Collecting frequent flyer points is an effective way of keeping small-business costs down. Paul Skelton reports.

Managing the cost of doing business is one of the biggest challenges for small enterprises.

Loyalty programs such as Qantas Business Rewards (QBR) offer a benefit to small businesses in relation to existing spending, so they get more in return.

Frequent flyer points are particularly good, as the benefits can be put back into the business for growth. Qantas says that engaging with customers and suppliers is important for business owners, so travel often needs to be factored into business plans and budgets.

QBR members can earn Qantas Points for their business and receive discounts on flights. The more they fly, the more they save and the more points they earn.
The Qantas Frequent Flyer program has almost 13 million members, and QBR has more than 250,000.

Daniel Sciberras of Point Hacks, an online repository that helps individuals and businesses to maximise their frequent flyer points, says the QBR program is great for small businesses.

“For example, when flying with Qantas, a business (including sole traders) can add its ABN and allow the business and the individual flyer to earn Qantas points, as long as the business is registered for GST.”

Point Hacks was founded in 2011. It offers a free email course, access to a community of points collectors, and a raft of guides, deals and reviews.

“The main benefit of frequent flyer programs for small business is the same as it is for individuals,” Daniel says.

“Although the terms and conditions state that the points have no value – in the sense that you can’t sell them for cash – they have an inherent value depending on what a business redeems them for.

“A small business should not change spending habits or suppliers simply to earn frequent flyer points. However, accruing points as part of normal operations means adding value that would not otherwise be added.”

Such is the fervour among QBR members for collecting points it has been suggested that Qantas has created another ‘currency’ to rival the Australian dollar.

“Frequent flyer points across the world are known as ‘the second currency’ and it’s not specific to Australia,” Daniel says.

“There are probably hundreds of billions of points active across 12.8 million members of the Qantas Frequent Flyer programs, representing more than $1 billion in redeemable value.”

The points whisperer

About eight years ago, CPA Steve Hui was working for Macquarie Bank.

“I was there for about 11 years and had to travel a fair bit,” Steve says.

“One day, the bank was generous enough to send me on a business class trip to India.

“I realised that I was collecting these frequent flyer points that very quickly added up. Soon I had enough to fly business class on my own holiday. I didn’t have to do anything for them, the points just came.”

Today, Steve runs iFLYflat, a company he says is a kind of financial planner for frequent flyer point collectors.

“During this trip something in my brain sparked: how do I earn more points?

“And then I thought: if I can do it for myself, then why not do the same for other people who spend and fly much more than I do?”

Steve says that if you spend more than $250,000 on bills each year, iFLYflat can help you unlock the full potential of frequent flyer points.

“We want to help you to ask the right questions. It’s more than asking which credit card is best. That’s like asking what the best car is.

iFLYflat charges a flat fee of $700 a year to act as your personal points whisperer.

“This structure should get you one business-class flight to Europe every year.”

How to earn points

Daniel and Steve agree that the fastest way to earn points is to take out one of the many participating business credit cards.

All expenses paid with such a card will earn Qantas Points.

“Many small businesses have hundreds of thousands of dollars, if not millions, of expenses every month,” Daniel says.

“The points can quickly add up, providing an opportunity to redeem them on everyday expenses or required investment in the business.

“Complement this with a business rewards credit card and you get the advantage of deferring payment of expenses through the interest-free periods. This will maximise the use of your cash flow.”

Steve says a business could collect a million points over a couple years.

“You would have to be flying a lot to get a million points, but businesses could achieve it through paying bills alone.”

When it comes to selecting a credit card, Steve says, you shouldn’t get distracted by sign-on bonuses.

“Points per dollar spent is the key when it comes to credit cards. Sign-up bonuses are good, but they’re a one-time thing. Points per dollar spent will be ongoing.

“Let’s say you spend $100,000 a year on your credit card. Some cards will earn you only half a point per dollar and others will get you one point to the dollar. The difference is 50,000 points for that year. After the second year you’re 100,000 points down.”

There are also ways of ‘double dipping’ for Qantas Points on a single purchase:

• Each time you book and pay for flights, car hire and accommodation through qantas.com you’ll earn once as a Qantas Frequent Flyer member and again for your business when you include your ABN in the booking.
• Your business can earn points once with a Caltex StarCard and again when you pay using an American Express Qantas Business Rewards card.

Also, the more you fly the more you earn. QBR recognises three levels of business flying. As members meet the points threshold for each tier, they are rewarded with a higher earning rate and bigger discounts. The benefits for a business are based on its level.

Level 1

Businesses that earn up to 20,000 points from flights in a year gain:

• 20 points for every 100 points their flyers earn;
• 5% off base fares of eligible flights (excludes Red e-Deals and sale fares); and,
• a 20% saving on Qantas Club membership for employees.

Level 2

Businesses that earn 20,000 to 99,999 points from flights in a year gain:

• 30 points for every 100 points their flyers earn;
• 7% off base fares of eligible flights (excludes Red e-Deals and sale fares); and,
• a 20% saving on Qantas Club membership for employees.

Level 3

Businesses that earn more than 100,000 points from flights in a year gain:

• 40 points for every 100 points their flyers earn
• 8% off base fares of eligible flights (excludes Red e-Deals and sale fares);
• 2% off Red e-Deals; and,
• a 20% saving on Qantas Club membership for employees.

More than flying

The benefits from joining a frequent flyer program extend beyond flying.

In addition to savings on eligible flights, these programs offer points on everyday business expenses with more than 50 partners across banking, energy, payments and more.

QBR has a range of partners that let businesses earn points when purchasing products or services, including Caltex, Dell, Access Hardware, Harvey Norman Commercial and AMEX.

Specifically, business could earn:

• up to one Qantas point per litre at Caltex;
• up to four Qantas points for every dollar spent at Avis or Budget;
• up to two Qantas points for every dollar spent at Red Energy; and,
• up to three Qantas points for every dollar spent on professional and consulting services at Deloitte.

Steve points to the Qantas Wellbeing app and one of the more novel ways of collecting frequent flyer points.

“Sure, they use it as a generator of leads for their health insurance service, but by tracking your steps through the app you can actually gain frequent flyer points.

“Qantas has also partnered with Jaguar, so you can now get points by buying big ticket items like a new car.”

However, business people should diversify and not get locked into one program.

“It’s important to be a member of multiple frequent flyer programs. If you have all your eggs in one basket and prices go up there’s nothing you can do.

“Being a member of multiple programs also means you have a better chance of finding seats when you want to fly.”

Starting a business isn’t cheap, so collecting and using frequent flyer points is an effective way of keeping costs down, particularly in the early days.

“Using points is the cheapest way to fly, full stop,” Steve says.

“There’s simply no way to find a cheaper flight on sale compared with using frequent flyer points.”

Qantas encourages members
and their nominated Qantas
Points recipients to consult their
accountant or tax adviser to ensure
that they understand the possible
tax implications. For example, fringe
benefits tax (if applicable) may apply
in relation to the earning and use of
Qantas Points and Member Savings
under the Airline Reward Scheme.