Skip to main content

Pikt

Reward router

Get started free

Glossary · Rewards

Cash-Equivalent Value

Cash-equivalent value is the dollar amount a points or miles balance is worth at a chosen redemption rate, used to compare reward currencies against plain cash back.

One point is not one cent. Transferable points can be worth more than 1¢ when redeemed for travel and less when taken as cash. A consistent cash-equivalent rate makes comparisons fair.

Pikt's Unified Valuation Model assigns each currency a cents-per-unit rate and reports earnings in cash-equivalent dollars so a 4× points purchase and a 3% cash-back purchase can be ranked head to head.

Related terms

  • Unified Valuation Model (UVM) — The Unified Valuation Model converts every card's points, miles, and cash back into a single cash-equivalent dollar figure so different reward currencies can be compared on one scale.
  • Category Multiplier — A category multiplier is the rate at which a card earns rewards in a given spending category — e.g. 4× points on dining or 6% back at U.S. supermarkets.