redeem Rapid Rewards for Wanna Get Away fares only!
The number of points needed to redeem for a free Southwest Flight is directly dependent on the published cash rate. If the published cash rate goes up, the points price goes up correspondingly, and vice versa.
But the "exchange rate" depends on which type of ticket you purchase. Southwest Airlines has three classes of tickets - Business Select, Anytime, and Wanna Get Away. Business Select and Anytime fares offer lower redemption rates at around 1.0 cents per point, but Wanna Get Away fares offer redemption rates at 1.5 cents per point. Generally speaking, unless you exclusively book flights at the last minute, you will be able to find Wanna Get Away fares available, and you will be best off redeeming your points for Wanna Get Away fares only.
Know the fare structure to maximize Southwest points value even further
Published cash fares have a base fare component and a tax component, but the formula to calculate the number of points needed for a ticket is based on the base fare only, and not the tax portion. In other words, you do not need to pay for taxes (other than the September 11 Security fee) if you use points, and you will get a better redemption for fares that have a higher tax component for the cash fare.
What fares have a higher tax component? Putting aside the excise tax (7.5% of base fare) and September 11 Security fee, there are two tax amounts that are dependent on the number of layovers or stopovers you have. They are a Segment Fee tax ($4.10 per takeoff and landing), and a Passenger Facility Charge ($4.50 per plane boarding). A nonstop flight itinerary would incur $8.60 in these taxes, a direct flight (one-stop, no plane change) would incur $12.70 in taxes, and a one-transfer flight with a layover would incur $17.20 in taxes. These seemingly trivial taxes and fees quickly add up, and for a very low cost ticket (e.g. $50), the taxes make up a significant portion of the cash price, and can start affecting redemption rates quite significantly. Regardless of whether it is nonstop, direct or a layover itinerary, Southwest will price the rewards ticket price without taking into account these tax differentials.
What does this mean for you? First, you will get the best redemptions on shorter, lower cost flights since base fares are variable while taxes are fixed. Nobody likes layovers, but if you have to include one, you will receive a better redemption rate compared to nonstop flights.
Rapid Rewards redemptions for Wanna Get Away fares are refundable
Wanna Get Away fares paid for in cash are not refundable and unused funds will expire within a year. Wanna Get Away Rapid Rewards redemptions are, however, fully refundable, at least in the sense that they are returned to your account and do not expire (as long as your account stays active). Additionally, if you fail to cancel a Wanna Get Away fare paid for in cash at least 10 minutes prior to scheduled flight departure, you will not be able to reclaim the unused funds. Wanna Get Away Rapid Rewards redemptions, on the other hand, are not subject to this rule, and you will therefore not risk losing the value of your ticket, even if you completely forget to cancel your flight.
This additional flexibility of using points to book Wanna Get Away fares certainly adds some tangible value, albeit more difficult to quantify.