Robert D. Gibb is posting a stunning series of articles on Air Miles on the forum. I found the series very useful and enlightening so I’m posting it on the blog as well.

Robert D. Gibb is a Contributing Editor (DRIPs) at the Canadian MoneySaver Magazine. You can read his articles at CanadianMoneySaver.ca. Here’s one of his most recent articles.

Thanks Robert 🙂

Based on my recent post on the “Buy 5 Get 50 Air Miles” this week at Safeway there’s been some interest after the post was placed on the Blog.

There were several questions and I spent a good hour composing a post answering them in depth. Not realizing I had to include my e-mail it was lost into hyperspace.

So I recomposed (and we all know how painful that can be) a shorter reply, filled in all the boxes and it seems to have disappeared as well. Ah! the mysteries of the Internet.

So I’m going to post several threads (over several days) on the forum instead regarding Air Miles. The first will explain my logic (insert your own joke here!) at deriving a value of $0.12/AM.

I know many people use a “dollars spent per Air Mile system” to derive value. E.g. 2 products in the same 10 Get 50 offer but with different prices: A = $2 B = $4

$20 of A gets 50 AMs while it takes $40 of B.

Clearly A accumulates AMs quicker.

But what if item B is what you use and it’s on sale while perhaps item is something you rarely use? It’s something to consider.

However, I also think it’s important to know what an AM can get you. This is where I place a value of $0.12/AM.

How this is derived:

(Note: the value of an AM can be much higher than this but I’ll explain later.)

To value an AM use this formula:

Total Cost of Item/Number of AMs = Value/AM

Methodology:

A. Air Miles produces a catalogue. I’ve taken this on ocassion to Zellers, Wal-Mart & London Drugs to get shelf prices. Using the formula above commonly produces a value of around $0.12/AM on physical items.

B. Gift Cards. Air Miles now offers affiliate gift cards, e.g. Chapters,etc. Divide the value of the card by the number of Air Miles to purchase it and it usually comes in around $0.12/AM

Not a gift card but an example of something I use:

$20 Shell Coupon requires 175 Air Miles

$20/175 = 11.43 cents/AM

So my experience is that most physical item exchanges come in around $0.12, however, the value can be higher.

Magazines subscriptions tend to come in around $0.14 – $0.18/AM.

“City Passes” for sightseeing come in around $0.25 or higher I recall.

One of the better value items is the 2 for 1 movie pass (Sunday – Thursday). A full pass for 2 is 175 AMs and includes 2 pop and a small popcorn I recall. However, the 2 for 1 is only 25 AMs. If you value 1 movie ticket at $8 – $10 then following the formula above each AM is worth $0.32 – $0.40. (My wife and I buy the candy & pop at the London Drugs before the movie!

So while it’s good to know which items accumulate AMs faster it’s also nice to know the value of just what those AMs can get you.

Robert D. Gibb