Optus have officially launched their Qantas Frequent Flyer integration offering two points per dollar on Optus personal services.
The most refreshing part of this announcement was the lack of any asterix or superscript text to disclaim that two points was possible, 'depending on your circumstances' or 'excluding pre-paid and business'
Small business customers are also included, but the rewards rate drops off at the end of this year for small business customers.
However, it is not all roses when you read the fine print. Yes, it is a straight 2 points per dollar offer for consumer services, but you pay Optus for the privelege of paying your bill every time that you use your credit card, debit card or charge card with a 1% credit card surcharge. You'll also get charged if you pay at Australia post. Direct Debit is the only option that won't attract a fee, but setting up a direct debit for a telco bill is not something that we'd advise if you want to dispute your bill, the carrier has already taken your money and you'll have to make a case to get it back.
Fees and surcharges on the use of credit cards are destroying the value of rewards programs so it seems a little bit of 'give with one hand, take away with the other' when Optus charge a 1% credit card fee.
Here's a quick look at the personal economics for Optus customers. We're going to use an example customer on a $59 iPhone Cap....
Example 1
Paying $59 per month, this customer will earn 1,416 points in a 12 month period.
Optus charge 1% every time you pay the bill on credit card online, so you'll also be paying $7.08 in fees per year.
Result:
A Qantas flight between Sydney and Melbourne (return) is 16,000 points so if you're relying on this alone, there's 11 long years in claiming that flight on your $59 iPhone cap.
For the total spend of $8,000 there is also $80 in credit card transaction fees charged by Optus for paying your bill on that amount of money (1% credit card surcharge).
And, when you come to booking your reward fight with Qantas, there's also $47.06 in taxes making it $127.06 in fees and surcharges for that return flight to Melbourne.
So, can you actually get ahead with this program?
The simple answer is yes, but you should be smart about how you pay and pay with a Qantas Frequent Flyer credit card, preferrably in this case with the highest earning card, an American Express card.
Optus will charge you 1%, regardless if you pay via Visa, MasterCard or American Express. So...
Example 2
Get yourself an American Express card with 1.5 Qantas Frequent Flyer points per dollar and use that to pay your Optus bill. Here's all the Qantas Frequent Flyer cards where you'll earn points on your spending.
You'll be charged 1% ($80) regardless on your credit card transactions (no extra charge for using Amex), but you'll earn another 1.5 points per dollar on your American Express card (this is deemed as ok in the Optus Ts and Cs).
Now, at 3.5 points per dollar on an Optus bill, the $59 monthly iPhone customer will earn 2478 points per year, bringing the required wait time down to 6.4 years before they're jetting off to Melbourne. You'll still pay the the $127.06 in surcharges and taxes, but you'll be earning points faster.
Result
If you've got an American Express card or dual card with Qantas Frequent Flyer integration, use it. It will get you ahead faster.
If you're not already a member of the Qantas Frequent Flyer program, Optus will waive the fee saving you $82.50
Good / Bad News for Small & Medium Business
The good news is that Small and Medium Business customers with Optus will be able to earn points.
The bad news is that the 2 points per dollar earn rate will only apply until the end of the year, before then reverting to a 1 point per dollar earn rate.
Getting Started
You'll need to link your Qantas Frequent Flyer account with you Optus account. You can do that here
You can add up to 10 accounts, then call the Optus customer care to add more.
Unpleasant
The sting in the tail is unexpected forced opt in to allow Optus to contact you about other products and services...'hello sir, i'm calling on behalf of Optus and I think you'd be interested in...'
You'll be cross marketed to by Qantas and Optus and there's no way to earn the Frequent Flyer points without opting in. It is a forced option and their website won't link your account to your Qantas number without you giving yourself up for more marketing calls.
Other Things to Know
- The program is not available on Virgin Mobile.
- PrePaid recharges are valid for earning points
- Points are transferred to your Qantas Frequent Flyer account 30 days after payment being processed.
- Points are not earned on late payment fees etc.
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