Why Australians don’t use frequent flyer schemes properly

A third of us have never actually redeemed any rewards. Here's how to fix that.

Australians love loyalty schemes such as frequent flyer programs: 90% of us belong to at least one loyalty scheme. But that doesn't mean we understand them or know how to make the best use of them.

That's underscored by recent research by Budget Direct, which surveyed 1,000 Australians about their habits. Amongst those of us who do have a frequent flyer membership (which is roughly two-thirds of the country), only just under half (49.2%) think they're actually rewarding.

So what about everyone else? 33.6% say frequent flyer schemes are just "a waste of time", while 17.2% of them say they're "confusing".

I'm not going to deny that frequent flyer rules can be fiddly and tedious. You need to understand when you earn points (and when you don't), how they expire, and what you'll actually pay for "free" flights. It's not easy, but it's also not rocket science.

For me, the most distressing part of the research is the data on the rewards that people who are frequent flyer members have actually claimed. Here's what emerged:

Oh dear. Being generous, a small proportion of the 31.3% who have never redeemed anything might be saving their points for a major reward, which is a sensible strategy. But given the high levels of confusion, I doubt that covers everyone.

The appeal of gift vouchers is also obvious: after all, they have a clear dollar value. But I suspect that some of these respondents are actually primarily thinking about supermarket schemes such as flybuys or Woolworths Rewards when they say this is what they've redeemed, since $10 off vouchers are the most common options in those programs.

I can draw some comfort from that fact that more people have redeemed for flights than for other goods. As we note constantly around here, you get far more value from your points for flights than for other goods.

Enough about the problem, though, because it's actually really easy to fix. Just follow the golden rules:

• Set yourself a goal. Accumulating points makes much more sense when you have a specific goal in mind, like "I want to get a business-class return trip to London". Read more about how I set my own goals for some inspiration.
• Pick a single scheme and concentrate on it. That way, you'll accumulate points faster, and you'll have fewer rules to follow. For most Australians, that choice will be Qantas Frequent Flyer or Virgin Velocity.
• Make sure you're earning points for credit card spending. Again, there are solid options available for Qantas and Virgin.
• Align your supermarket shopping for more points. Use Woolworths Rewards to boost your Qantas total, or Coles flybuys for Velocity.
• Don't let points "accidentally" expire. Every frequent flyer scheme has different rules for when points expire. Make sure you understand the conditions that apply to you. For Qantas, points expire after 18 months of inactivity; with Velocity, it's 24 months. Happily, activity doesn't have to mean flying; points earned from your credit card or supermarket shop also count.

Follow those steps and you'll be able to build your points total without pain. London, here I come!

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

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