If you love earning credit card rewards points but don’t really like flying, Virgin has a solution. It has announced Pay with Points, an Australian-first initiative that enables BP customers to pay with Velocity Points at the point of sale.
BP and Velocity have had a direct partnership since late 2014, whereby all members of Velocity Frequent Flyer can earn points on fuel and retail spend at BP by swiping their Velocity card in store. Now, though, it’s a two-way street, with Velocity members able to use their points for fuel or other purchases.
Specifically, customers can redeem between $10 and $60 off their eligible fuel and instore purchases at participating BP service stations. It’s the first time an Australian airline loyalty program has allowed its members to use their frequent flyer points as currency in a retail store.
BP General Manager, Marketing & Offer Development Adam Arnold said: “This new offer will help Australians rethink how they refuel. The cost of fuel is a significant household expense, and we want to help reduce the impact on household budgets by opening up more ways to pay, thanks to our partnership with Velocity Frequent Flyer. “This offer is an evolution of our best-in-class promise to our customers. BP’s focus continues to be on how it can best serve its customers and provide them with the benefits they want and need,” said Mr Arnold.
What’s the rewards point redemption rate?
According to Virgin and BP, the Velocity points redemption rate in BP stores will be 1,667 Velocity Points for $10 of value.
A Canstar Blue survey of 2,600 motorists found an average monthly fuel spend across the country of $132, ranging from Western Australians at $110 per month to Victorians at $140 per month. 66% of drivers take measures to limit their fuel consumption, with 42% using their car less to save money on fuel and 20% monitoring fuel prices on a day by day basis.
For many drivers, then, rewards points could be a good savings strategy.
Is it a cheap reward?
Short answer – not really.
Canstar’s research team has tallied up the relative value of redeeming Velocity points for fuel, a gift card or a flight and calculated the following per-point value:
|Reward||RRP*||Points required||Taxes & Charges||Value of 1 point (cents)|
|$100 Woolworths/Coles gift card||$100||18,000||$-||0.56|
|$10 petrol at BP||$10||1,667||$-||0.60|
|SYD-MEL one-way economy||$155||7,800||$21.11||1.72|
|SYD-MEL one-way economy (on sale)||$99||7,800||$21.11||1.00|
|SYD-LAX one-way economy||$1,030||44,800||$106.47||2.06|
|SYD-MEL one-way business||$750||15,500||$21.11||4.70|
Source: Canstar.com.au *RRP of flights based on a selection of Virgin Australia fares at least six months in advance of July 2016.
How to redeem Velocity points for fuel
- Create a 4-digit Velocity PIN at velocityfrequentflyer.com/createPIN Once a PIN has been created, the default setting is a $10 BP in-store redemption option, however this value can be changed at any time up to $60.
- Swipe Velocity membership card in store before payment
- Redeem The purchase can be paid for with Velocity Points if the value of the purchase is equal to or above the dollar value of the BP in-store redemption option.
Photo: John Kirk | iStockphoto