What’s in a Point?
So you’ve started to build up a useable QFF points balance and you’re wondering what to do with them.
With so many ways to use your points in the QFF program, it’s really important to understand what those points are worth before you start spending them. It will also help you to understand the value of a promotion (eg credit card sign on points bonus) or if it is worth paying a credit card surcharge to earn points on a purchase.
I value my points at 0.5 cents at the lower end, and 3.5 cents at the upper end. Let me explain how I arrive at those figures.
Lets start in the Qantas Store. You could buy the proverbial toaster with your hard-earned points. You’ll be down 31,070 points for a toaster that retails at around $149. That’s a miserable redemption value of 0.48 cents. Great value for Qantas, not such a great deal for you.
So let’s say we purchase Woolworths vouchers with our points. Seems like a sensible thing to do. The best value you can get here is a $250 voucher for 47,500 points. That’s a redemption value of 0.52 cents per point.
Points Plus Pay…
So let’s get some serious rewards…
I’ll be flying Sydney to Dallas later in the year. It’s a 17 hour marathon and I’ve booked an economy ticket (ugh). But I’ve also got enough points to REQUEST an upgrade to Business Class. Wish me luck. I’ve had some success in the past but this type of upgrade is never guaranteed. However, the difference between my Economy fare and my desired Business fare is about $3,100 and on this basis I’m calling a valuation of 3.1 cents per point. And that’s more than 6 times better than a toaster.
You could also go after a Classic Award flight. They can be a little tricky to find, and it pays to be a little bit flexible with your dates and routes, and you’ll still have to pay taxes and carrier charges. But here’s one I picked up recently and I’m pretty damn happy about it. Melbourne to Singapore on Emirates, one of the most highly regarded first class services in the air, with a ticket value of $3300 plus taxes. And I got this for 90,000 points. A redemption value of 3.6 cents per point.
So now you have an idea of how to value QFF points. You can use this information to assess the benefit of that 100K-sign-on-bonus-CreditCard with a $450 annual fee: At the lower end of my valuations, those points are worth $500 (specifically, you could cash them in for $500 worth of Woolworths vouchers). Or you could hold out for an upgrade or a Classic Award at the upper end of my valuation to gain a $3,600 benefit.
But the most important thing is…. don’t buy the toaster.