Rewards redemption options when a relative dies

Despite tough written rules, rewards programs offer redemption flexibility

Cashing In with Tony Mecia

Tony Mecia is a business journalist who writes for a number of trade and general-interest publications. Every week, he answers readers’ questions about credit card rewards programs in his “Cashing In” column.

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What options do I have to redeem my deceased father's rewards points?

When it comes to disposition of points and miles at death, the terms and conditions of most major rewards programs state that points “are not the property of the cardholder” and “have no cash value.”

In practice, however, most card companies and rewards programs allow heirs or executors to transfer the points or somehow glean some value from them.

Expert Q&A

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Dear Cashing In,

My dad passed away and, as executor of the estate, I came across his Chase Sapphire Ultimate Rewards.

I called them to inquire about closing the account and how I go about transferring the 250,000 points he had accrued.

The woman seemed nice and advised me that the points would be sent to his estate at a dollar per point minus any balance on the account. Needless to say, my husband and I were floored, as this would be more then $250,000.

I am a bit suspicious since the representative didn’t ask me for anything, not even a death certificate or his estate information. She said she would take care of it and it would take 30-60 days. So, I guess my question is whether this could be possible, and is there any advice you can give me on how I can protect my interests with this situation so I’m not fooled into giving up our rights to those funds. – Brenda

Dear Brenda,

I’m sorry for the loss of your father. Certainly, as executor, you have a lot to do with settling his estate.

Increasingly these days, one of the tasks executors are called to deal with is the disposition of reward points and miles – not one of the weightiest issues, but one that does have some value.

See related: 6 steps to take when a credit card holder dies

Terms and conditions on deceased cardholder rewards

When it comes to disposition of points and miles at death, the terms and conditions of most major programs don’t sound encouraging.

They typically say that points have no cash value and are not actually the property of the account owner because they belong to the rewards program.

For instance, the terms and conditions on the Chase Ultimate Rewards program you mention clearly state: “Points earned are not the property of the Cardholder and … have no cash value.”

Even more discouragingly, they say: “Any points accrued shall be permanently forfeited if your Account has been closed, or upon the Cardholder’s death.”

Transferring deceased cardholder rewards

Sounds pretty bleak, right? But in practice, most card companies and awards programs actually show compassion and allow you to transfer the points or somehow glean some value from them.

Suspecting that was the case, I contacted Chase and asked what the options for heirs are when a cardholder passes away.

This is what happens to Ultimate Rewards points once Chase confirms the death of a cardholder, according to Chase spokeswoman Mary Jane Rogers:

  • The bank automatically redeems the available points for their cash equivalent, subtracts any balance on the account, and mails a check to the estate.
  • The entire process can take 30 to 60 days.

It is possible that Chase didn’t request any documentation from you because it was able to confirm your dad’s death using other methods.

Rewards points value in cash

However, the value you cite is incorrect, as you suspected. The correct value is 1 cent per point – or $2,500 if your father had 250,000 points – minus any balance.

Rogers offered to place you in touch with somebody at Chase who could help you or answer any additional questions if you want.

Note that this rate of 1 cent per point is the same cash back rate that is available to holders of Chase cards with Ultimate Rewards: 1 percent back.

Most people don’t redeem Chase points for cash because other uses have a higher value, such as travel – worth up to 1.5 cents per point – or transferring to hotel or airline partners, which can yield even higher values.

Tip

Tip: Transferring rewards points to the card program's airline or hotel partners can increase their redemption value. Rewards programs that have transfer partners with potentially higher rewards point redemption value include American Express Membership Rewards and Chase Ultimate Rewards.

Better options for redeeming deceased cardholder points

Chase didn’t mention this, but there is another option available before notifying reward programs of a cardholder’s death.

  • If you happen to have the decedent’s passwords, you could log on and redeem those points in ways that have a higher value than 1 percent back.
  • One way to do so is transferring points to one of the rewards programs’ travel partners. In this case, Chase Ultimate Rewards has nine airline and four hotel partners.
  • Depending on the partner, transferred Chase Ultimate Rewards points can have a value of up to 2.29 cents per point. 
  • Please note that you would also need to have access to the decedent’s loyalty program account in order to redeem such transferred points. 
  • The bank will likely not object, but be sure that you are entitled to use those points to avoid conflicts with other heirs, or at least disclose that redemption to the executor to avoid any legal issues.

Other rewards programs sometimes allow you to transfer points to heirs, spouses or authorized users, so those options can be available, too – just not with Chase.


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Updated: 09-26-2018