Qantas frequent flyer points lose value, but members can still win

A devaluation of Qantas points is coming, but savvy members who treat them as an investment can still enjoy rich rewards.

Flights are the most popular, and best-value, way to use points. Picture: iStock

Your Qantas frequent flyer points will lose up to 20 per cent of their value early in the new financial year.

If hearing this for the first time, you – like I did – will probably think “bloody Qantas!”. However, look a little closer and the devaluation is basically the same as what has happened to your cash in recent years.

Qantas Frequent Flyer has 17 million members, and the last time it increased the number of points required for a reward seat was in 2019.

The new change, from August 5, effectively reduces the value of people’s points in line with inflation. The devaluation is between 5 per cent, generally for shorter domestic flights, and 20 per cent, for most international flights.

So if you’ve saved 100,000 points to pay for an overseas trip, from early August your stash is effectively worth just 80,000 points.

That said, if you had $100,000 sitting in a bank deposit six years ago and left it there, the purchasing power of that money today has dropped about 19 per cent, to $81,000, after the impact of Australia’s inflation rising 23.3 per cent since 2019.

Qantas last devalued its frequent flyer points in 2019. Picture: David Gray/AFP

Qantas is also increasing how many points people earn by taking flights, some by up to 25 per cent, from late July, adding a small silver lining to the devaluation news, so it’s hard to get too grumpy.

However, other frequent flyer traps and tactics do anger me, largely because they can catch out unsuspecting members and prompt people to unnecessarily waste their hard-earned points.

Trap number one is people not understanding the value of each point, which can be worth 5c if used to redeem premium flights or upgrades, but just 0.5c per point if used to buy gift cards or goods at the online store. It’s pointless paying a surcharge to use your credit card to earn points, then not getting value for those points.

The Points Plus Pay system, where people have flexibility to use points to pay taxes and other fees that come on top of their flight reward bookings, is also a waste of money, delivering about 0.5c in value per point. You’re better off finding the cash to cover those costs.

Last year Qantas introduced Classic Plus Rewards, which it has hailed as a success by unlocking four times as many reward seats. However, it usually requires 2-4 times as many points as traditional Classic reward booking, slashing the value of people’s points. Experts say this program was introduced largely to allow the points “whales” – business owners with millions to spare – to book more flights, rather than helping the little guy.

Despite the potential pitfalls around wasting points in frequent flyer programs, they are still a great way to get benefits for those who know where to look. Treat them as an investment and they will pay off handsomely.

I’ve flown with my family interstate every year using points, thanks to using a rewards credit card and studying ways to multiply Qantas points.

For example, buying drinks on the Qantas Wine site at certain times can come with a bonus 9000 points on a case of wine – more than enough for a one-way domestic flight.

People can double and triple their points by linking it with shopping loyalty schemes, fuel purchases and other retailers. Booking hotels through Qantas can come with big bonuses -often three extra points per dollar spent.

Collect enough points in a year and you get even more benefits – free Qantas Club membership, discount vouchers, status benefits. It’s a complex system but truly rewarding for people who seek the rewards.

Educating yourself is important, and there are plenty of websites and online forums with tips and tools that can help. These include thechampagnemile.com.au, pointhacks.com.au and australianfrequentflyer.com.au and iflyflat.com.au.

Your points have a financial value, so treat them as an asset.

Originally published as Qantas frequent flyer points lose value, but members can still win