Calculating the value of your hard earned Qantas points is a tricky question.

And there’s a couple of ways to go about it.

Based on What You Paid.

One way is to value them based on what you paid for your flights. On a Red e-Deal flight from Sydney to Melbourne paying $169, you will earn 800 Qantas points. Valuing your Qantas points at $0.21 – which is the cost of acquiring them. I don’t think this is the right way to calculate the value though.

Based on Award Flights Cost.

Another way to calculate the value is to compare the price of a paid flight to how many Qantas points you would hand over for the same flight. For the same flights we used above, you would have to hand over 8,000 Qantas points and ~$35 in taxes. With the cash difference of $134, you’re handing over your Qantas points at a value of ~$0.017 (or 1.7 cents) each. ($134/8,000).

So which is the right way to calculate the value?

I would say the latter. Let’s compare it to real estate. The value of a house isn’t what you paid for it, it’s what someone else is prepared to pay for them. And in this case, when you book a Qantas awards flight, Qantas is effectively buying back your Qantas points.

And compared to Velocity points?

Earning Velocity points on domestic flights is based on how much you spend, not how far you fly. (I guess that’s why they’re not called miles!) But you earn 5 points per $1 spent on the flights, so it costs around $0.20 to earn a Velocity point – which is slightly cheaper than what it costs to earn a Qantas point.

For redeeming Velocity points for the same flight as Qantas (as above) with Virgin Australia, your points are valued at $0.024 (2.4 cents), making them more valuable.