Should I Cash Out My Frequent Flyer Points for Gift Cards?If you’re unable to travel at the moment, you may be wondering whether to cash out your frequent flyer points for gift cards or products.

You’re not alone. Many once-frequent travellers are now left with a stack of frequent flyer points that they can’t immediately use for travel. But is it really a good idea to burn your points now on non-flight redemptions?

There are two main things to consider here:

  1. Are your frequent flyer points likely to expire before you’re able to use them to travel?
  2. Will you get significantly better value for your points by waiting until you can use them to travel again?

Non-flight redemptions are typically poor value

The value of a frequent flyer point depends on how it is redeemed. When using points for reward flights or upgrades, points may be worth up to 6 cents each (occasionally even more). But when cashing in points for non-flight redemptions such as gift cards, merchandise, hotel bookings or wine, you’ll typically only receive around half a cent of value from each point.

This graph shows the approximate value of one Qantas Frequent Flyer point, depending on how it is spent:

By cashing out your points for gift cards, you’re not getting as much value as you otherwise could. At the Qantas Rewards Store, for example, you’d need to spend 9,370 Qantas points for a $50 Myer gift card.  At the Velocity Rewards Store, which recently reopened, a $50 Myer voucher would cost 9,900 Velocity points.

The cost of a Business class upgrade on a Virgin Australia Economy Freedom ticket from Sydney to Perth is also 9,900 Velocity points. That upgrade would have a nominal value of $566 – more than 10x the value – based on the fare difference between Economy Freedom and the cheapest Business class ticket.

As you can see, the value of redeeming points on the ground is not as high as it could be when redeeming in the air. But this could be a moot point if you’re unable to travel and don’t think you’ll have another opportunity to use the points on travel in the future.

Redeeming frequent flyer points on the ground

If you do wish to redeem frequent flyer points on the ground, one of the best non-flying uses of points is wine. You may be able to get more than 1 cent per point worth of value with Qantas Classic Wine Rewards.

Read more: How to Redeem Qantas Points Effectively

If you have Velocity points, the Velocity Wine Store has also recently reopened and will get you 0.625 cents in value for every Velocity point spent. Since reopening, the Velocity Wine Store has implemented a minimum order amount of 16,000 points excluding delivery costs.

Some Australian Frequent Flyer members have recently been using points to book accommodation. Until 31 December 2020, Qantas Hotels is offering 20% off the points required for hotel reward bookings. This means you’ll get 0.75 cents in value for every Qantas point spent on hotels. Meanwhile, Velocity Frequent Flyer has a current offer of 2,000 points back if you use at least 4,000 Velocity points towards a hotel booking with Velocity Hotels.

So, there are some reasonable options for redeeming frequent flyer points on the ground. But most Australian Frequent Flyer members believe it’s better to wait and use them once travel resumes. MEL_Traveller writes:

I would recommend holding on to them. Travel will reopen. If award seats out of Australia become difficult, there are lots of options with Emirates out of Asia which you’ll be able to use them on (for example, Emirates first and business class out of Bali used to have wide open availability, and you can couple that with either an economy redemption to Bali, or a cheap paid ticket, when the time is right.)

Your frequent flyer points won’t necessarily expire

If your frequent flyer points are not likely to expire soon, there’s probably no need to panic-spend your points on a toaster right now.

With some international frequent flyer programs, points or miles do expire after a fixed period. For example, all Singapore Airlines KrisFlyer miles and Malaysia Airlines Enrich miles expire 3 years after they are earned. There may be limited opportunities to extend the validity of miles in these programs for a small fee. Other than that, it’s a case of “use them or lose them”.

Expired points are worth nothing. So if you have frequent flyer points that will expire imminently, and you really don’t have any prospect of using them for flights, then it could make sense to cash out your points for gift cards or products. Singapore Airlines is even giving 30% off full miles KrisShop redemptions until 30 September 2020.

There is some discussion about redeeming KrisFlyer miles on the ground here: Alternative use of airline points

But with Qantas Frequent Flyer and Virgin Australia Velocity – as with many other frequent flyer programs – points do not expire as long as your account remains active. With Qantas, this just means you need to earn or redeem at least one point every 18 months. There are even ways to earn Qantas points for free, like with the Qantas Wellbeing App, so this isn’t difficult. To prevent Velocity points from expiring, you just need to earn or redeem at least one Velocity point every 2 years.

With this in mind, most Australian frequent flyers are saving their points until travel reopens…

My points are not going to expire (under current rules) as I use the Assure app every day. But now sitting on enough points for 2-3 Qantas OneWorld Award J fares (under current rules). I generally use these to construct a 14-16 sector RTW holiday. Have pondered a few times when & where I will get to use them, but not taken any action so far. Very reluctant to squander them on something that is very poor value.

No such thing as excess points unless you are about to expire.

Everyone’s circumstances are different

Of course, it also depends on your personal circumstances. Frequent flyer points have no value until they’re redeemed. If you have a stack of frequent flyer points in your account, you may have good reasons for wanting to convert them to something of value now.

exceladdict wrote:

Our personal circumstances mean we won’t be travelling for quite some time; I managed to empty my velocity account into JB gift cards just before they put a stop to it and have subsequently drawn down on my QF balance too. Definitely not the “best value” but there are earning opportunities aplenty for when the time comes to travel again.

Join the discussion on the Australian Frequent Flyer forum: Excess Points


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Matt Graham
The editor of Australian Frequent Flyer, Matt's passion for travel has taken him to over 60 countries… with the help of frequent flyer points, of course!
Matt's favourite destinations (so far) are Germany, Brazil, New Zealand & Kazakhstan. His interests include economics, aviation & foreign languages, and he has a soft spot for good food and red wine.

You can contact Matt at [email protected]