[HN Gopher] Brex Devalues Rewards
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Brex Devalues Rewards
Author : lxm
Score : 111 points
Date : 2023-03-12 15:23 UTC (7 hours ago)
(HTM) web link (awardwallet.com)
(TXT) w3m dump (awardwallet.com)
| capableweb wrote:
| Two days after "Emergency bridge loan for SVB customers" offered
| by Brex: https://www.brex.com/svb-emergency-line -
| https://news.ycombinator.com/item?id=35102196
|
| ~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
| kvee wrote:
| So what's the best thing to do with lots of Brex rewards now?
| cj wrote:
| FWIW - this is extremely common among other credit card point
| systems. Including airline miles, etc.
|
| Not sure if this is really news or if it's just another credit
| card company doing what credit card companies do.
| tempsy wrote:
| no it isn't. my chase, amex, cap 1 points transfers to the
| exact same airlines as Brex at 1:1 ratio and always has
|
| 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
| throwaheyy wrote:
| Capital One actually got _better_ -- they used to be 2:1.5
| before improving to 1:1, as well as adding more transfer
| options.
| CPLX wrote:
| It's not really.
|
| 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.
| TedDoesntTalk wrote:
| The name is too similar to Brexit. Too confusing. Why would they
| choose such a name?
| a13n wrote:
| Welp time to switch corporate credit card providers.
| magold wrote:
| With Ramp, cashback is the only reward option, no gimmicks
| subject to devaluation. Ramp offers fixed 1.5% cashback on
| statement balances, and there's no spend requirement before it
| kicks in. Much better way to go.
| aftbit wrote:
| I hope Ramp is ready for the massive influx in signups that
| this will result in. We're considering moving our spend
| entirely to them because of this change.
| fairity wrote:
| If I'm understanding this correctly, they're only devaluing
| points when you redeem them for cash or transfer them to another
| points system. In so doing, they're effectively creating lock-in
| for their own points redemption programs.
|
| 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.
| itake wrote:
| Every time I've used a platform OTA, the prices were way higher
| and less choices (even with the point discount) than I could
| purchase on another OTA.
|
| I never considered platform OTAs a reasonable option.
| sanj wrote:
| They're all just white-labeled Expedia.
| slater wrote:
| Or BDC
| CobaltFire wrote:
| I used AMEX via ANA transfer to get over $0.20/point value on
| a pair of business class tickets from West Coast US to Japan
| this last year.
|
| I'd say that was good value.
| ValentineC wrote:
| > _I used AMEX via ANA transfer to get over $0.20 /point
| value on a pair of business class tickets from West Coast
| US to Japan this last year._
|
| 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.
| CobaltFire wrote:
| I probably would have bought the $1250 tickets instead of
| the $5k tickets, but we certainly appreciated the
| upgrade.
|
| It's what I have the cards for, after all.
| scarface74 wrote:
| As someone who has an idea about transfer partners.
|
| 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.
| CobaltFire wrote:
| This was an arbitrary date and the transfer took less
| than 30 minutes.
|
| 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.
| CPLX wrote:
| There are good ones. Chase Sapphire is an example, and I
| think people like Amex too though I don't use it.
| mvid wrote:
| Correct. Chase and Amex use the prices from the airline.
| They aren't as good as the scammy aggregators, which try to
| upsell you further in the purchase process or tell you the
| price is no longer available
| TedDoesntTalk wrote:
| Don't they have more blackout dates than the airlines?
| atdrummond wrote:
| For fare sales or awards?
|
| 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.
| scarface74 wrote:
| There are no good travel portals. If you need to change
| anything or if there are any issues, going through a portal
| is alway a pain compared to booking directly.
|
| 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
| CPLX wrote:
| Yes that's the consensus. It was a tool to drive new accounts
| and now they don't need that tool.
|
| 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.
| paxys wrote:
| > 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.
|
| 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.
| fairity wrote:
| Brex isn't a bank. They partner with a dozen or so banks
| including JPMorgan (https://www.brex.com/legal/brex-cash-
| partner-banks).
|
| 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.
| paxys wrote:
| Tweeting "we will help startups affected by SVB" is very
| different from announcing major policy changes in your own
| operations.
| tempsy wrote:
| there was no announcement it was unannounced
|
| 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.
| btown wrote:
| There's a third possibility: "get our rewards terms stable
| and sustainable _before_ we have a massive influx in new
| accounts so we don 't shock the new accounts by clawing
| things back any time soon."
|
| 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.
| bushbaba wrote:
| Would not be surprising if Brex had insider information
| from connections/advisors who were executives at SVB.
| drstewart wrote:
| You think they planned, executed, and released this change in
| under 48 hours, mostly over a weekend?
| mateo- wrote:
| based on headlines, it looks like they've been working all
| weekend
| [deleted]
| teaearlgraycold wrote:
| You know it's easy to have a change staged and only pull the
| trigger at the right moment, right?
| drstewart wrote:
| So they had the change staged and were waiting on the off
| chance a bank collapsed?
| teaearlgraycold wrote:
| Waiting for any big news. Maybe waiting for a specific
| known event in the future but pulled the trigger early.
|
| Or it's just a coincidence.
| throwaheyy wrote:
| Yes. It would just be a constant in the code somewhere.
| tempsy wrote:
| ...how else are you supposed to use your rewards outside of
| cash redemption or airline transfer
|
| airline transfer is generally the best ROI way to use credit
| card points so this is a massive unannounced devaluation by any
| measure
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(page generated 2023-03-12 23:01 UTC)