Flyers’ mistakes costing points

Anthony Keane discovers how to maximise your loyalty rewards

MILLIONS of Australians miss out on maximising frequent flyer and other reward points because they are confused by the system’s complexity.

Loyalty programs remain popular among consumers despite banks and retailers watering down their benefits in recent years.

However, flight rewards are still the favourite place for people to spend points.

Qantas’s Frequent Flyer program has around 13 million members, while Virgin’s Velocity program has about nine million.

Airline and credit card reward programs now come with retail partner deals and different tiers for earning and redeeming points, causing consumer mistakes.

The CEO of iFLYflat – the Points Whisperer, Steve Hui, said one of the most costly errors people made was not using reward cards to pay for everything possible.

“Every single point counts,” he said. “I don’t think anyone is maximising the power of their points. I think they’re completely confused about the value.”

The value of a Qantas point depended on how it was spent, Mr Hui said. One point was the equivalent of 3c when used to buy a business class flight, for an economy flight it was 1.2c but for gift cards and retail items it was only about 0.5c, he said.

Many consumers failed to use credit cards that delivered the best points-earning potential, Mr Hui said.

“American Express cards typically earn double the points of Visa and MasterCard,” he said. Mr Hui said another costly mistake was using Qantas’s “Points Plus Pay” or other airlines’ similar options to offset taxes, fees and charges.

“It’s the biggest rip-off,” he said, because points used this way have much less value.

A Qantas spokeswoman said customers with the biggest point balances collected extra points through everyday spending with partners, including Woolworths and Red Energy. “Simple actions like getting a points-earning credit card, changing where you shop and switching to a service provider that rewards you with points can significantly increase your balance,” she said. A good strategy to boost balances was to “double dip” by using a Qantas points-earning credit card to make a purchase that was already earning Qantas points, such as groceries, travel, insurance or bonus offers, the spokeswoman said.

American Express’s head of airline co-brand and loyalty, Will Thorne, said this doubledipping potential had extended to ride sharing, with Qantas and Virgin having partnerships with Uber and Ola respectively.

Mr Thorne said the most important thing for reward card holders to remember was to pay off the debt within the interestfree period. “Otherwise it’s a false economy,” he said, because reward card interest rates are often more than 20 per cent.

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