Brex Devalues Rewards
awardwallet.com
awardwallet.com
~8 months after "[Brex will] no longer offer services to the small business market" - https://www.brex.com/support/why-am-i-no-longer-qualified-to... - https://news.ycombinator.com/item?id=31772211
Further context, Brex is a YC company (Winter 2017), their launch post is here: https://news.ycombinator.com/item?id=17418813 "Launch HN: Brex (YC W17) – Corporate Credit Card for Startups" | 183 points | June 28, 2018 | 126 comments
The cynical part of me wonders if they timed this change to coincide with the SVB debacle in the hopes that the negative PR would be drowned out.
Or it’s just a coincidence.
I never considered platform OTAs a reasonable option.
If anything, I find it is the opposite. The US Big 3 have very little inventory open - and what is open is super expensive. (Let’s say $10k worth of airline miles for sake of argument.)
You’re better off using CC points for tickets through the card’s OTA where you can get the above $10k itinerary for $2k worth of points - and since the value per point is known and fixed, this price is never a surprise.
Amex in particular for domestic flights have Delta and JetBlue as a partner. You get much better value by transferring to one of those two than booking through a portal.
You will only get 1 cent per point by using the portal. You can routinely get 1.2 - 1.5 cents per point for Skymiles
I’d say that was good value.
There is a huge difference between being able to book a flight on a random day from a random place to a random destination and just choose to pay with miles like I can do on any random Delta domestic flight for 1.3 - 1.5 cpp and having to deal with partners and waiting for award flights to open up and then only on certain days and from certain cities.
It was my first time using it and it was about as painless as I could have hoped for.
I will say that we mostly only fly to a couple places and we mostly fly ANA, so we are an edge case.
In that case, I take back everything I stand corrected.
The ANA flights in these cases were Star Alliance operated long haul legs paired with shorter ANA operated legs, and we got to see both the older and newer business class for Delta (typical for most routes; we aren't where ANA runs their specific long haul). Newer is MUCH nicer.
Would you have paid anything close to the cash price though?
If not, the $0.20/point value seems to be more of an arbitrary number often abused by bloggers.
It's what I have the cards for, after all.
It’s all about perspective.
For instance, my wife and I end up doing the MCO <-> ATL route a few times a year. We live in Orlando and our family/friends are in ATL.
(Don’t quote me on the exact numbers. I found something similar when I looked a couple of months ago)
I could fly main cabin for 13,000 miles one way and get around 1.3 cpp on Delta Main cabin. Alternatively, I was able to find a Delta flight booked through Virgin Atlantic for 18000 miles first class where I would get 1.7 cpp.
The value chasers would have chosen Virgin Atlantic. I fly Main anyway and it wasn’t worth the extra 5000 points.
While 5000 points is only worth about $75, even with my best earning Amex Point categories - groceries and dining at 4x on the Gold - I would still need to spend $1250 to recoup those points.
Also, the standard issue with booking through partners is that only a limited number of award bookings are open and usually first class. I could find multiple flights on any given day on Delta. I could find only one during the week on Virgin Atlantic.
The fact that it’s wildly unethical to do it this way without notice is something I guess they feel isn’t important to them.
Not a good look for someone in the financial services business.
I was a client up until last year but I closed my account because they seemed shady.
Being in the news for any reason is the last thing a bank wants right now. With startups and the public so much on edge, a simple "omg look at this, Brex is in trouble" tweet can be enough to cause them serious harm.
My guess is the exact opposite – the announcement was pre-planned and they went ahead with it, but some middle manager is going to be getting an earful for not delaying it until the sector is out of the woods.
And, it's clear keeping out of the news was not their strategy this weekend bc the CEO has voluntarily been making public statements in a successful attempt to drive account signups.
I have a feeling Brex was quite prepared for this whole thing to play out. With the degree of polish on https://www.brex.com/svb-emergency-line, and the ability to double in a single weekend the number of banks they spread deposits into... whether it was simply because their own analysts saw this happening at some point and had a proactive play-by-play of what to do, or something more coordinated with the VCs advising their companies to move their funds to Brex, is something that I'm sure will be of interest to many in the industry.
generally you do not devalue a program without at least a few weeks or months of notice.
very anti customer and not surprised if it leaves bad taste for existing customers. that alone leads me to think it was an immediate reaction to a significant inflow of deposits and new business. these rewards programs are extremely expensive to run.
airline transfer is generally the best ROI way to use credit card points so this is a massive unannounced devaluation by any measure
Not sure if this is really news or if it’s just another credit card company doing what credit card companies do.
They do devaluations no question about that. But a zero notice change in the ratio of transfer points would be unusual and definitely cause a lot of screaming.
It’s not an ethical thing to do. If you tell me I can do X that helps you and then you’ll give me Y you can’t just change that.
Devaluing with a little notice is a different thing entirely. Even short notice is dubious but defensible.
This not so much. Of course the only thing it will do is cause people never to trust their rewards programs, giving them further rationale to ditch them.
the airlines and hotel programs do change and devalue their programs from time to time but not the credit cards that offers transfers to these programs
American Express - Amex Brazilian Express - Brex