Maybank has brought back its popular TreatsPoints Fair, held over the weekend. The response has been overwhelming, which is no surprise given the recent TreatsPoints capping on airline miles conversion fiasco a few months ago. For those unaware, here's a quick recap of what happened.
Maybank had announced a capping on the monthly conversion of TreatsPoints to airline miles. Shortly after, they also devalued the conversion rates, sending cardholders into a frenzy to convert their TreatsPoints as quickly as possible.
Unfortunately, with the new caps in place, many were unable to do so, leaving them frustrated. I previously posted an article detailing the right strategy to overcome this fiasco, so be sure to check it out if you haven't done so.
Given the situation, it's no surprise that this TreatsPoints Fair was extremely crowded, as many cardholders are looking to burn their TreatsPoints in favor of good deals, especially since they won't be able to convert them to airline miles for several more months.
If you ask me personally, most of these conversions aren't very worthwhile. In fact, I’d argue that this TreatsPoints Fair was a strategic move by Maybank to encourage higher TreatsPoints burn on lower-value items or services that would otherwise yield a smaller profit margin for the bank.
Nevertheless, I do want to ensure that Refined Points readers can distinguish properly between good deals, bad deals, and terrible deals.
For example, you definitely do not want to burn 1.5 million TreatsPoints on a return economy class ticket to London, especially not on Malaysia Airlines!
The Liability of Bank Points on Balance Sheets
For those unaware, bank points like TreatsPoints are considered a liability on a bank's balance sheet. But what does that really mean? In accounting terms, a liability is something that a company owes and will need to settle in the future. When you earn points through your spending, the bank essentially promises you future rewards, which translates into an obligation or a debt they need to fulfill.
This liability exists because every point you accumulate can be redeemed for something of value, whether it’s merchandise, gift cards, or airline miles. When a large number of points remain outstanding, the bank faces the risk of a significant payout or expense when those points are redeemed, impacting its financial health.
From the bank’s perspective, minimizing this liability is crucial. The longer points remain unredeemed, the more they represent a looming obligation. However, when points are redeemed, especially on items that offer lower value or less costly rewards for the bank, the liability is cleared at a lower expense, improving the bank’s profit margins.
Moreover, banks prefer customers to redeem points for non-travel rewards, such as merchandise or vouchers, which often cost them far less than converting points to airline miles.
When points expire without being used, the bank avoids having to settle that liability altogether, which is the most favorable outcome for their bottom line. This is why you’ll notice banks pushing promotions like the TreatsPoints Fair—encouraging you to burn points on lower-value items rather than letting them sit in your account or converting them into more expensive rewards like airline miles.
Final Thoughts
Navigating the world of loyalty points can be tricky, especially when banks employ strategies to minimize their own costs. The TreatsPoints Fair is a perfect example of this, where Maybank is guiding customers toward less favorable redemptions.
As savvy points collectors, it’s crucial to recognize when a deal is genuinely beneficial and when it’s more of a trap to clear out liabilities at your expense.
Remember, not all redemptions are created equal. While it’s tempting to use your points just because they’re there, ensure that you’re getting the best possible value for your hard-earned points. And above all, avoid falling into the trap of redeeming for something that doesn’t truly meet your travel or financial goals.
It’s almost amusing to see that Maybank’s credit cards are still attracting a strong response and signups, even after the recent devaluation and the poor redemption rates. But hey, that’s the way the game works, right? For airline miles connoisseurs like us to come out ahead, someone else has to pay the price. It’s a bit harsh, but it’s the reality of the situation.
The same goes for the HSBC TravelOne Mastercard, which has been wildly popular despite its poor accrual rates. So, while others jump on the bandwagon without fully understanding the value—or lack thereof—we’ll just sit back and keep playing the game smarter.
