Update: Book Southwest tickets by Sunday, 03/30, to lock in lower rates before they are devalued. You can always cancel for free later on if you need to. Note that you can still transfer Southwest points to Airtran or to the old Southwest program (as described below) which isn’t being devalued.
Originally posted on 09/23/13:
Apparently Southwest realized that their program might be a bit too generous. Effective for tickets purchased on 03/31/14 you’ll need 70 points per dollar instead of 60 points per dollar.
What does that mean?
The ticket pictured below is $48 plus tax. 48×60=2,880 which is the amount of points that you need now.
When you book an award the tax goes down to just $2.50 per leg, so in this case you can either pay $58.90 or 2,880 points plus $2.50. So 2,880 points saves you $56.40 or a value of 1.96 cents per point. If you have the annual companion pass then 2,880 points will save you $112.80 or a value of 3.92 cents per point.
Starting on 03/31/14 this ticket would need 48×70=3,360 points. So 3,360 points saves you $56.40 or a value of 1.68 cents per point. If you have the annual companion pass then 3,360 points will save you $112.80 or a value of 3.08 cents per point. That a 14.3% devaluation (2,880/3,360) though you can lock in future travel by just booking before 03/31.
The exact value per point will vary based on the route.
You will still be able to redeem points for gift cards for hundreds of stores a 1 cent per point to 50K points=$500 gift card.
You can also transfer 19,200 Southwest points to Airtran where they will be enough for 2 one-way flights or 4 business class upgrades. From Airtran they can be transferred back into Southwest’s old program where they can also be used for a free round-trip. However the Airtran and old Southwest program are subject to capacity controls while the new program has no capacity controls.
And of course you can still cancel and change awards for free, something that can set you back hundreds of dollar with other programs. And you still get 2 free checked bags per person.