Groupon Rewards: Best Return on Investment

This week I learned that Delta Airlines SkyMiles Shopping is teamed with Groupon to offer miles per dollar spent. The standard rate through Delta is 5 miles per $1; however, their current promotion has been stepped up to 7 miles per $1.

Then I figured out American Airlines, through their own AAdvantage eShopping Mall, will give you 8 miles per $1. I am assuming some of the other airlines have also teamed up with Groupon to offer miles per dollar spent, but I have not expounded effort to search for others.

My go-to shopping portal I go to every time I shop Groupon is Discover Card. Using my Discover Card card and by using Shop Discover, I get 15% cash back, on each statement. Occasionally they will bump it up to 20%, sweetening the deal even more. My Discover Miles card only gives me double miles by shopping Groupon, so I have always felt the better option was to get the cash back through my Discover Card card. (In my example below, $3.75 in cash savings is more valuable to me than the 50 Discover Miles I would receive).

I wanted to prove to myself I was getting the best deal with my Discover Card card cash back, so I ran a typical example. Lets assume I spend $25 on Groupon. Using my Discover Card card, I would receive $3.75 cash back, bringing my total purchase cost down to $21.25.

Now lets assume I decided to link through Delta or American Airlines to get miles instead of cash back. My same $25 purchase through Delta or American would currently net me 175 or 200 miles, respectively. The question though is how much do those miles cost me each, and which is the better deal, miles or cash back?

I think the best way to compare this would be the cash back savings divided my the miles. If I am looking at this calculation wrong, please let me know. My Discover Card cash back would be $3.75. Therefore, the current Delta and American promotions would cost me $0.0214/mile ($3.75/175 miles) or $0.01875/mile ($3.75/200 miles) respectively. Anything under $0.02/mile I would say is pretty good, although there surely is better bets with your money.

If you are trying to keep one of your airline mile programs from expiring, then shopping through their referral portals is certainly a viable option. In my situation, unless the number of miles/dollar increases to around 10 miles per dollar spent, I will probably stick with my 15-20% cash back through the Discover Card card.

If you are not yet a member of Groupon, please use my referral link here. Thanks!