Is Everyday Rewards better than flybuys?

The flybuys loyalty program used by Coles is considered by many to be inferior to the Everyday Rewards program used by Woolworths, but is this really the case? To compare the two programs we first need to look at how easy it is to collect the points and the value of those points.

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!

 

 

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