Points or cashback? Find out how to maximise rewards

Earn cashback or points?

  • When shopping online you should be earning rewards or cashback. Every. Single. Time.
  • Learn how to max out your rewards or cash back.
  • Find out how to double dip on earning cash back and rewards points on the exact same transaction.

When you shop online are you taking full advantage of the shopping rewards you can earn? The two main ways you can earn rewards are via cashback, or by earning extra airline points by shopping through the Qantas Online Mall or Velocity eStore. So how do you decide what option is going to give you the most bang for your buck? Let’s take a look.

What is the difference between cashback and points?

samesamebutdifferent

We’ve explored how cashback works and what the benefits are before. But if you have never taken advantage of this option, here’s a quick rundown.

Sign up for free at a cashback site such as Cash Rewards or ShopBack. Then whenever you are looking to make online purchases, visit these sites and click through to the store you wish to purchase from so that you can either get a percentage back on your purchase or a dollar amount back.

The amount of cashback varies a lot, from about 0.7% back on flights and sometimes up to 20.00% back or even more at stores such as Cotton On and Bonds.

The alternative way to get rewarded every time you shop is if you’re a Qantas Frequent Flyer or Velocity Frequent Flyer member. Then each time you shop via the Qantas Online Mall or the Velocity eStore you will earn additional airline points.

With the airline points rewards, it’s less clear to get a dollar value because you can spend points on so many different products and services. The end value of a 1 Qantas point or 1 Velocity point really depends on what you redeem it on. 

If you redeem your valuable rewards points for low-value stuff like gift cards or household goods then you end up getting low-value redemption rates. That's why you'll see news stories in the Australian press from time to time bemoaning the fact that Aussies need to spend as much as $20,000 on their credit card in order to get a lousy $100 gift card! More on that topic here.

At least with cashback websites, you will always know the amount of savings that you will be making in dollar terms. It's easier to understand. 

How do you decide what’s best for you?

Online shopping for cashback or points

Deciding what’s best for you generally depends on what your goals are. You can, in fact, already double dip and earn both cashback and points on a purchase if you pay with a rewards credit card.

But what we are looking at here is whether shopping at a cashback site or an airline's online store will be the best way for you to see your rewards soar to new heights.

Essentially a type of cashback website or rewards portal, the Qantas Online Mall and the Velocity eStore are both very similar business models. Each time you shop online you are rewarded with a return.

Because all these sites can have partner stores who have promotional offers at any given time, it can be tricky to do a direct side-by-side comparison of who offers the best deal.

How often you travel can be the key

plane

But generally, working out how often you travel is often the main deciding factor. If you plan to travel soon and want to have enough points to cover your flight or an upgrade, then making purchases from the relevant airline’s stores could get you there faster.

Earning points and using them for travel purchases tends to offer better value than when you redeem them for non-travel items from the online shop.

But points redemption can also require you to shop around to find the best options. There's not always points seats available on the day you want to fly.

So if you don’t necessarily need points for an upcoming trip, or you rarely travel, or you need to travel in peak times when there might be limited availability, then getting cashback could be a more attractive option for you.

Cashback sites can also give you more flexibility around the brands that you have access to. Because they are an independent business, unlike Qantas or Virgin Velocity they aren’t affiliated with any parent frequent flyer program, so you don’t face the issues of preferred partner restrictions. 

The result is that cashback sites give you access to deals and brands that you would not be able to find via the airline’s online stores.

What’s better value – cashback or points?

This is a tricky one to answer, as it really does come down to the individual product or service that you are purchasing. So the best way to get to the bottom of it is to do a side-by-side comparison. We take a look at making a purchase from two stores – The Iconic and David Jones – to see whether cashback or points comes out ahead in terms of value. 

Shopping at The Iconic

ShopBackQantas Online MallVelocity eStore
Offer7.00% cashback5 points per $1 spent2 points per $1 spent
Reward$282,000 points800 points
Value$28Approx $10 to $20Approx $3.50 to $8

This table shows that if you buy $400 worth of clothing from The Iconic (at the time of writing, although offers change quite often) what the relevant cashback or rewards points would be. 

At the time of comparison (May 2019), the ShopBack website offered standard cashback of 7% (or 4% if using one of their discount coupons). 

As you can see, we have given a range for the value of the airline rewards. This is because the relative value of the points redeemed can vary greatly depending on what you redeem your points for. 

Exchanging points for a gift card offers the least value. Rewards increase to around 1 cent per point for flight redemptions, possibly more if used for Business Class flights or upgrades. 

So, in this case, ShopBack tends to come out slightly ahead. But the catch is it can take up to 12 weeks to get your cashback, whereas points are added to your account much faster. So if you are looking to redeem them soon for a flight or a flight upgrade, this could be the better option.

Buying Bose Headphones from David Jones

ShopBackQantas Online MallVelocity eStore
Offer8.00% cashback5 points per $1 spent2 points per $1 spent
Reward$402,500 points1000 points
Value$40Approx $12.50 to $25Approx $4 to $10

This table shows the reward if you buy the same set of Bose QuietComfort® 35 Wireless Headphones II from the different stores. (Once again, offers shown were correct at the time of writing, but may change.)

The headphones are purchased from David Jones which is a participating partner store. They cost $499.95. 

As with The Iconic results, it completely depends on whether you are looking to redeem points soon for a flight, or would rather put cashback in your pocket instead.

Tips to make sure you don’t miss out on cashback or points

don't miss out

Once you’ve made the decision about whether cashback or points is the right option, you want to make sure you don’t miss out on maximising your rewards. Here are some lessons we’ve learned over the years about how to make the most of your online shopping purchases. 

1. Make a purchase by going to the cashback or shopping portal first

It might seem obvious. But all too often we can be in such a rush when making a purchase that it often skips our mind to see if our frequent flyer store or a cashback site can offer us a reward.

If you use a Chrome browser, Cash Rewards, Shop Back and Qantas Online Mall have handy Chrome extensions that you can install. So if you visit a website that they are associated with, a pop up will come up to remind you to activate your cashback first via the website. 

It’s a little bit harder to remember to purchase via the Velocity eStore, but if you bookmark the site and save it as your favourite site to visit, it can act as a good reminder.

2. Turn on your cookies

The way that the cashback site or online store recognises your purchase is to track it using a “cookie”. This is basically a text file that is stored in the browser files of your computer. It’s quite common and something that most websites have. This cookie contains tracking information so that any purchases you make after clicking on the relevant link will provide the cashback or reward to your account.

The cookie itself doesn’t contain any personal information. You can check if you have cookies active on your computer by going to the privacy and/or security settings in your browser. Then ensure you have selected to enable cookies.  

3. Pay with the right credit cards

We’ve shared before that you can double dip on rewards if you opt for cashback and also earn airline points through your rewards credit card. If you have different cards (perhaps one for each airline rewards program), be sure to use the one that will maximise your points balance.

As you can see, there isn’t a hard or fast rule about whether cashback or points offers the best value. But generally, if you are a frequent traveller, opting for points could be the way to go. Or, if you are after the maximum reward possible, then cashback could be the option for you. Do one or the another or better still, do both.

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