Earning frequent flyer points through your spending is easy, but making sure you redeem them to get the most value takes a bit of work.
Airlines give frequent flyer points to their customers as a reward for flying with them. Passengers who accumulate enough points can exchange them for free or heavily discounted airline tickets or merchandise.
Airline points are used to encourage brand loyalty, so are not interchangeable with points from other airlines unless they have some sort of exchange program like the One World Alliance, of which Qantas and various other airlines are members.
Here we look at how to earn frequent flyer points, how you can spend them and your best options for using these rewards for travel.
Tips to effectively use your frequent flyer points
- Don’t use them to trade goods
Frequent flyer programs have online stores where you can buy merchandise instead of spending your points on airplane tickets. But if you do the maths, it doesn’t take long to work out that the exchange rate is terrible. At the Qantas store, a $50 iTunes gift card costs 7500 points, yielding an exchange rate of 0.67 cents per point*. Various denominations of David Jones eGift Cards yield an exchange rate of 0.71 cents per point*. You would enjoy a much better yield for your hard-earned points by paying cash for the goods you need and using your points for flights.
*Figures are correct up to 19 December 2013
- Reconsider ‘free’ flights
If you spend your points on flights that are already cheap, you may in effect be diluting their value and not getting the best deal. With cheap flights it’s better to pay money and collect more points that you can use later on expensive flights.
To get the exchange rate for the deal in dollars per points, divide the cash value by the number of points - typically the answer should range between 0.08 (eight cents) and 0.005 (half a cent) per point.
If you’re getting only the equivalent of less than half a cent per point, you’re not getting good value for your points. If, on the other hand, you are getting as much as eight cents worth of airplane ticket per point, then you have a pretty good trade opportunity.
Of course, if you don’t fly so frequently, it’s best to use the points any way you can, but you must also watch out for exorbitant taxes on flights paid for by points. If you factor in the worth of your points, a supposedly free flight can actually cost you more than if you had paid for the ticket.
- Opt for an international business class seat
Paying with classic bonus points is an inexpensive option except for a big surcharge and tax, but there are limited seats sold for points, so they’re hard to come by. For example, Qantas offers an any-seat option for any flight, but it requires many more points.
You may want to consider the ‘any-seat’ option. While costing more points, it does not have the surcharge and tax. If you pay some cash, you can reduce the number of points down to the same number you’d have given up for the classic option and the cash component of the cost is only a bit more than you would have paid in surcharge and taxes with the classic option. This keeps your cash expenditure value down and the value of your points high.
- Use them for upgrades
An efficient way to gain the most from points lies in buying an economy ticket and using points to upgrade it to a higher class, perhaps even first class. Not all tickets can be upgraded, so you have to check into the possibilities before you commit to a plan. For example, Qantas processes upgrades right up to the moment of boarding, so the astute bargain hunter can seize some strong last-minute opportunities.
- Ask your travel agent
The options associated with flying are complex and often overwhelming. Travel agents can help you sort out the best way to get somewhere and even save you money. They do not, however, profit much from your use of frequent flyer points.
- Watch expiry dates
If you don’t use the points you earn, it’s likely that they will expire. The timing depends upon the airline. Some count from the time you last flew. In this case, you might have earned some of your points years ago, but as long as you keep flying, the activity on your account keeps all its points alive. For example, your Qantas Points generally won’t expire unless you do not fly for 18 months.
With some airlines, points age according to when they were awarded to your account and new activity won’t help older, unused points. If they aren’t used, they slide off your account—typically somewhere between 12 months and three years after the time they were earned.
How to use your Qantas frequent flyer points
- Qantas and Partner Classic Awards
Classic Awards mean trading your points for tickets on flights aboard Qantas or any of a number of associated airlines. These airlines include Aer Lingus, Air Niugini, AirNorth, Fiji Airways, Air Vanuatu, Alaska Airlines, Alitalia, Brindabella Airlines, China Eastern, El Al, Jet Airways and South African Airways. By flying Qantas and connecting to any of the many associated airlines, you can win points for travelling almost anywhere in the world.
- Jetstar Classic Awards
Jetstar, including Jetstar Asia, Valuair and Jetstar Japan, also awards Qantas Points and accepts them as trade for tickets. The Jetstar group boasts 3000 weekly flights to 60 destinations in 16 countries and territories across the Asia Pacific region. These include destinations in Australia and New Zealand, Hawaii, Japan, Singapore and Vietnam. In April 2013, Jetstar increased its list of destinations and reduced the number of Qantas Points required for its flights by 20 per cent.
- Partner Classic Awards
In addition to the Partner Classic participants listed above, airlines in the Oneworld Alliance will award Qantas frequent flyer points. Members of Oneworld Alliance include AirBerlin, American Airlines, British Airways, Cathay Pacific, Dragonair, Finnair, Iberia, Japan Airlines, LAN (Chile), Malaysia Airlines, Qantas, Qatar Airways, Royal Jordanian and S7 AIrlines (Russia's largest domestic carrier).
- Qantas and Jetstar Any Seat rewards
Qantas and Jetstar reserve only so many seats per flight that can be bought with points. There was previously a shortage of seats, meaning passengers sometimes had to book as much as a year in advance to use their points. So Qantas introduced the Any Seat program that allows points to be redeemed for any seat, but of course the catch is that these seats cost significantly more points.
- Points Plus Pay
Qantas allows you to buy tickets with a mixture of points and cash. Passengers who buy their tickets through the Qantas website can select the ‘Use Points Plus Pay’ option while purchasing a ticket if they have the minimum amount of points. The option is not visible until you reach the ‘Check’ page of your booking.
- Qantas Store
The online store sells luggage, kitchen appliances, headphones, alarm clocks and laptop computers. There are digital gift cards for Myer, David Jones and JB Hi-Fi. Subscriptions to popular magazines range from Better Homes and Gardens and Fishing to Golf Digest and Home Beautiful. You can buy music from Spotify and iTunes. You can also arrange a jet boat ride to speed you across Sydney Harbour or a stock car to race you around the track.
- Auto Rewards
At your request, Qantas Auto Rewards will automatically convert some of your points to a Woolworths Gift Card every three months. You can opt for a $5 gift card for 750 points (again a 0.67-cent exchange) up to a $20 card for 3000 points.
- Qantas epiQure
Qantas epiQure lets wine connoisseurs among frequent flyers enjoy at home the fine wines that Qantas serves on its flights. Qantas epiQure members earn points for buying wine on flights or from home, receive invitations to events that offer fine wine and food, rate wines served on flights and enjoy discounts on fine wine. A 12-month membership costs $99 (including GST) or 13,000 Qantas Points (an exchange rate of 0.76 cents per point, which is not a particularly good exchange rate).
- QBE Travel insurance
Travellers departing the US with Qantas have the option to buy travel insurance underwritten by the QBE Insurance Corporation. Protection includes reimbursement of the flight cost if you have to cancel your trip because of illness or injury, trip delay and stolen baggage coverage, emergency medical evacuation and care and round-the-clock worldwide assistance.
Comparing Qantas Transaction Accounts
You can also earn qantas points for purchases and also on your balances using debit cards.
How use your Velocity frequent flyer points
Velocity frequent flyer points is the frequent flyer program for Virgin Australia, its international airline partners and its global network of Program Partners.
As with all airlines, the original way to use frequent flyer points is to buy another airline ticket at a substantial discount. Passengers can buy tickets with cash, points, or a mixture of the two.
Airlines participating in Virgin Australia’s frequent flyer program include Virgin Australia, Virgin Samoa, Etihad Airways, Air New Zealand, Delta Airlines, Virgin Atlantic, Singapore Airlines, Air Berlin, Hawaiian Airlines and Virgin America.
- Flight upgrades
Virgin Australia offers three ways to upgrade your ticket: UpgradeMe Points, which draw on points on your account; UpgradeMe Platinum Member Offer, which uses one of the four complimentary upgrades received as part of platinum membership; and UpgradeMe Premium Bid, which allows passengers with Saver fares and above to submit a bid on an upgrade to a higher cabin class. If you win the bid, you'll be notified no later than two days before departure. Not all seats can be used for upgrades, which are subject to availability and to a quota. There might be empty seats at take-off even though you were not able to upgrade.
- Car hire
You may use cash, points, or a combination to rent a car from Europcar in Australia, New Zealand, Great Britain, France, Italy, Portugal, Germany, Spain, Belgium, Austria and Switzerland. You may make arrangements through the website. Hertz and Thrifty will also be available soon.
You can exchange points for hotel accommodation at 180,000 different hotels in 180 countries. You may also exchange points for gift vouchers at any of several hotel chains. Arrangements can be made through the Virgin Australia website.
- Holidays and travel extras
You can even spend your points at Virgin Galactic and take a trip into space. If you prefer something a little more down to earth, the travel agency, Virgin Australia Holidays, will accept your travel points (or some combination of points and cash) to plan a vacation ‘that's only limited by your imagination’. Virgin Australia Holidays will arrange flights, accommodation, tours, activities and insurance to plan your complete vacation.
- Velocity rewards store
The rewards store sells iPads, Kindles, cameras, luggage, headphones, kitchen gear and sporty sunglasses, featuring brands like Panasonic, iHome, Sangean, brother, dyson and Coleman.
- Online shopping
Velocity has partnered with Onsport, an online sport and fitness store that will accept any combination of cash and points for your purchases. The online store offers a wide range of clothing and gear for today's active Australian.
- Lifestyle and entertainment
In the way of Lifestyle and Entertainment, Velocity has partnered with Onsport Golf Club. The club is offered exclusively to Velocity members and is free to join. Velocity members can redeem Velocity Points on golfing experiences, events, lessons and top golfing equipment brands with any combination of points and cash.
If you have the mind to spend your points not on yourself but for a worthy cause, you can donate 14,000 points that will translate into a $100 donation to Green Cross Australia, Surf Life Saving Australia or Virgin Unite. Lesser donations of $50 and $25 are available as well.