Australia Markets open in 5 hrs 15 mins

Expert’s tip: Why you should never spend frequent flyer points on products

An expert has shared the best way to spend your frequent flyer points. Images: Getty

A frequent flyer points expert has lifted the veil on the best ways to use points to get the most value for money, revealing one purchase is significantly better value.

Frequent flyer expert and Point Hacks spokesperson, Daniel Sciberras, compared the value of purchases made using frequent flyer points, and found that redeeming points on flights over products delivered better value.

“Redeeming points on products generally aren’t good value compared with flights, especially long-haul international flights in premium cabins,” Sciberras said.

“You should be looking for at least 2 cents per dollar for an ideal redemption value and this isn’t something you are likely to get with products. Most of them fall between 0.4 to 0.8 cents, while flights are between 1.5 to 14 cents per point.”

Sciberras found that products, including gift cards, Breville toasters and Gold Coast hotel accommodation had point values of 0.3-0.64 cents per point when redeeming.

When it comes to products, the best value purchase is a standard three-day hire car, which delivers 0.71 cents per point.

But when redeeming points for flights, those purchases delivered a point value of 0.58 to 4.7 cents per point.

The value per point is calculated by taking the cash price and subtracting the taxes, and then dividing this subtotal by the total points required for redemption. The dates for the Virgin Australia Hong Kong flights are for immediate travel (ie, departing 1 day out and returning 3 days out), as Virgin only releases reward seats a number of days out from departure. The Qantas Melbourne-Sydney flights are for immediate travel (ie departing 1 day out and returning 3 days out), but did the Qantas Sydney to Los Angeles flights for late May 2020, where more reward seats for Business might be available (before school holidays)

But you should use your frequent flyer points to buy products in some circumstances

While you’ll generally get better value for money by purchasing flights, there are times when using points to buy products will be a good idea.

“For instance, when your points are about to expire and you aren’t looking to fly anywhere soon, or for those who don’t particularly enjoy flying, my suggestion is to purchase products when they are on sale in airline rewards e-stores, where you will use at least 35 per cent less points,” Sciberras said.

“For example, a Delsey trolley case and a DeLonghi Nespresso Machine can each cost almost half of their original price in points during a promotion period.”

Yahoo Finance’s All Markets Summit is on the 26th of September 2019 at the Shangri-La, Sydney. Check out the full line-up of speakers and agenda for this groundbreaking event here.