Flybuys

For every dollar you spend at Coles you will receive one flybuys point. Once you have amassed a healthy points balance through the flybuys scheme you can trade them for flybuys dollars, shopping or activity vouchers or goods. The flybuys dollars can be bought in $10 increments for 2,000 points, giving each point a basic value of 0.5c.

There are also opportunities to redeem points for ‘double rewards’ for certain vouchers, experiences and goods (e.g. get two adult passes to Sydney Aquarium for the price of one) but we will ignore those for now because these types of deals can often be found elsewhere through other memberships or a quick Google search.

Everyday Rewards

For every dollar above $30 that you spend at Woolworths, you will receive one Qantas point. You may then trade these for shopping vouchers or goods in the Qantas online store, or use them to book flights or secure a class upgrade to a flight you have already booked. Here’s where it gets complicated: the value of a Qantas point varies widely depending on how you wish to spend it.

The basic value of a Qantas point is 0.63c, since by redeeming 5,000 points you can receive a $25 Woolworths gift card. Redeeming them for flights or upgrades can bring you between 0.7 and upwards of 3c per point, but deciding on an end game of a ‘free’ flight needs some careful thought.*

Comparing the programs

If you don’t spend much in the supermarket, the $30 minimum spend at Woolworths is really going to hamper the number of points you can collect. At what point does it become ‘worth’ collecting Everyday Rewards?

If you aren’t going to use Qantas points for flights…the tipping point is a regular shop of $150 or more each and every week. At this amount, you will collect the same value in points by doing your shop at either Coles and Woolies, assuming similar prices and bonus offers. If you spend less than $150 a week in a supermarket and don’t have travel plans, you will collect a higher $ points value by shopping at Coles.

If you will use your Qantas points to redeem a flight….then the tipping point falls dramatically. If you intend to swap your points for a flight and spend a minimum of $106 weekly, you will collect a higher $ points value by shopping at Woolies. This assumes that you might buy a long haul flight that is on sale and each point is worth about 0.7c. However, if you are planning to use your Qantas points for an upgrade and therefore getting much more value for them, then it is almost definitely not in your interest to shop at Coles.

In our case, we don’t spend $106 regularly in a supermarket each week, and a $150 spend is even more rare, so I do the bulk of our supermarket shopping at Coles but also visit Woolworths infrequently to a) collect any particularly good specials and offers and b) to keep Coles on their toes (and so they keep sending me good offers to get me back in their store!) We do collect Qantas points with an end game of booking a flight, but I think it’s better for us to search out the big credit card sign-up bonuses to boost the balance rather than trying to spend our way to a free flight.

And remember that if you have a good rewards credit card, you’ll earn points wherever you use it so the supermarket loyalty schemes are really just the icing on the cake.

Happy grocery hacking (and travel hacking)!

J

*To fly to Europe and back on a Qantas Classic Award seat (the name given to the ‘free’ seats), one person will need 128,000 Qantas points and a couple will need 256,000 points, so collecting 5,000 or 10,000 points each year at the supermarket is not going to get you there very quickly.

If you really want to travel using Qantas points, I would suggest you read up on travel hacking and then live and breathe it. As a start, you would need to be making all your purchases on a rewards credit card (become that annoying “Do you take Amex?” person) and repeatedly sign up for credit cards with initial point bonuses and low or zero annual fees. It is a time consuming activity and very risky if you do not have a 100% record of paying your credit card bill in full every month. If the annual fee is high you might never recoup that cost in rewards so you need to actually estimate your likely spend and points earning capacity before signing up.

If you are not totally across all your finances I wouldn’t even consider travel hacking and instead just search Webjet for the lowest fares (and then book then via the airline to save on booking fees!)

For comprehensive information on travel hacking, visit www.pointhacks.com.au and the Australian Frequent Flyer forum. Here are some simple steps for the beginner:

1. Consider the trips you might take in the next 1 to 5 years and search the Qantas website to find out if they fly that route.
2. Go to the Frequent Flyer section of the site and use the Qantas calculator to establish the number of points you (and your partner/ family) would need to make the return trip.
3. Enter some likely travel date options into the online booking page to establish the cheapest fare and also for comparison the Classic Award seat cash payment. Make sure you select the flights that you would normally consider i.e. would you normally discount flights with many stops or at unsociable times when it is difficult to catch public transport to/from the airport?
4. Estimate the value of the Qantas points for that flight (cost of the cheapest flight minus the Classic Award flight payment, divided by the number of points required).

If the value of the point is close to what you might redeem for a grocery voucher, consider whether you might rather just spend the points on groceries as you accrue them, rather than collecting them for years to take a flight.

Hint: if an international route you are wanting to travel regularly has sale fares, you will find that the value of a point will plummet to around .7c. As an example, a return flight to London requires a cash payment of almost $1,000 when booking a Classic Award flight, but a Qantas sale fare (including all fees and taxes) can be had for less than $1,900.

Another hint: Some popular routes and flights never have Classic Award seats. I have come across this when looking at direct flights to Queenstown or Christchurch, New Zealand during snow season, even a year in advance.

Now if you are a regular traveller with Silver, Gold or Platinum Frequent Flyer Status and/or you are considering upgrades rather than economy class bookings, then your points value will be higher, but you are a pro travel hacker, so you already knew that!

I love grocery shopping and I love supermarkets, always have. I remember how exciting it was when the first large supermarkets appeared in our area as a child (yes, I know that makes me sound old). At university I took a course called Retail Geography that included a study of the psychology behind the layout, colours, music used by supermarkets; I was fascinated. So I’m not going to start hating on the big supermarkets on this blog.

However, the reality is that here in Australia, we are faced with almost a duopoly, with Woolworths and Coles commanding a 78% market share of the grocery sector. Compare that to a 48% market share for the top two supermarkets in the UK and alarm bells should start ringing at the Australian Competition and Consumer Commission (ACCC), it certainly rings alarm bells with me. The third strongest player is Aldi with just a 10% market share.

The size of the two main players creates economies of scale and greater bargaining power with their suppliers, allowing them to offer lower prices and attract more customers. Without decent competition their stronghold on the market could continue to increase and the worry is that if this were to happen, in the long run we could end up with even fewer store options and brands than we have now. It’s the job of the ACCC to step in and make sure that that stronghold is not preventing fair competition.

If a supplier refuses the deal offered by one of the big two, they are turning down access to 40% of the Australian market, so they are caught between a rock and a hard place and are put under enormous pressure to cut their costs and lower their prices.  If you wanted to help the situation and don’t want to wait for the ACCC to act, you could buy direct from farmers and market stalls and shop at your local butcher, delis and grocers. Of course that could get really expensive so you could also support the smaller players such as Aldi and IGA so that their market share increases and they become a viable option for the supermarket suppliers. Aldi’s market share is growing and other European budget chains like Lidl are eyeing up Australia so I imagine that soon those types of discount supermarkets will become available to everyone.

Now for the bright side! We the consumer do have an opportunity to cash in on promotions and lower prices as the two compete with each other and try to outdo smaller players like IGA and young upstarts like Aldi. So for now, I focus on collecting all the very best of the discounts that Coles and Woolies want to offer me and try to play them off against each other.

I don’t buy fruit and vegetables at the big two supermarkets so that I know that it is fresh and seasonal, to lend some support to organic veggie farmers and the local business that organises my weekly organic box delivery, and to help to protect the natural environment from agricultural chemicals. It doesn’t matter to me that I could get non-organic and cheaper produce at the supermarket, it’s just not what I want to buy. Plus the organic veg at supermarkets is heavily packaged to distinguish it from the regular produce, which is also not appealing!

Instead, I try to limit what I buy at the big two supermarkets to anything processed, frozen, canned or baked since I’ve assumed that the suppliers of those products are themselves medium to large sized businesses and can stand up for themselves during those hard nosed pricing negotiations. And that way I still get to maximise my rewards, make some great savings and spend quality time with the supermarkets I love!

But I have no loyalties, this is free market economics as far as I’m concerned! If a cheaper option of the same quality is available outside of the big supermarkets, I’ll happily take it. I do shop at Aldi occasionally but I’ve had an issue with the quality of some of their products when I compare to what I’d buy elsewhere, primarily the sugar and salt content of things like breakfast cereal or tomato paste and things like the percentage of tomato content in a simple can of chopped tomatoes. I think there is a whole blog post to be written to work out what products are cheaper in Aldi AND of equal quality to my usual brand in Coles or Woolies. Feel free to offer any suggestions!

I also buy meat at the big supermarkets because it is vastly cheaper that all the local butchers in our area and that position I can’t really defend, except to say I mainly purchase the markdown food that might otherwise end up in the garbage. This interesting article on aquaponics caught my eye though – maybe growing our own fish could be an option in the future!

Happy grocery hacking!

J

But really, bonus points are just the same as coupons, it’s just that you get the money off later, once you’ve pooled the minimum amount needed to collect a gift card. In the Coles (Flybuys) program that amount is $10, or 2,000 points. At Woolworths, it’s $5.

But how do you get the bonus points? Supermarkets provide coupons for use against your next shop on the bottom of your till receipt – they call them docket deals. Last week on my Coles receipt there was 100 points if you buy a Colgate toothbrush* or you might find something like 500 bonus points when you spend $10 on cheese **. They also send out paper vouchers in the post every quarter and electronic offers via email, which you need to activate. There is nothing to stop you using multiple vouchers during one shop. From what I’ve seen, Coles appears to offer more bonus points opportunities than Woolworths, but I am still getting to grips with the Woolies Everyday Rewards program.

To be fair, the kind of extreme couponing you see in the US where people walk out with $500 worth of toilet roll and cat food for 50c couldn’t happen here but there are reasonable savings to be had. To calculate the $ saving equivalent from the points, you halve the points and then divide by 100 (put a decimal point in front of the last two numbers).

For a bonus of 500 points, divide by 2 = 250, then divide by 100 = $2.50

For a bonus of 1,000 points, divide by 2 = 500, then divide by 100 = $5.00

If you are given a 1,000 points voucher and then do a qualifying shop (usually $100) at Coles but don’t use your voucher you’ve thrown away 5 bucks. Make sure you claim it!

The product specific bonuses are just like regular money off vouchers in another way – they only bring you a saving if you usually buy that product! But if you work it correctly, you’ve basically got the bonus points at no extra cost to your normal shop. If you also buy at sale prices or find clearance items, it’s a double win.

Happy grocery hacking!

J

*uh, no thanks, Coles brand is about a quarter of the price!

** mmm, cheeese.

The basic level rewards are nothing to write home about and there will be another post to explain the differences and which is better. I am just here today to say SIGN UP!

At a basic level, Coles will give you 1 flybuys point per $ you spend in store. You can also earn points at Coles Express fuel stations and a bunch of other places including Target, AGL, Kmart, Webjet and Liquorland. Woolworths will give you 1 Qantas point for every $ you spend over $30 and the only other places you collect Everyday Rewards points on your shopping are Big W (again only above $30), BWS and Cellarmasters. I’m not going to get into the value of a Qantas point vs a Flybuys point just now, but I think the minimum spend is a bit tight of Woolworths!

If you spent $6,000 in one year at Coles, you might get 6,000 Flybuys points, which would buy you $30 worth of Flybuys dollars (similar to having a gift card). That doesn’t sound all that impressive. The real rewards lie in weekly deals like money off vouchers and bonus points on certain products or if you spend a certain amount. For example, Flybuys recently sent me a bunch of vouchers for $8 when I spent $100. Well, that sounds like a good deal to me because I can do a big shop one week for staples (on special of course) and then balance that with a cheaper shop the following week when there’s no incentive to spend more (but probably bonus points on certain products). Another week I got a bonus 1,000 points when I spent $100 and this week I got 500 points for spending $80. So in three weeks I received bonuses and discounts to the value of $8 + $5 (1,000 points) + $2.50 (500 points) = $15.50. If you play it right you’ll get bonuses most weeks, so if you plan your spend carefully you could get hundreds of dollars of savings a year, just for flashing a card at the checkout you were going to stand at anyway. And this is before you add on any points you got using a rewards credit card. I told you I was a supermarket geek.

The picture on this post is my receipt after a particularly good week. $100 of savings came from a one off flybuys incentive (spend $90 a week for 4 weeks and get $100 off your next shop) and $56 of savings came from shopping the specials. I went home with $156 worth of groceries for $4.20!

The exact incentives that are offered vary between members, probably based on the average socio economic background of your home suburb and shopping patterns. Of course you’re not going to change your suburb to save a few bucks on your shopping but I have a theory that if a supermarket analyses that a family isn’t doing every weekly shop with them, or is excluding certain products like fruit and veg from their shop, then they will offer the greatest incentives to that family. If a second family shows unwavering loyalty by regularly spending $150 or 200 a week across all product categories, there isn’t anything to be gained by the supermarket by offering vouchers to that family. It’s just a theory at this stage but I do shop irregularly at Coles and I do seem to get better Flybuys offers than a friend that spends a solid $250, week in, week out. Woolworths don’t seem to offer me much incentive at all so I need to work on that…

Happy grocery hacking (and sign up now)!

J