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American Express and online game creator Zynga have now teamed up, so that Amex Membership Rewards members can redeem their points for virtual goods in popular Facebook games like FarmVille, Cafe World, or Mafia Wars.

For any Amex Gold Card members out there who spend a lot of time playing games online, this could be a pretty sweet deal.  They’re probably using their American Express card to buy virtual goods already, and are earning points in the process, which can then be exchanged for more virtual goods.  And it looks like membershiprewards.com is offering the exchange at 200 points per $2 of in-game money, for a standard 1% conversion rate.  This definitely beats Amazon’s partnership with Membership Rewards, where the redemption rate is a measly 0.7%.

This also looks to be a good deal for both parties.  Zynga is in the business of offering games for free, primarily on the Facebook platform, and then selling goods within the games to impatient players.  More than 225 million people play FarmVille and and their other games each month, and an estimated $2.2 billion was spent on virtual goods in 2009.  Since these goods are virtual, they cost Zynga virtually nothing to produce.  This means that American Express is likely able to buy Zynga dollars at a discount, and Zynga can still make a margin on all the additional goods they will sell to Amex cardholders.

As an added incentive to prevent card members from exchanging their points for cash and spending the cash on in-game goods, Amex and Zynga also partnered up to create exclusive, limited edition items that are available only in exchange for Membership Rewards points:

  • FarmVille Purple Cow (540 MR points)
  • FarmVille Manx Cat (435 MR points)
  • Café World Amex Lightning Stove (1945 points)
  • Café World Amex Outdoor Fountain (1080 points)

More of these exclusives should become available when Zynga rolls out new games later this month.

It’s kind of genius if you think about it – people tend to think of credit card rewards as “free money” rather than money already spent, and what better way to buy fake goods than with free money?