Understanding the value of a point

Tackling the most asked question regarding points

You’ve been using pay.com.au and diligently earning your rewards points to use them on something valuable. But exactly how valuable, you might be thinking? In fact, the question relating to the value of a point is one of the most frequently asked questions we receive from customers. Let’s delve into this question further.

There is a general rule to follow regarding point values

There is a rule that frequent flyer experts follow that sees them gravitating towards a specific type of redemption. That’s because this type of redemption eclipses any other kind in terms of monetary value. Greater than redemptions for gift cards, merchandise from shopping malls (yes, that famous “toaster”) or credit back on your credit card. And even greater than some flight rewards like Economy Class flights, both short and long-haul, and short-haul Business Class flights. So, what is the rule?

Let’s have a look at some examples

Rules are always best illustrated by examples. Let’s look at some common redemptions to illustrate our rule above, using Qantas as our example.

You’re a pay.com.au customer who has quickly amassed a large stash of Qantas Points from paying your business expenses through our payment platform. Specifically, you have made payments using your Qantas direct-earning credit card and have elected to earn additional PayRewards Points from these credit card expenses.

To maximise your points, you also earn rewards on your bank transfers through our platform, to pay expenses that require this payment form.

Given that in this instance, you choose to transfer your PayRewards Points to your Qantas Business Rewards account, you are not short of Qantas Points. And now the fun part begins – using your points for a great reward!

You want to maximise the value of your points, and are considering using your points for one of three options:

We look at each of the above options in turn below. But before we do, just a note that the costs are exclusive of any tax deductibility that your business may be eligible for. To determine the specific tax implications for your business, please consult your accountant or a financial advisor.

Example 1: Redeem for $500 worth of gift cards

You want to do some minor business office renovations, and consider funding part of this cost with some Bunnings gift cards. Purchasing $500 worth of gift cards from Qantas Marketplace requires 116,050 Qantas Points. The calculation for monetary value in this example is relatively straightforward. We divide $500 by 116,050 to determine the cents-per-point value, which is: 0.43 cents per point Total Value.

Example 2: Economy class flight from Sydney to Melbourne (one way)

A friend’s wedding is also on the horizon, so instead of the office renos, how about funding the wedding flight to Sydney instead? And when I say horizon, I mean next week. Your business has been extremely hectic lately, and you’ve forgotten to book the wedding flights. As such, you’re facing last-minute pricing. Your flight details are below.

Attribute	Value
Date / Timing	1 week out for a Saturday morning flight
Cash cost	$247
Qantas Points required	19,100
Taxes, fees and charges	$57
Total Value	0.99 cents per point

Example 03: Business Class flight from Melbourne to New York (One Way)

Looking to get away from the everyday and go on a long trip to the other side of the world? What better city to travel to than the Big Apple? This city is enjoyable throughout the year – from seeing iconic structures like the Empire State Building and the Statue of Liberty to its vibrant arts scene and the magic of Central Park, there’s something for everyone.

Naturally, such a long flight is best done in lie-flat Business Class, but for many of us, the cost can be prohibitive. Let’s see the value you can obtain if you purchase the cost of the seat using Qantas Points.

Please note the following assumptions:

The cash cost has been derived from halving the cash cost of a return fare, given that the cost of one-way fares for international long-haul flights can be as much as 80% or more of the cost for a return fare.

Given the limited availability of Qantas Classic Flight Rewards, especially for highly sought-after flights like this example, we have also included Qantas Classic Plus Reward pricing. Qantas Classic Plus Rewards offers significantly greater seat availability than Qantas Classic Rewards.

Attribute	Value
Date / Timing	9 months out, Wednesday flight
Cash cost	$5,924
Qantas Points required (Classic)	144,600
Qantas Points required (Classic Plus)	383,500
Taxes, fees and charges	$761
Total Value (cents per point)	Classic: 3.57 Classic Plus: 1.35

As you can see from the long-haul business class example, both classic and classic plus reward seat redemptions offer greater value than the other two examples above. In fact, the classic flight reward redemption offers over 6x better value than redemptions for gift cards.

Also note that while we have used Qantas as an example in this instance, the same rule applies to all programs. This is why flexible rewards programs like American Express Membership Rewards and PayRewards can be so valuable. We’ll discuss flexible points programs in more detail in the following three modules.

Things to consider when assessing ‘value’

The concept of ‘value’ means different things to different people. Some view value solely in monetary terms, as we have in the three examples above. Others take a more holistic view on value. That is, not just monetary, but also considering other factors. In terms of frequent flyer value, one of the main additional factors to consider is the availability of reward seats.

So, while monetary value is essential, the ability to actually find the seats can be just as important, so remember to keep that in mind when considering the value of a point.

Calculate the value for yourself

If you’re looking for a quick and easy way to determine the monetary value based on your business expenses, make sure to check out our PayRewards Calculator. Enter your business expenses on a monthly, quarterly, or annual basis, select your payment method, and choose the type of reward you’re after. You’ll then receive an estimate for the total net value created. Simple!

Key takeouts

• In order to get the most value from your points, remember this rule:

• You’ll get the most value from your points when redeeming for long-haul Business or First Class flights, than from other flight rewards, with the least valuable redemption being non-flight rewards.

• Gift cards and merchandise generally earn you around 0.5 cents per point in value. Flights get you around 1 cent per point, but substantially more when redeeming for long-haul, premium seats.

• The concept of value means different things to different people. Some look just at the monetary value per point. Others take a more holistic view and include other factors like reward seat availability.

• Use the PayRewards Calculator if you’re looking for a quick way to calculate monetary value.

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