Flights, gift cards or toasters? Why I always use my points for travel – and for Economy flights

There are two ways you can spend your points. The first is to use them for flights or upgrades, the second is to spend them on the hundreds of items available online in the Qantas and Velocity Frequent Flyer stores.

Let’s start with the basics. Every point in your account has value. Exactly how much they are worth depends on which product or service you spending them on.

Just like when you’re spending money, you want to be sure you’re getting a good deal with your purchase. Here’s how I run these calculations, and an example of how I recently scored a decent deal for a family trip in Economy.

I chose a flight to Japan and visited an owl cafe instead of buying a toaster with my points.

In order to calculate the monetary value of a single point, I use the following method: simply divide the retail price of the item (in cents) by the number of points needed for that same item. The result will be the value, in cents, of an individual point.

retail price (in cents) / points required for purchase = value per point

A De’Longhi Icona 2 slice toaster costs $99.00 retail or 20,460 of your hard-earned Qantas Frequent Flyer points. In this case, every point spent contributes around 0.48 cents to the cost of the toaster. As explained before the maths would look like this:

9,900 / 20,460 = 0.48c

Some other examples:

• For better value, a $500 Woolworths gift card is 87,650 Qantas Points, giving you a value of 0.57 cents per point
• Alternatively, a $1000 Qantas flight voucher, available at a cost of 169,200 points, works out as 0.59 cents per point. On average, most items I priced in the Qantas Frequent Flyer shop had a points redemption value of approximately 0.6 cents per point

Using the same maths when shopping with Velocity points will achieve around the same outcome.

• A $500 David Jones, Myer or Target gift card costs 90,000 Velocity points each, giving you a value of 0.55 cents per point
• A bit better value is the $1000 certificate with Virgin Australia holidays at 147,000 points, giving you a value of 0.68 cents, 15% better than what Qantas is offering

There is a more in-depth Point Hacks article here, explaining how much each point costs to earn in the first place and a more thorough technique of calculating a point’s worth, but I use the above method to quickly calculate if I am getting a good deal on my purchase.

What about if you use your points for flights, even in Economy?

By comparison, flights with both airlines have a far greater “cents per point” value.

Applying the maths to purchasing flights with points is a little different. The dollar amount you use to calculate how much your points are valued will be the advertised price minus any taxes and fees that are charged when you complete your purchase.

1. retail price – taxes, fees and charges = actual flight cost

2. actual flight cost / points required for purchase = value

Take, for example, the flight from Brisbane to Tokyo that I have booked in January 2017. A one way Qantas Classic Reward flight in Economy, for 3 adults and 1 child retails for $4,071 or 122,000 points and $635 in taxes, fees and charges. So the calculation is:

1. $4071 – $635 = $3436, or 343,600c

2. 343,600c / 122,000 points = 2.81c per point

With this option, every point spent on the airfare is worth approximately 2.81 cents, a number which represents nearly six times better value than redeeming points for the toaster.

Virgin has a very similar result, with a return flight for one from Brisbane to Los Angeles in August this year costing $1233 or 94,000 points plus tax of $153.55, giving you a value of 1.14 cents per point, double the value of a gift voucher.

You can get much better value still if you have a few more points to redeem for Premium Economy or Business Class or for Economy travel on more expensive routes or dates. But that said if getting many people on a plane for the lowest cost is the objective, that could still work.

Does this work for Economy as well as Premium, Business or First Class?

It can do, yes. Keith is always saying that to get the best value for your points then premium cabins can get you the most value, but that doesn’t mean that redeeming for Economy flights is always a bad deal.

Personally, I haven’t ever upgraded a flight. My priorities lie with getting on the plane in the first place and showing my kids the world, so it’s economy all the way for us.

Summing up: using your points value to aid your decision-making process

As shown with my explanation in this post, and from my own personal experiences, I have always found it to be a better financial decision to save my points to use for flights than for anything else.

Occasionally the online frequent flyer stores might have an amazing sale where purchasing with points makes sense, but for the most part and for the majority of people using your points to pay for flights will get you the best value.