Starter Guide #2: Get more value from your frequent flyer points!

This article was published some time ago and content may be out-of-date.  Airlines are continually changing their loyalty programs. Always double-check with the airline. 

QF+VAThis is a General Guide

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EasyBeginners welcome!

Overview

Are you making the most of your frequent flyer points?

About half the Australian population holds a frequent flyer membership, but many of us continue to cash-in our hard-earned points at the lower end of the spectrum. Unfortunately, some of the most redeemed options are also the least valuable.

Where at all possible, avoid using your points to purchase products via the airlines’ eStores (that means no toasters!). Rather, redeem them for reward flights. Skip directly to our popular “best of” guides below or keep reading to learn more about getting the most out of your airline currency!

This is a starter guide, relevant to both Qantas Frequent Flyer and Virgin Australia’s Velocity, which aims to give you the information you need to get more value! Throughout the article look out for the related article links, which provide more detail about your loyalty program.

Our ‘best use of points’ guides

Best Use of Qantas Points

This guide looks at, in our opinion, some of the best Qantas Frequent Flyer redemption opportunities.

Best Use of Velocity Points

In this guide, we provide our thoughts on the best uses of Velocity points for flight redemptions both in Australian and around the world.

Frequent flyer point cost and redemption value

The key to getting the most value out of your points across both of Australia’s main frequent flyer programs, is understanding two things:

The cost of a point

There are usually real costs involved in acquiring points. In theory, when the cost of a frequent flyer point is less than its redemption value (as appraised by you), you’re in front!

For example, certain merchants charge credit card surcharges. Let’s say you pay a utility bill via a rewards credit card where a 1.2% merchant surcharge applies. On a $100 purchase, you’re up for an additional $1.20 (or 1.2c per $1 spent). Launch our full point cost guide for more examples.

Point redemption value

Naturally, you want to redeem your points for a value greater than their cost. In our very simplified example, if you were to earn points at a rate of 1 point for every $1 spent, you would want to redeem these points at a rate of over 1.2c/point (your point cost). Otherwise, you’re going backwards!

Throughout this website, we reference our Guide Redemption Value (GRV). The GRV is our ‘ball-park’ value estimate of a specified points redemption opportunity, derived from its price. Our GRV is a guide only, it does not take into account your personal situation. Launch our full guide below to learn more about calculating your own redemption value.

eStore value: Toasters to TVs

From toasters to televisions, Qantas stocks over 8,000 products in their eStore. The major categories include electronics, fashion, gift-cards, beauty and home-wares. However, using your hard-earned points to pay for these products hardly represents great value.

eStore redemptions typically offer a Guide Redemption Value between 0.5c and 1c/point. However, you’ll rarely reach the top end of that range (except for major discounts and clearance products).

For example, Qantas currently lists the ‘De’Longhi Icona’ 4-slice toaster in their eStore for 32,600 points. This particular toaster (via a quick Google search) would set us back around $140 if we were to purchase it from a major retailer. In this case, the GRV is a miserable 0.4c/point ($140/32,600).

For a similar number of points, you can fly coast-to-coast in international grade lie-flat Business Class. These flights, onboard Qantas or Virgin, offer GRV’s in-excess of 5c/point. That’s more than 12 times the value of our toaster!

Another popular redemption option is gift cards. Although store vouchers have the benefit of being more ‘liquid’, the value on offer is only marginally better than our shiny toaster. For example, a $100 Woolworths Group ‘Wish’ eGift Card costs 19,000 Qantas points (a GRV of just over 0.5c/point).

Travel & utilities value: Hotels to petrol

You can now redeem your points for everything from hotel stays and car hire, to petrol and insurance. However, these opportunities are generally pegged at a similar value to products in the airlines’ online stores.

For example, you could book a two-night stay via Qantas Hotels at Sydney’s Hyatt Regency for 110,000 points.

With this booking priced at $698, you’re securing the redemption for 0.6c/point. Although this trumps our toaster, you can do a lot better! For example, save up an additional 30,000 points and fly around the world with the Qantas, which offers between 4 and 6c/point of value!

Flight value: reward flights & upgrades

Put simply, flight rewards allow you to get the best value out of your hard-earned points!

Without trying, flight redemption values take off at around 0.8-2.5c/point (that’s 2 to 6 times our toaster from the eStore). In this range, you’ll mostly be redeeming domestic and international flights in Economy.

However, it isn’t difficult to secure both Economy and Business Class flights with GRV’s over 3c/point. That’s 7 toasters! With a bit more effort, you can double that again (x15 toasters) for Business Class seats!

The beauty of flight redemptions is that the number of points required for a particular flight is fixed. Unlike toasters or gift cards, reward seats are priced independently of the flight’s cash fare, based on distance or region. This allows you to secure some serious value by targeting one of the many ‘sweet-spots’ available within the airlines’ redemption charts. Because of this, there are some great opportunities when the cash price of a ticket is high.

Flight reward bookings also come with very good change and cancellation flexibility – much better than the airlines’ entry-level cash fares. For example, refunding a Qantas Discount Economy ticket to the UK will set you back a massive $500, versus just 6,000 points to cancel the equivalent reward seat!

The main caveat with reward flights is availability – there are only a limited number of reward seats for each flight. Availability is dependent on the flight redemption. For example, although you’ll typically have no problems securing Economy rewards, Business Class flights to popular destinations can be difficult. However, if you’re flexible with your travel arrangements and across our reward seat booking tips, you’ll give yourself the best chance of securing yourself a bargain!

Our ‘best use of points’ guides

At flyerpoints.com.au, we’d like to show you how to secure this value! Our “Best Of” articles are a great starting point, walking you through some of the most valuable flight redemption opportunities for Aussie travellers. All of our guides are tagged with a difficulty level, so start out slow and work your way up!

Best Use of Qantas Points

This guide looks at, in our opinion, some of the best Qantas Frequent Flyer redemption opportunities.

Best Uses of Velocity Points

In this guide we provide our thoughts on the best uses of Velocity points for flight redemptions both in Australian and around the world.

Learn more about flight rewards

Alternatively, head off to our Qantas or Velocity hubs and browse our popular redemption guides, which include detailed walk-throughs and tips on securing reward flights.

Qantas Guide Hub

From Classic Rewards to the popular Round The World redemption, browse all of our Qantas Frequent Flyer flight redemption guides.

Velocity Guide Hub

Browse all of Velocity’s flight redemption guides.

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