Amid all the media about the loming changes to the Qantas Frequent Flyer program, there are at least two elephants in the room nobody is talking about.

One is the impending launch of the mother-of-all-frequent flyer-initiatives, the expansion of the Woolworths Everyday Rewards program to include Qantas points on top of existing offers of discount fuel at co-branded petrol stations.

The other elephant is the true cost to consumers, directly and indirectly, of the spread of loyalty programs into the purchase of household necessities.

Once Qantas implements its participation in Everyday Rewards, Australia will become the only place on the planet where big groceries plus big petrol plus a big airline are joined in a triple alliance to influence if not dominate consumer choice on such a pervasive scale.

Meanwhile, the 31 March deadline, after which it will not be possible to transfer some credit or charge cards points to an individual Qantas frequent flyer account, continues to grab the popular “what will happen to my points?” spotlight.

“What will happen to my household budget?” might be a better question.

Qantas makes very good money selling its points to third party users such as the card issuers and department stores and telcos. It will make even more money if it doesn’t have to deal in those cards where there isn’t a direct earn agreement under which the points earned on a purchase of say a plasma screen TV go directly into the individual’s Qantas loyalty account.

But a crucial issue affecting airline loyalty schemes worldwide is whether chasing points is worth the cost when discount fares, even in premium cabins, are on constant offer.

It seems futile to spend more than $50,000 dollars on a card just to get enough points for a flight to New Zealand which is currently on special with several airlines for less than $130 including taxes and levies, or maybe $100,000 to get a ‘free’ return flight to Los Angeles when today’s deal is $971.

Study the fine print on the Woolworths Everyday Rewards website and ask yourself if someone hasn’t totally lost the plot when it comes to the realities of everyday household budgets even before Qantas joins in.

Under “about the card”, the website stars a rotating pop-up of suburban couples, touting the bonus cash card they can regularly earn for using it.

The “Sedgewicks”, for example, are ecstatic about earning a $100 cash reward. But they have to spend $1340 per week (including $101.91 in Woolworths stores) over four months to qualify. That’s $22,780 in 17 weeks to get $100.

What planet does Woolworths think it’s on?

Peter Fray

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Peter Fray
Editor-in-chief of Crikey