Ok, thought it would be better to open a new thread since, although this issue was brought up in another thread, it raises an entirely new issue, si IMNSHO, a new thread is warranted.

Got to the bottom of this with BP, and it seems that if you use the LPG Rewards Card (giving you a 2cpL discount) their systems convert it from a "Fuel Sale" to a "Retail Sale". The points difference is signifigant, depending on the current pricing of LPG.

Now this got me thinking about the value of Velocity points.

A fuel purchase on Saturday night was 49.11L @ 74.9cpL coming to $36.78 That would be 98 Velocity points based on 2 points per litre.

My LPG Rewards Card got me a 98c discount, taking it down to $35.80, getting me 72 Velocity points, based on 2 points per $..

So, is a 98c price saving worth foregoing 26 points. Or the opposite, are 26 Velocity points worth foregoing a 98c price saving?

So, as per the title of this thread, what is the value of a Velocity point?

As someone who spends close to $10K per annum on LPG, the actual dollar amount could be a reasonable figure, but so could the amount of points foregone.

Any thoughts on this?

This is just one example though, and I am looking for feedback as to what others think Velocity points are worth.

Dave

I should add that I can claim the cost of the fuel as a business expense, so the slightly increased cost of the fuel will reduce my tax liability. Not everyone will be in that situation though, but it will make things slightly more favorable towards leaning to getting the points.

Dave

I think it really depends on the circumstances - is it from the perspective of a member redeeming the points, from Velocity in issuing them or from a 3rd party paying to have them issued to you.

Personally, for me cash is king, I'd bank that $2 saving in my "Self Managed Frequent Flyer Fund" rather than paying extra for the points.

I once called up and asked about the Lumo Energy offer which gave you 6 cents per $ spent on your energy bill. However, the sales lady kindly pointed out that if I chose a plan which didn't earn Velocity, the energy price was cheaper - effectively you were paying extra to earn the Velocity points, and the value didn't seem that good.

My simple rule for QF is about 2-4c for classic redemptions in J/F, <1c for goods/vouchers

For VA.
The Cash Value is 0.55c per point. ($100 voucher, 18000pts)

Then taking as an example MEl-SYD 1Jun 8am.
Y Saver $149 or 9100 pts or 5800pts + 21.11
J $699 or 15000 pts or 11700 + 21.11

Y All points 1.64c / C&P 2.21c, J All Points 4.66c / C&P 5.79c

Yes although the difference can vary from State to State. In Victoria electricity prices are very competitive, in NSW much less so, especially if you're comparing discounts, which tend to be +++ in Victoria - base discount, then additional 3% for direct debit etc. etc.

Yes, this is about how I value them too, round about two cents a point. I tend to burn them on my regular MEL-SYD jaunts. Theoretically maybe you can get slightly better value on certain international flights but availability seems to be iffy, whereas for common domestic flights availability seems to be no issue at all.

On a philosophical point, I think the correct way to value them is the cash price you would otherwise be willing to pay, rather than the asking price. So for instance, I would not pay $625 out of my own pocket for business class on a short MEL-SYD jaunt, so I can't really pretend I'm getting 5.79 cents per point of value if I redeem for that.

Yes you mustn't make the mistake of valuing the points as if you would have paid the stupid prices offered by Virgin for business-class seats.*

Looking at the value for VA points for domestic premium cabin redemption, thanks to the current discount the one-way business seat SYD-PER is currently 28,700 pts + 16.75 and if that's worth $550 (my estimate) then the value of 1 Virgin point is 1.85c AUD.

(Plenty of availability too, unlike Qantas where most of the domestic premium cabin award seats suddenly vanished this year. However, if you can find an domestic award seat in business and you can buy the ticket from Qantas at a sale price then the domestic-upgrade is perhaps the best value for your sad QF points.)

The other high-value use of points is for US domestic awards, particularly the short but ludicrously expensive journeys to small towns served only by Delta.

*Like the joke about the angry Jewish father who, when his son said "I ran home behind the bus and saved 50c", he replied "you should have run behind a taxi and saved $10"

I did a current cost comparison - more to see if someone has an opinion on the assumptions I've made and the math I've used.

My two basic assumptions

- Work things out based on 'how many points does it take to buy a dollar'
- Define a dollar as a 'VA$' - so in effect what VA will charge rather than what that service might cost (if you booked the same service with other airlines on the same day.. )

Using a point in time by comparing the cost of redeeming a VA flight in either saver/flexi or business vs buying that flight on the day and doing this based on a one way SYD-BNE flight, assuming a CC surcharge, I get:

VA reward (surcharge only) value of 154 points per VA$
- Obviously using points to pay surcharges is not very efficient
- This is pretty consistent across all types of reward (internal or any seat)

VA reward (award/internal VA booking) value (including surcharge) of
- assuming cheapest fare of the day
- 66 points/VA$ against saver
- 26 points/VA$ against flexi
- 25 points/VA$ against business

I used $153/$393/$688 (approximately)

- assuming most expensive fare of the day
- 30 points/VA$ against saver
- 23 points/VA$ against flexi
- 21 points/VA$ against business

I used $333/$433/$813 (approximately)

So yes, the perceived value of a VAV point will vary on a daily (well, hourly) value of the airfare you've redeemed it against and your 'best value' is when you can redeem for business (assuming efficiency and unlimited points).

It's more efficient to pay the surcharges (except if you end up paying a CC fee on top as well) in cash.

You can also see that business pricing on SYD-BNE doesn't vary nearly as much as Saver pricing does (it can more than double between cheapest and most expensive pricing).

Comments?

I can never work out what the spend rate is for redeeming Velocity points for Delta flights. I'm particularly interested in transcon flights, New York to the West Coast

I personally would not bother going to BP just to gt 100 or so Virgin miles!

If BP had any brains they'd offering TEN points per $ for a while to get the loyalty rusted on, as Coles and Woolies murder them right now and Virgin is their only hope.

=========

I think it is 10,000 points to upgrade a short flight off cheapest fare bucket that costs many $100s more to buy.

So on a SYD-ADL 10K I'd do, if seats were there.

Valuing them at 1c a point as I do that means the upgrade "cost" me $100 and that seems about right.

The only thing is that, in Katoomba, when I am typically fuelling up BP is the only option, so if I need to put fuel into the car, it is going to be BP.

So, again, I am faced with putting in 100 litres of LPG, I can either get 200 Velocity points and pay $67.90, OR I can get the discount and pay $65.90, and get 134 Velocity points.

My question is though, is that $2 saving worth foregoing the 66 points? Also, the taxation implications of a slightly lower fuel bill for the night will come into play as well, but that makes the issue far too complicated.

Dave

Probably just teething issues, but for 134 points (valued by me at a dollar or so and my time to chase them is worth $100 an hour) I personally would not cross the road for!

However if that is your best choice anyway, you are mad not to use BP!

I am still with Lumo Energy, and valuded the Velocity FF points quite highly, have collected and used points, via varous means up to now.
The VA website now, for me anyway, seems to just stop running or hangs, I don't even get the blue circule that shows my laptop is working on the page, the little VA insignia appears and everything just dies on the website.
So I can't make redemption bookings, or even look up revenue fares.
This has been been ongoing for a while now.
I rememeber when the old Energy Australia was a partner with QF FF, this was before TXU/TRU took over the Energy Australia name.
QF booking for me always work to a perfect T, has never gone weird on me.
Though i do bag QF after their Jul 14 changes, in the end, they are better value in points than VA FF Velocity.

Notionally, I value both VA and QF points at 1c each. Which is to say if there is more than 1.5% surcharge to use a 1.5 points per dollar Amex, I won't use it.

QF's fuel surcharges detract from the QFFP value almost as much as VA's lack of destinations (compared to QF via OneWorld).

Still, a LAX-xBNE-MEL booking in Business for 94K points and USD55 is relatively reasonable.

(Not as good as an AA MEL-JFK in First for 72.5K Miles and USD80, although how long that lasts is another matter.)