Knowing your rough value of a point is an important step in your points-thinking. It’ll help you when it comes to thinking about earning and using points systematically and rationally.

This guide will run through our methodology and our estimate of the value of different points currencies. Please make sure to read this guide in conjunction with our disclaimer.

Background

At Point Hacks, we have been providing our readers with the value of airline and other programs (such as bank rewards and flybuys) for many years, and are excited to take this one step further by providing, for the very first time, the value of points in hotel frequent guest programs.

These points have by far and large been overlooked in the Australian market, however, they can represent incredible value. This is especially true for special events, such as a romantic getaway or attending a major sporting event, where prices for hotel rooms can be exorbitantly high.

In addition, we launched our new methodology for valuing points in January 2020, which provides a refined approach that assesses many key factors of these programs.

In this Guide

This guide is split into two sections:

  1. Introduction
  2. Advanced

For those of you looking to get a basic understanding of how and why you should value loyalty programs, then just reading the Introduction section of this guide will be sufficient.

For those looking to get a deeper understanding of points valuation, then you are encouraged to continue reading the Advanced section of this guide. This section will present you with different examples where knowing the value of a point will assist you in making correct decisions to maximise the value of your points.

INTRODUCTION

Why consider the value of points?

All points are not created equal!

Many people believe that each loyalty program derives the same level of value to their members, but this is far from true! This is because each program sets the number of points that their members will earn when they transact with the program or its partners (e.g. purchasing a product or service), as well as the number of points required to redeem for a particular reward (e.g. a Business Class flight).

The arbitrary nature of how each program is structured from an ‘earning’ and ‘redeeming’ perspective makes the value of a point in each program unique. In addition, these values can change over time when the owners of frequent flyer and loyalty programs make changes to how points can be earned and redeemed.

Given that points valuations are quite fluid and constantly vary among programs, it’s important to determine the value of the points that you are looking to earn or redeem in order to get the most ‘bang for your buck’.

At Point Hacks, we live and breathe points and have come up with a methodology that determines their value for a variety of programs utilised by many Australian based travellers. Our objective is for you to recognise that your points have a value attached to them, and to use a methodology to determine that value, in order to make more informed decisions when earning and using points.

Our Valuation Methodology

Determining the value of a point is not an exact science and can often depend on the perspective of the individual. Point Hacks valuations are based on our opinion of the value at which we feel consumers could afford to ‘buy’ points knowing that they could safely redeem those points for something of higher value.

Our valuations are calculated from the perspective of an Australian based customer. We don’t delve into the complexities of our calculations in this guide, however, we can share the factors that contribute to the overall value of points for each type of program.

Airline Programs

  • The ease of acquiring enough points in the program to achieve your targeted redemption
  • The range of destinations you can travel to with those points and the availability of award seats
  • How strict the expiry conditions on points in the program are
  • What level of out of pocket costs are required when redeeming points for flights
  • How many points are required to redeem an award seat comparative to other similar programs
  • All values are based on a redeeming for a Premium Economy seat ex East Coast Australia

Hotel Programs

  • The number of points required to redeem a standard room in a major Australian city
  • The general availability of rooms that can be booked with points
  • The range of hotels within the program where you can earn or redeem your points (including price point and locations)
  • How strict the expiry conditions on points in the program are

Other Programs

  • The quality of Australian airline transfer partners
  • The quality of international airline transfer partners
  • The quality of hotel transfer partners
  • The rate at which points can be transferred from the program to airline and hotel partners
  • How strict the expiry conditions on points in the program are

Our valuations should be used as a guide only and you need to consider your own personal circumstances when determining the value of these points to you.

Our Valuations

Airline

Program NameValuations
(in Cents)
ProsCons
Qantas Frequent Flyer1.9Easy to earn with huge range of domestic and international redemption destinations (oneworld and Emirates)Difficult to find premium cabin availability and carrier charges are high on redemption bookings
Velocity Frequent Flyer1.8Good range of domestic destinations and ability to convert to high value KrisFlyer points for international travelLimited international destinations unless points are converted to the KrisFlyer program
Singapore Airlines KrisFlyer1.8Good seat availability and range of international destinations with low carrier charges on redemption bookings3-year hard expiry on points means its better to earn points in other programs and then transfer
Cathay Pacific Asia Miles1.5Can be used across the oneworld alliance for international travel and Qantas for domestic travelReward availability can be hard to find
Emirates Skywards1.5Has a large international network with ability to redeem or upgrade to one of the best First Class products in the marketPoints requriements can be quite high, and the ability to directly earn Skywards miles in Australia is limited, i.e. Amex & Citi
Etihad Guest1.3Access to Etihad premium cabins and ability to book Virgin Australia flights with lower carrier charges than VelocityPoints requirements can be quite high, and the ability to directly earn Etihad Guest miles in Australia is limited, i.e. Amex & Citi
Alaska Mileage Plan1.8Frequent offers in market to buy discounted points that can be used on oneworld partner airlines including QantasMany routes ex Australia are not able to be redeemed with miles, including Australia - Europe
British Airways Avios1.3Great-value redemptions for short-haul Economy and Business flights worldwide on oneworld carriersThe ability to earn Avios points in Australia is almost non-existent with no card partners
Avianca LifeMiles1.6Get cheap Business and First redemptions on Star Alliance carriersThe ability to earn LifeMiles in Australia is almost non-existent with no card partners; very strict expiry rule
American Airlines AAdvantage1.6Low carrier surcharges make this a useful program to use your Qantas Points on for travel in North AmericaAbility to earn AA miles in Australia is almost non-existent with no card partners; decreased earn rate on most Qantas Economy fares
Delta SkyMiles1.5Points never expireNo award chart makes determining points required for redemption difficult
United MileagePlus1.7Good range of destinations via the Star Alliance and low carrier charges; miles never expireAbility to earn United miles in Australia is almost non-existent with no card partners

Hotel

ProgramValuation
(in cents)
ProsCons
Hilton Honors0.6Can be used across a wide range and standard of hotels in the Hilton Group with good availability for redemptionPoints expire in 12 months if no account activity
IHG Rewards0.6Can be used across a wide range and standard of hotels in the IHG Group with good availability for redemptionPoints expire in 12 months if no account activity
Marriott Bonvoy1.2Can be used across a wide range and standard of hotels in the Marriott Group with good availability for redemptionDeval has made the program less appealing in terms of number of points required for a redemption
World of Hyatt1.7Fewer points required for a redemption than most programsMuch smaller range of hotels available than other similar programs and redemption availability can be limited
Radisson Rewards0.5Good transfer rate from Citibank Prestige card and gain Gold status with Amex PlatinumSmaller range of hotels available than other similar programs and redemption availability can be limited
Accor Le Club3.0Easily redeemed via a discount off your hotel charges at a rate of 2,000 points for every 40 Euros (~AUD$66)Smaller range of hotels available than other similar programs and redemption availability can be limited

Other

ProgramValuation
(in cents)
ProsCons
American Express Ascent1.0Highly flexible with no expiry on points and the ability to transfer to a large range of airline and hotel programsCan't transfer points to Qantas Frequent Flyer program. Ability to earn points limited to places where Amex is accepted
American Express Ascent Premium1.2Highly flexible with no expiry on points and the ability to transfer to a large range of airline and hotel programsAbility to earn points limited to places where Amex is accepted
Amplify Rewards0.8Ability to transfer points to the Velocity and Krisflyer programsTransfer rates to airline partner programs is low
ANZ Rewards0.8Flexibility to transfer to Velocity, Krisflyer and Asia MilesTransfer rates to airline partner programs are low, especially on international carriers
NAB Rewards0.8Flexibility to transfer to Velocity, Krisflyer, Asia Miles and NZ AirpointsTransfer rates to airline partner programs are low, especially on international carriers
Westpac Altitude0.5Flexibility to transfer to Velocity, Krisflyer, Asia Miles, NZ Airpoints and EnrichTransfer rates to airline partner programs are very low across all partners
Coles flybuys0.6Easy to earn on everyday spend and can be transferred to Velocity pointsTransfer rate to Velocity is low
Woolworths Everyday Rewards0.7Easy to earn on everyday spend and can be transferred to Qantas pointsCan take a while to earn sufficient points for a Qantas reward
Citi Rewards (Prestige)1.0Huge range of airline and hotel programs to convert points to including both major domestic carriersTransfer rates to airline partner programs are low, especially on international carriers
Citi Rewards (Signature)0.8Huge range of airline and hotel programs to convert points toTransfer rates to airline partner programs are low, especially on international carriers
CommBank Awards0.8Strong list of airline partners (plus 1 hotel partner) to transfer points to including both major domestic carriersTransfer rates to airline partner programs are very low

How to use points valuations?

Having an idea of the value of a point allows you to better assess whether you are getting good value from earning or redeeming points.

As a simple guide:

You are getting good value if you can earn points at a cost that is less than the value of the point you are acquiring; and

You are getting good value if you can redeem your points for a product or service that has a value higher than the value of the points you are using.

Summing Up

Point valuations are a subjective exercise and those that we have calculated here are our interpretation based on criteria that we believe are most important.

How you value points may differ, but whatever your method or your valuations, the main thing to consider is that you have a valuation in mind when earning and redeeming points. Without it, you won’t be able to extract the best possible value from your points.

ADVANCED

Below are a number of examples of how to determine the cost of acquiring points or the value you are getting from a points redemption:

Examples

Purchasing points directly from programs

While it is rarely ever a smart decision to purchase points at the standard rate unless perhaps you are just short of the points required for an award redemption, a number of airlines do offer promotional rates throughout the year to purchase points.

This is the basic example where the calculation is pretty straightforward.

If the cost to buy the points is less than the value of the point, then it may make sense to buy those miles. If the cost is more than other methods of purchasing the ticket, such as through cash or redeeming points may be financially smarter.

We say may make sense, because, at Point Hacks, we don’t believe that purchasing points speculatively without any planned use of those points, even during great buy promotions, is a wise move given the possibility of points devaluations in the future.

Using a credit card when a payment surcharge is imposed

If your main reason for using a credit card is to earn points on the transaction, then take note of any additional surcharges incurred for using that card. Most merchants don’t implement these charges for using a credit card but some do. In those instances, check that the surcharge you’re paying is below the valuation you place on the point you’re about to earn.

As an example, if your card earns you 1 point for every dollar spend and you are asked to pay a fee of 1.5% (i.e. 1.5 cents for every dollar) and you value a point in that program at 1.8 cents, then you’re acquiring the point at a rate (1.5 cents) less than our valuation (1.8 cents) which should be good value.

If your credit card only earns you 0.5 point for every dollar spent, then the cost of acquiring the point (3 cents per point), calculated as 1.5 cents for every 0.5 point earned, is more than our valuation (1.8 cents) and is therefore poor value.

You should also be careful of points caps on your credit card. If your credit card has a points cap and you have exceeded that cap, you won’t be earning any points regardless of the level of fees you pay to the merchant to use your card.

Earning points from purchasing products or services

There are many instances where you can earn points for purchasing products or services from a provider that partners with a points program (e.g. energy plans, insurance products, etc). Sometimes, the cost of these products are higher than their non-points earning equivalents and you should assess the value you are getting for the higher cost before you make a decision to purchase.

As an example, a standard product may cost $100 to purchase but the exact same product is $110 to purchase from the same provider if it includes points. In this instance, you may earn 500 points by selecting the points earning option but have paid $10 extra to get those points. This means you’ve acquired those points at a value of 2 cents each. If you value those points at 1.8 cents then this would potentially represent poor value as you paid more for the points than you believe they are worth.

If however, the product provider was running a ‘double points promotion’ where you could earn 1,000 points for the same price, you would have acquired the points at a cost of 1 cent which would represent good value as it is well below the value you believe they are worth.

Redeeming Points for an airline seat

Most points redeemed by the Point Hacks audience are for airline seats and in particular, premium cabin seats. Given the cost of airline seats varies greatly depending on the route you’re travelling, seasonality, time of day, airline quality, etc it can be hard to determine the value of a point redemption. It gets even more complicated when you take into account the out of pocket costs that airlines can charge.

As an example, you may be looking to use 8,000 points + $36 in taxes to get a one-way Economy seat from Sydney to Brisbane. If you were to purchase that seat with cash on a discounted fare, you may be able to get it for $150. Given you have to pay $36 to redeem your points for the seat, you are actually getting $114 in value ($150 less $36) for your 8,000 points which equates to 1.425 cents per point. If you value these points at 1.8 cents then this redemption would represent poor value.

If, however, you were to redeem 60,000 points + $400 in out of pocket costs for a Business class one-way flight from Sydney to Hong Kong, your value would be very different. You may be able to get that seat by paying $2,500 in cash. This means you’re getting $2,100 in value ($2,500 less $400) for your 60,000 points at a value of 3.5 cents per point. This is well above the 1.8 cent valuation in this example which would represent good value.

Redeeming points for a product or service

Many points programs have an ‘online store’ which allows you to redeem your points for products such as appliances or vouchers. The value of these redemptions is quite straight forward, as there is a clear cost for the item you are looking to acquire.

As an example, you may want to redeem 10,000 points for a $50 gift card. This equates to 0.5 cents per point in value. If you value those points at 1.8 cents each, then this redemption would be poor use of your points.

Alternatively, you may want to obtain a toaster for 30,000 points. The toaster can be purchased for $200 using cash. This equates to 0.66 cents per dollar which again, represents poor value given the 1.8 cent valuation on those points.

In general, a majority of redemptions from ‘online stores’ represent poor value compared to the value of a point from a premium cabin flight redemption.

Additional Information

By now, you should realise that knowing the value of a point allows you to make more informed decisions and extract greater value from them.

So if you are looking for a place to start (or to point someone else) to get on the road for earning more points from your day-to-day spend, check out the Earning Points email course here →.

The email course lays the groundwork for you to assess the different types of offers that are out there on a far more accurate basis. They may come from credit card bonuses or points earned from ongoing spend.

Disclaimer

Please be aware that the valuations on this Website have been prepared by Point Hacks using its own proprietary valuation system for the purpose of comparison between the value of rewards issued by different rewards programs. While we invest a great deal of time and energy into ensuring that our valuation processes are based on the most up to date and accurate information published by the rewards program, we do not warrant that there will not be a lag between the date that a rewards program issuer updates their rewards program and our valuation. The information published on this Website does not constitute a recommendation from Point Hacks to acquire any particular product or service. The valuation of a loyalty scheme is only one of many factors (including fees, costs, features etc) to be taken into account in acquiring a product or service and it is your own responsibility to ensure that any products, services or information available through this Website meet your specific requirements.  Point Hacks expressly excludes any liability arising from any person acting on these valuations to the fullest extent permitted by law.  Where conditions or warranties are implied by law and cannot be excluded, our liability will be limited to the re-supply of information. 

Point Hacks’s valuation system and the information published on this Website have not been reviewed or endorsed by any third party, including the issuer of any product or service described on this Website.  While Point Hacks aims to attribute a value to each loyalty scheme and reward for the purposes of comparison, we do not warrant that rewards earned through products or services available on this Website can be redeemed for cash, goods or services to the value ascribed to them by this valuation process.

What’s a point worth? Here are our latest valuations was last modified: February 20th, 2020 by Daniel Sciberras