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Velocity Rewards Store is back, but still not great value

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Virgin Australia's reward redemption options are increasing again.

Virgin Australia has restored access to the Velocity Rewards Store, meaning you can again spend your Velocity Points on shopping with major brands, gift cards and charity donations. Spoiler: This is still not a great value way to use points.

The ability to redeem Velocity Points in the store was suspended when Virgin went into administration in April. In July, redemptions for flights and hotels returned. Now the Rewards Store is back, although the range of products on offer isn't quite as wide as it was back in April.

Screenshot of Velocity Rewards Store

Last week, creditors agreed to Bain Capital's deal to buy out the airline. As a result, we can expect many of the rewards changes made when Virgin went into administration to be wound back.

Probably the most constant piece of points advice I give is this: Don't spend your points on a toaster. This remains the case now the Rewards Store is back.

The Points Finder rule of thumb is that you should aim to get at least $20 in value for every 1,000 points you spend. In the Rewards Store, you'll be lucky to get $6 in value.

Here's a single example. A 256GB iPad Mini requires 162,180 Velocity Points. Apple's price for that device is $819. That translates to $5.05 in value for every 1,000 Velocity Points you spend.

Gift cards aren't much better. A $100 gift card requires at least 18,000 Velocity Points. That's an effective value of around $5.55/1,000 Velocity Points. Some cards are worse. A $100 iTunes card requires 19,500 Velocity Points, translating to $5.12/1,000 Velocity Points. If I needed an iTunes card, I'd wait until Coles or Woolworths ran a 15% off deal (Coles has one as I write this, in fact).

The best value remains charity donations. A $50 donation to Starlight Children's Foundation costs 6,250 Velocity Points. That means you're getting $8 per 1,000 Velocity Points. If you just want to clear out a small number of points, it's an option.

Personally, I won't be spending any of my points in the Rewards Store. But I'm glad it's back, because it demonstrates that Virgin is, very slowly, returning to something like normal.

Want to keep your frequent flyer points balance growing? Check out the latest credit card sign-up deals.

Angus Kidman's Findings column looks at new developments and research that help you save money, make wise decisions and enjoy your life more.

Picture: Getty Images

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