If you read my tips on travel, you know that I am big on reward and loyalty programs. Between mileage plans and credit card rewards it’s pretty easy to get 1-3% of every dollar you spend “back” in points / what have you. But not all points or miles are created equal; there value is often subject to devaluation and what you can get with those points or miles changes over time. This post is about one of the more fringe point programs: My Coke Rewards.
|Points||Retail Cost||Point Value|
|20oz Coke||30||$0.99 to $1.49||$0.033 to $0.0496|
|Live Nation $10 Gift Card||$10||$0.10|
|Swarovski $30 Gift Card||$30||$0.40|
|Fitness Magazine (1 Year)||133||$5||$0.038|
|Bon Appetit Magazine (1 Year)||250||$15||$0.06|
|Restaurant.com $50 Gift Card||600||$50||$0.08|
|Nike $50 Gift Card||2000||$50||$0.025|
As you can see the value of reward points ranges widely from $0.025 (or less) to $0.40 (or more). The is that it is very hard to value them, because many items are hard to value. What exactly is an American Idol cup coaster worth? How about a no-name set of wireless headphones?
LBYM!: Part of living below your means is getting the most value possible for your money or in this case points. Let’s say I really wanted to buy both Fitness Magazine and Bon Appetit and I like to go out to eat a lot. I would probably get the Restaurant.com gift card for $0.08 a point and pay cash for the magazines (Or would I – see below).
Why is there such a wide range of values placed on points? This usually has to do with the arrangements made between the individual companies and Coca-cola. It also has a lot to do with how over-priced or fungable the money is to each retailer. Rest assured, that the odds are the amount of money Cola-cola gives to each retailer is approximately the same, it is probably something like $0.02 a point or less. This means the “play” in the value largely comes from the individual companies. For example, if Swarovski is willing to take get $0.60 from Coca-cola for a $30 gift card you know they probably have decent margins on their products. The cheapest thing I can find one their site is $45, so at a minimum they will get $15.60 from you, for an item that may only cost them $5.
Restaurant.com is another great example on the fungibility of certificate price. How much is a $50 gift card worth, when they often have coupons and promo codes for 25% to 80% off the face value of a certification?
There are also a bunch of hard-to-value deals. Sweepstakes entries, Coke swag, charity donations, etc. These are hard to value and that is probably to Coca-cola’s advantage. What exactly is 35 points to the Special Olympics worth? There are also a lot of ads and promotions on their site, so the actual value a retailer gets may be fungable as well… sure they only get $0.01 a point, but they are getting lots of web traffic, or a sale they may not of gotten otherwise.
To bring this all home, my estimate is that a Coke Reward point is worth about $0.03 to the average Joe and probably about $0.015 to the average retailer. So this is not actually a bad deal, assuming you can find something you actually want from their catalog. Combine this with the $0.01 per dollar you get back on your credit card, that $0.99 coke may actually only “cost” you $0.92.
For more information be sure to see the Wikipedia article for history and other thoughts on valuation.
You should also consider looking at the My Coke Reward (MCR) main thread over at Flyer Talk.
This posting is provided “AS IS” with no warranties, and confers no rights.