Woolies backflips on Frequent Flyer

WOOLIES has reversed its controversial decision to axe Qantas points from its new rewards program — but is the result actually good value for customers?

Woolworths

UPDATE

WOOLWORTHS customers will be able to convert “Woolworths Dollars” into Qantas Frequent Flyer points under a new deal announced on Tuesday, but they may be waiting for some time.

As reported yesterday, the three-year deal will allow Woolworths Rewards customers to convert 10 Woolworths Dollars, earned on orange-ticketed items, into 870 Qantas Points.

But Woolworths and Qantas have not given an exact launch date of the new arrangement, which requires “IT and systems changes” to implement, saying only it is “expected in the first half of 2016”.

Between 1 January 2016, when the current automatic Frequent Flyer points accumulation ceases, and the launch of the new option, Woolworths says customers will receive “regular bonus Qantas Points offers, ensuring shopping at Woolworths remains the best option for Qantas Frequent Flyers during the implementation period”.

“Our revamped Woolworths Rewards program is delivering for our customers. We are seeing encouraging results, with strong member growth and increased scan rates at the check-out,” Woolworths’ Food Group managing director Brad Banducci said in a statement.

“This new agreement means our customers can choose from two great options. Those who prefer cash back can continue to use Woolworths Dollars to get money off their shopping, while avid points collectors will have the option to convert their Woolworths Dollars into Qantas Points at a very attractive rate and with no minimum spend.

“This fantastic outcome means Woolworths Rewards is 100 per cent relevant to all Woolworths customers, while also offering the best frequent flyer partnership in Australian supermarkets.

Qantas Loyalty chief executive Lesley Grant said Qantas was “very pleased to be continuing its long association with Woolworths and we believe our Frequent Flyer members will feel the same way”.

“We know Qantas Points are a very popular choice for a lot of people, particularly those who are earning them in several ways. Those customers tend to preference brands that offer Qantas Points because it helps them reach their goals faster, which can mean upgrades on flights or taking the family on an overseas holiday each year,” said Ms Grant.

According to Qantas, around 9.4 million flights were redeemed using points earned at Woolworths in the first six years of the relationship. Around half of all Everyday Rewards members were linked to the Frequent Flyer program, and of those 32 per cent had not redeemed points for flights or other goods.

EARLIER

WOOLWORTHS customers will once again be able to earn Qantas Frequent Flyer points through its new rewards card under a deal with the airline to be announced tomorrow.

The dropping of the Frequent Flyer partnership in favour of “Woolworths Dollars”, earned on purchases of orange-ticketed items, caused a major backlash against the retailer.

The automatic accumulation of Frequent Flyer points on purchases over $30 will cease after December 31, but the new arrangement will allow customers to redeem 10 Woolworths Dollars for 870 Qantas points.

Woolworths had earlier said only that it was still in talks with the airline. News.com.au can confirm the deal, which was first reported by the Australian Business Traveller website.

“Woolworths’ about-face shows how badly the company underestimated Australians’ passion for their frequent flyer points,” ABT editor David Flynn said.

“With around eight million Aussies belonging to the Woolworths Everyday Rewards scheme plus over 11 million Qantas Frequent Flyers, there were simply too many customers at risk when the grocery giant is already fighting a battle on two front against Coles and Aldi.”

Flynn said it also brought into question Woolworths’ claim that shoppers were suffering from “points fatigue” and that only 9 per cent of its customers wanted to earn Frequent Flyer points.

“To its credit, the new scheme is fairly straightforward — shoppers will be able to trade 10 Woolworths Dollars, earned when buying selected items marked with an orange promotional tag, for 870 Qantas Points,” he said.

A Woolworths spokesman told news.com.au on Monday: “Nothing has changed. Woolworths Dollars will be at the core of the program. We’re still in negotiations with Qantas about how the two programs can work together.”

The retailer has been facing a growing backlash against the new Rewards Program since its launch nearly two months ago, with many shoppers vowing to go elsewhere once the Frequent Flyer partnership ends.

One man’s Facebook post complaining about the new system, in which he earned just $4.80 in rewards on more than $1000 worth of shopping, went viral with nearly 60,000 likes and more than 5000 shares.

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