You are currently viewing The refundable hotel trick: ultimate guide

As you probably know by now, the world of travel rewards can be very counter-intuitive. There are lots of ways to maximize the value of your travel rewards that can seem strange. Among many other examples, the refundable hotel trick shows that by knowing the pro tips, you can gain more flexibility with your rewards and make at least some parts of your rewards strategy a lot simpler. 

I’ll soon be sharing lots more of the pro tips I’ve learned over the last 10+ years in the world of travel rewards, so make sure to sign up for our free travel rewards-specific newsletter. 

Here’s everything you need about the refundable hotel trick and how to make it work for you.


Overview of the refundable hotel trick

While lots of travel rewards tips and tricks can be very complicated, the refundable hotel trick is really very simple:

  • You book and pay for a fully refundable hotel room for a future date
  • You can achieve 1 of 3 goals (circumventing a few different rules to have more flexibility)
  • You cancel and get a full refund for your hotel once your goal is achieved

So the process is simple, but why would you want to book a hotel room and then cancel the reservation? 

There are 3 main reasons why you might want to use the refundable hotel trick:

  • Extend your deadline for your minimum spend
  • Cash-out travel credits
  • Redeem points at a better value


Details of the refundable hotel trick

Let’s look at all 3 goals more closely.


Extend your deadline for your minimum spend with the refundable hotel trick

The most common way to use the refundable hotel trick is to help you meet minimum spend requirements for your welcome bonuses (because welcome bonuses are the key).

To be clear, the refundable hotel trick does not lower the minimum spend amount: it just extends the deadline for you to reach it. To make it easier to spread your spending over a longer period.

Almost all credit cards have minimum spend requirements to unlock the welcome bonus.

For example, an amazing card for many travelers right now is the National Bank World Elite Mastercard. It has a minimum spend requirement of $5,000 in the first 3 months, which is higher than most. If you reach this amount, you’ll get ≈ $750 for free (in total, with the main part of the welcome bonus and the credits). 

But it can be tough for many people to reach this in just 3 months, even though it’s the equivalent of just ≈ $385 per week — even with our 4 other pro tips.

You never want to spend more just to get rewards, the whole point of travel rewards is to get more value! That means getting the most rewards for the least amount of spending. That’s why welcome bonuses are great; the National Bank World Elite Mastercard’s welcome bonus gives you a whopping ≈ 15% back on that $5,000 (≈ $750 in net value)! A little better than 1% or 2%, right?

So rather than only taking advantage of offers that have lower minimum spend requirements (and therefore often get fewer rewards and have fewer options), you can use the refundable hotel trick. 

Here’s a step-by-step guide:

  • Find a hotel that is 100% refundable if you cancel in advance (always read the policy carefully to know the deadline and set a reminder) 
  • Book a hotel stay that will help you reach the minimum spend 
  • Make sure the reservation is for several months away 
  • Pay for the room at the time of booking 
  • Get your welcome bonus because you’ve reached the minimum spend
  • Spend the amount needed to “replace” the hotel booking amount after
  • Cancel your hotel reservation and get a refund

Remember: You must not cancel your hotel reservation before you’ve reached the minimum spend requirement with your other “real” spending. 

If you dip under the minimum amount after the welcome bonus deadline has passed (by getting a refund for the hotel), the bank will claw back the points from the welcome bonus.

The deal with welcome bonuses is simple: spend X amount and you’ll get hundreds of dollars. That’s it. If you don’t spend that amount, no welcome bonus.

Here’s a concrete example. Let’s say your minimum spend amount was $5,000. You were short $500, so you booked a $500 refundable hotel stay. You need to spend another $500 in “real” purchases before you cancel and get a refund for the hotel, so that the amount you spend always stays over the $5,000 requirement to get the welcome bonus.

In other words, you still have to reach the minimum spend amount with actual “real” purchases. Using the refundable hotel trick will only give you more time to do it!

Of course, the downside is that you need to have the money to pay for the booking cost in the initial deadline period. Always paying everything in full is literally the only rule for travel rewards. 

But this is a great way to secure the points without necessarily spending the cash on unnecessary expenses right away.

It might seem complicated, but it can sometimes be worth it for huge welcome bonuses that require more spending. For example, The Platinum Card from American Express has literally the best benefit out there: unlimited airport lounge access worldwide! And it gives you a welcome bonus with a net value of ≈ $814! That’s huge.

But it requires a minimum spend of $7,500 in 3 months. Amex “business” cards also have similarly high spending requirements, but since you don’t need a business to get them and they often have massive welcome bonuses, the refundable hotel trick can be helpful for those as well.


Cash-out travel credits with the refundable hotel trick

Another great way to use the refundable hotel trick is to cash out travel credits. 

That means turning travel credits — which are less liquid and more restrictive — into actual cash, to offset the annual fee in a simpler way for example.

Some credit cards come with a travel credit as a benefit.

The 3 most popular ones are:

The refundable hotel trick works with all 3. 

With Amex, the credit has to be used through the Amex Travel booking service, which is pretty restrictive. That’s because no booking site can ever have the lowest prices all the time (which is why the single most important thing to do when booking travel is to compare), not all flights and hotels are on Amex Travel, and the credit also has to be used up all at once.

With HSBC, the credit can be used for any travel expense and can be applied to several expenses rather than just one. That’s really not as restrictive, but you might still prefer to apply your $100 to something other than travel at one particular point in time.

So, booking a refundable hotel is a great way to cash out those travel credits.

Here’s a step-by-step guide:

  • Find a hotel that is 100% refundable if you cancel in advance (always read the policy carefully to know the deadline and set a reminder) 
  • Book a hotel stay and apply the travel credit to it (a hotel on Amex Travel for Amex; any hotel for HSBC)
  • Once your credit has been processed, cancel your reservation and you’ll have cashed out the travel credit
  • The credit applies to your statement and effectively reduces the annual fee right away in a simpler way

Getting a refund means the travel credit is now a regular statement credit, and you’ve cashed it out without any special restrictions or requirements.

And you don’t lose value most importantly, because the credit has a fixed value (unlike the best types of rewards points). In fact, with Amex credits, you’re even gaining value often, since you no longer need to book a flight or hotel with Amex Travel, which sometimes charges more than other sites (as is the case for all booking websites once again).

Here’s a concrete example. If you apply your Amex Platinum Card’s $200 travel credit to a $300 refundable hotel on Amex Travel, you’ve only spent $100. When you get refunded for the hotel, a $300 credit appears on your statement. So the $200 travel credit has been cashed out and is simply a statement credit, instead of a travel credit you have to use via Amex Travel.

Very easy and a great way to make maximizing that benefit easy. 


Redeem points at a better value with the refundable hotel trick

Don’t read this part if you want to maximize the value of your rewards. A very basic tip for travel rewards is to always use rewards for travel. It almost always gives you more value.

But if you sadly want to use points for something other than travel, you can at least use the same refundable hotel trick to get better value.

Why is this not recommended as opposed to the 2nd method for travel credits? What is the difference?

It’s very important to understand this, it’s the basis of travel rewards: cashing out the credit does not make you lose value. Travel credit has a fixed value, it can’t change. So you’re not losing value, there is no opportunity cost with cashing out the credit.

Points, on the other hand, often have a variable value and the most valuable uses are almost always for travel!

So this refundable hotel trick used to work well with Scene+ points (from Scotiabank-issued cards) and American Express Membership Rewards points (from Amex-issued cards), but Amex has changed. 

Now it’s especially good for Scotia, which is useful as they often offer a lot of points, like 56 000 points with the Scotiabank Platinum American Express Card (and 10 airport lounge passes).

For example, Scene+ points have a fixed value of 1¢ per point when used to “erase’ any travel expense. That’s a lot lower than the more valuable points, but it’s much simpler (and a lot of people always prefer things to be more simple instead of more valuable).

But if you redeem Scotia Scene+ points for something other than travel, their fixed value is even lower! That’s often the case with points. That’s why you should always use your points for travel. It’s such a simple concept — and an easy one if you’re a traveler!

(American Express points were the same, but during the pandemic, they changed so that all fixed-value redemptions give you 1¢ per point — you’re still way better off transferring them to Aeroplan and getting ≈ 50% more value, but if you do want cash back-like points, Amex points are now ideal!)

So let’s say you want to use your Scotia Scene+ points on household items (best example since it’s the worst way to use points), on an item that only gives you 0.5¢ in value instead of 1¢. That’s throwing away half the value of your points.

Instead, use the refundable hotel trick to get the 1¢ per point value on anything.

Here’s a step-by-step guide:

  • Find a hotel that is 100% refundable if you cancel in advance (always read the policy carefully to know the deadline and set a reminder) 
  • Book a hotel stay and apply the points to it
  • Once your points redemption has been processed, cancel your reservation and you’ll get a credit for the cash price of the hotel
  • Buy the item in cash and the credit gives you the higher value of a travel redemption

This doesn’t seem to work well with other banks (they’ll just refund you the points instead of the hotel’s cash value). 

I haven’t personally tried this honestly, because as a savvy traveler who always wants to maximize value, I simply always use my rewards for travel obviously. 

But it’s something to try for those who want to use their points for non-travel expenses and get better value than the often-terrible value offered by default by the Scene+ program for non-travel redemptions.


Want to know travel hacks to save money?

Sign up for our travel rewards newsletter



With this refundable hotel trick, you can easily circumvent a few restrictive rules to make maximizing the value of your rewards simpler. It can give you some flexibility to reach minimum spends, to cash out travel credits in a simpler way, or to use points at a better value if you were going to use them very badly.

What would you like to know about saving money using your credit card? Tell us in the comments below.


See the deals we spot: Cheap flights

Explore awesome destinations: Travel inspiration

Learn pro tricks: Travel tips

Discover free travel: Travel rewards


Featured image: Moxy Miami South Beach room (photo credit: Marriott)

Advertiser disclosure: In the interest of transparency, Flytrippers may receive a commission on links featured in this post, at no cost to you. Thank you for using our links to support us for free, we appreciate it! You allow us to keep finding the best travel deals for free and to keep offering valuable travel content for free. Since we care deeply about our mission to help travelers and our reputation and credibility prevail over everything, we will NEVER recommend a product or service if we don’t believe in it and/or use it ourselves, and we will never give any third-party any control whatsoever on our content. For more information on our advertiser disclosure, click here.


Share this post to help us help more people travel more for less:

Andrew D'Amours

Andrew is the co-founder of Flytrippers. He is passionate about traveling the world but also, as a former management consultant, about the travel industry itself. He shares his experiences to help you save money on travel. As a very cost-conscious traveler, he loves finding deals and getting free travel thanks to travel rewards points... to help him visit every country in the world (current count: 64/193 Countries, 47/50 US States & 9/10 Canadian Provinces).

Leave a Reply