Cash in your frequent flyer award points

In September 2001 I lost over 100,000 frequent flyer points when Ansett Australia collapsed. I had been accumulating reward points with the intent of funding an overseas flight. To that end I’d even paid for a domestic flight rather than use some of my points.

What a waste!

Back then it was a common complaint that reward seats were scarce and never when most people wanted to fly. Ten years on reward flights are easier to come by and you can even use points to partially fund a flight.

And there has been one other excellent development.

You can now cash in your frequent flyer points!

Woolworths $100 gift cardThe Qantas Frequent Flyer Store currently includes 214 gift vouchers. The vouchers that excite me the most are the ones for everyday essentials like groceries, fuel and clothes.

Myer Gift Card from the Qantas Frequent Flyer StoreThe best value gift voucher I have found is just 13,500 points for a $100 voucher. This rate applies for many of the retail stores, such as Big W, Myer and Adairs, and also for car hire, hotels and Qantas Holidays.

Most other gift vouchers for Woolworths Group stores cost 14,500 points for a $100 voucher. That means your points are worth about 0.69 cents each. (Yes, less than one cent per point.)

Flights or gift cards?

Yes, redeeming your points for a flight award may offer slightly better value depending on when you fly. However if you usually fly only on cheap fares and specials then you’ll probably find, as I have, that the savings are about the same.

By redeeming your points for vouchers you can reduce the impact of rising costs. And, if you’re on the ball, you should therefore be able to boost your cash savings.

Even better, if you direct those savings into additional mortgage repayments you will be able to own your home sooner. Awesome!

When weighing up whether to accrue your points for flights or redeem them for cash keep this in mind – you don’t earn interest on your frequent flyer points.

In fact it seems that even though flight prices haven’t increased much the amount of points required has increased. So the value of your award points is actually decreasing.

Getting started is easy

With just 3,750 points you can redeem a $25 gift card. So log on right now and start redeeming.

Automate it

Qantas Frequent Flyer has recently introduced Auto Rewards. You can elect to automatically redeem your points for a Woolworths gift card every three months.

The current maximum amount is a $20 gift card costing 3,000 points. (That’s a value of 0.66 cents per point.)

Worried about security?

Yes gift cards are cash-like so you are right to give some thought to security.

At the very least you should have a decent padlock on your mail box to help protect yourself from identity theft. That will also help against theft of your gift cards.

Alternatively use a post office box – either your own or where you work.

Take the pressure down this Christmas

There are gift vouchers that will cover most items that will hit your budget this Christmas, including gifts. From general retail stores to travel, auto, hardware, electronics, food and liquor.

You may even decide to just give the voucher to someone as a gift. Hmm, that gives me an idea. I might redeem some points for a Bunnings voucher for my father-in-law.

6 thoughts on “Cash in your frequent flyer award points

  1. As always your simple and $ saving advice is appreciated. Yes, the auto reward system for Woolworths’ Qantas FF points is great. I just noticed our Citibank Platinum Visa also offers gift vouchers or FF points.

    Another tip is that some free FF airline clubs (eg Emirates)which offer vouchers too. So before the points we got during a trip to UK expired, our family got some Westfield gift vouchers for the FF points collected on that airline which came to $50pp. If you are flying with any airline, see if they have a FF club, join it before you fly and make sure you get the points/miles creditted to your account.

    1. Great tip ND about joining the reward program before you fly then redeeming for vouchers. Thanks for sharing.

      In fact these days it seems it can make sense to join every free reward program for the shops and services that you frequent. If they’re going to use the data about how I shop to make my shopping experience better then I’m ok with that. (Just don’t spam me!)

  2. Matt, I have found that using Frequent Flyer points to purchase an upgrade to a better seat class (eg Premium Economy, Business etc) on international flights offers, by far, the best value for using your points. This certainly applies to Qantas where better seats can be quite a bit more expensive than economy class. A Sydney-LAX-Sydney regular economy fare is around $2,500 where Business Class costs $15,000. You can upgrade from economy to business for 90,000 points (2×45000) so you are getting $12,500 of “value” for 90,000 points. At typically 1% cost/point (on some credit cards), this will cost around $900 in credit card charges. For my money this is a steal!

    1. Great insight – thanks for sharing that tip, Peter.

      So for those people who have the capacity to spend tens of thousands of $$ on their credit card (maybe through work) plus travel internationally then they could get better points value on flight upgrades than cashing in for gift cards.

      There’s always exceptions! 🙂 Thanks for sharing this one, Peter.

  3. In collecting FF points for international flights we found Emirates and Citibank credit card to be the best as they pay you 1.5 points for each $1 spent (in comparison to only 1:$1 with Qantas) + give free travel insurance with the card which would cover your $290 yearly card fee. Taxes on Emirates are the cheapest, around $100 return to Europe. That would be the price of your ticket if you manage to accumulate 76,000 points with them for that flight.
    And it is worth to pay card surcharge in order to accumulate the points because the value of points is around 2.6%, if surchage is less than that – it is worth it.
    The definite winner for us in terms of FF points.

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