Frequent flyer points are a form of currency and, like all currencies, have a value. However, whereas it is reasonably easy to know the value of the Aussie dollar, Alan Kohler doesn’t give a nightly update of frequent flyer point values on the 7.00 pm news…

Qantas Frequent Flyer is the big daddy of Australian airline loyalty schemes, with around 15 million members. The valuation of a QFF point depends on several factors, including the ability to earn, the ability to redeem, and the propensity for devaluations. However, DMARGE reckons one QFF point is worth about 1.9 cents (Australian).

What do we base that on? Firstly, QFF points have a high level of utility in Australia. They are easy to earn… and easy to burn. Qantas point redemptions start at 8,000 points plus around $50 for a 600-mile-or-less nonstop flight. That will get you from Canberra to Brisbane, Sydney to Maroochydore, and Adelaide to Melbourne. 

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Using that 1.9 cent figure as a jumping-off point, a point earned for less than that — and redeemed for a good or service worth more than that — is a good deal. Conversely, if you spend 3 cents to earn a point and regularly redeem that point for a good or service worth 2 cents per point, you should reconsider your relationship with QFF.

The best way to think about the 1.9 cent figure is as a benchmark. Ideally, you’d be earning most of your points for zero cost by linking your QFF with your day-to-day purchasing habits, whether you’re a Dad buying dog food at Woolworths and using Everyday Rewards or a businessperson paying work bills through a payment platform linked to QFF.

The trick with any loyalty program is not to let it induce you to spend more than you usually would but to let it influence where you spend your cash. You also need to know when to say no. If a purchase is cheaper at a non-QFF point-aligned outlet, you are better off going there.

Few people in the points game would have a large stash of points accrued for free. Some of the balance would have been through easy earns while other amounts come through less-easy earns. The idea is to keep the average per-point value of your QFF points pool below that 1.9-cent figure.

While having a redemption target like a 2026 trip to London is fine, saving points simply for the point of saving them is unwise. There’s nothing an airline likes more, Qantas included, than devaluing (or “enhancing”, in airline-speak) a QFF point. They do this by raising the redemption cost; this is kind of like inflation, only with an added “let’s screw our members over” attitude.

In raw monetary terms, the best value redemptions are long-haul flights in premium cabins. Later this week, you can still jag a last-minute business class seat on QF17 to LAX for 108,400 points plus A$342 in taxes. The cash fare is A$10,787; that’s almost 10 cents of value per point redeemed — a stonking deal, especially if you accrued those points for free or at minimal cost.

Sidebar: if you can stomach the risk and have some flexibility with dates, waiting until the last minute to grab a redemption is an interesting travel hack. More capacity is coming onto the market, and the post-pandemic premium leisure travel surge is coming off the boil, which is good news for passengers looking for last-minute deals.

In contrast, doing an inter-capital hop in monkey class at the cost of 8,000 points typically generates around 1.6 cents per point redeemed — way below the 1.9 cent benchmark, and therefore, according to the points purists, you’re better off paying cash…

But not everyone measures their redemptions in purely monetary terms. Plenty of people do their weekly Woolworths shop to gather points and fly a couple of times a year, maybe to see Grandma in Mildura. If you’ve carefully accrued your points to cover these trips, and, like a civilised human being, you go to visit Grandma because she’s not going to live forever, that redemption is delivering an intrinsic value far beyond the 1.9 cents per point spent.

That’s the thing about loyalty programs like QFF: the value you place on earning and redeeming points will largely depend on your personal circumstances. If you started evaluating every interaction with the program based on 1.9 cents, it would get old fairly fast.

Nevertheless, the benchmark valuation is worth keeping in the back of your mind; it’s a simple tactic to make loyalty programs work for you rather than you becoming a revenue stooge for the airlines.