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Joe wrote in detail recently about why transferring TopCashback credit to Avios might no longer make much sense from a ‘value’ perspective.
The crux of the argument made was that transferring TopCashback credit to Avios is the equivalent of buying Avios for 0.95p, and that while that is a reasonable deal in itself, better options exist. If you take the credit as cash instead and then use that to buy more valuable types of Miles cheaply (via one of the regular SPG Starpoints discount offers), you can often do more luxury flying for less money than if you transferred to Avios.
He also went on to mention that you can potentially do even better by transferring cashback credit to Zeek rather than simply taking the cash. Zeek is a gift card reseller with a huge range of options that you can choose to spend your credit on. The standard transfer bonus from TopCashback to Zeek is 15% and the gift cards sold on Zeek are also discounted, though for the most popular/’cash-like’ options (supermarkets etc) it tends to only be 1%-5%.
Until 1st April 2018, the transfer bonus is boosted to 20% – which makes things very interesting if you normally transfer TopCashback credit to Avios.
For example, £1 of TopCashback credit could either get you 105 Avios, or £1.20 in Zeek credit. Even if the gift cards for the retailer you actually want/need to buy from only offer an additional 1% discount, you’re looking at getting £1.21+ in value by transferring your £1 TopCashback credit to Zeek (assuming you only purchase things you’d definitely be buying anyway!).
£1.21 is therefore the ‘real cost’ of opting to take the 105 Avios instead. At that rate, the Avios would really be costing ~1.15p each, not ~0.95p.
Given that our rule of thumb valuation of Avios is about 1p each, buying at an effective 1.15p+ rate is expensive, particularly when Groupon offers regular opportunities to stock up on Avios for considerably less.
Transferring TopCashback credit to Avios isn’t a bad deal in its own right, but when you look at the alternative options, the situation is more complicated. With the temporarily boosted 20% transfer bonus to Zeek now available, I think that’s where I’ll be sending my cashback this week.
What do you think – Is transferring to Zeek great value or would you rather just stick with Avios?