How useful are Woolworths Rewards?
Any visit to a Woolworths or partner store would have exposed you to the Woolworths Rewards program: the garish orange logo is hard to miss. Like Flybuys, Woolworths also offers its own line of credit cards to increase the points you can earn. So is Woolworths Rewards worth it and should you consider changing supermarkets? As we wrote for Flybuys:

"The answer is not straight-forward and not only does it come down to your own personal circumstances and preferred outlets, but the myriad offers themselves can sometimes seem compelling, while at other times close to useless."

That being said, you should also join rival program Flybuys, even if you don't shop regularly at Coles and their partner stores. This way you can forget about being loyal and just shop wherever you want and earn points.

Using points: discount vouchers or frequent flyer points?
Woolworths Rewards has two major redemption options: discount vouchers or Qantas frequent flyer points. By default, you will be issued the vouchers, so if Qantas points are your goal, you'll need to go into your account and link your Woolworths Rewards points to Qantas.

Qantas is also Woolworths Rewards only airline partner. If your preferred frequent flyer program is not Qantas and you want airline points, it won't provide much value for you. In this case, you'd be better off with the discount voucher. At the current conversion of $2,000 earning 870 Qantas points, you would need to spend a significant $20,000 to get enough points for a short one-way flight between somewhere like Sydney and Melbourne (8,000 Qantas Frequent Flyer points). This flight would also require you to chip in around $35 in taxes and surcharges (the amount can vary, depending on the route). A return trip would need $38,000 spent at Woolworths and an additional $70. This also assumes you can get award flights when you want to fly. By contrast the $38,000 would earn $190 in discount vouchers that you can use in increments.

On the other hand, if you already make use of the Qantas frequent flyer program - and prefer to shop at Woolworths - the Qantas points can be a way to gain flight rewards at a marginally faster rate. A $10 shopping voucher values Woolworths points at 0.5cents per dollar spent, whereas the Qantas points options sees a drop to 0.435cents per dollar spent. This is identical to offers by rival Flybuys.

Woolworths Supermarkets
In the Flybuys section we wrote "Some people are supermarket loyalists, others are indifferent. Whatever your preference, don't get suckered in to the whole buy more to get more points promotions. At 0.5cents value per dollar, it is simply not worth the temptation to spend more on something you wouldn't normally buy just to get some more points. Unnecessarily spending just 50cents extra on a $100 shop will negate the benefit of what you'd earn on the $100."

Woolworths will occasionally offer bonus deals for extra points if you hit a spending target. These can be good value, provided you only buys items that you would regularly purchase. Shampoo, soap, dishwashing tablets, laundry detergent are items you could use to get to the higher spend target level if needed. Avoid buying extra food, especially treats like chips, biscuits, as they are likely to be eaten faster and you've just chewed threw any extra value you may have thought you were getting.

When we covered the best petrol loyalty programs, we noted that by themselves Woolworths Rewards at branded Caltex stations are barely worth your time. You can always hit the FuelCheck site and see if it's worth visiting Woolworths Caltex for the 4cents off, assuming you have a voucher. Based on the Australian average petrol spend of $1,800, Woolworths Rewards at Caltex will earn 1,800 points per year, or $9/783 Qantas points in value. In weekly terms, that's about 17cents of benefit. If you save just 1 cents per litre by filling up elsewhere, you'll be ahead. However you can increase you points load by following our guide Save up to 10% in points & benefits when buying Caltex petrol.

Caltex Woolworths
This is an example of a Woolworths Caltex petrol station. Despite the 'Star Mart' logo, it still takes Woolworths vouchers.

At one point per dollar spent at BWS (but notably not the Woolworths-owned Dan Murphy's), the incentive to shop there solely for rewards points is not great. But there is no harm collecting the points if you're going to shop at BWS anyway: just don't expect much in terms of points. Checking online sites for a cheaper price would be more beneficial. On a spend of $100, you receive 50cents of benefits at BWS, so paying $99.50 or less for the same purchases elsewhere will put you ahead.

If you shop at BWS, there is a better way to gain value. That process is covered in Liquorland versus BWS and can mean a saving of 5%, plus Woolworths Rewards points.

In Summary
As loyalty programs, both Flybuys and Woolworths Rewards are not giving much back as an incentive. Neither sufficiently reward your loyalty, so don't be loyal. The best overall strategy is to shop normally at the best outlet you decided to visit, and use either card as a way of increasing your points yield in combination with a credit card. If your credit card earns one frequent flyer point per dollar, adding in Woolworths can increase this to 1.435 per dollar spent, provided you use Qantas. By pooling frequent flyer points from different sources (credit cards, flying, Woolworths rewards) this approach can make it quicker to gain flight rewards, but supermarket loyalty won't give you much on its own. Don't expect to be redeeming a Business class flight to Europe anytime soon using only Woolworths Rewards points. [Note: we were asked about recently how many Woolworths Reward points were needed for this trip, and here is the answer. Business return on Qantas needs 256,000 points and around $1,000 in extra fees. That translates to spending $588,505 at Woolworths, or about 69 years for the average household supermarket spend. This drops to around 67 years if you include alcohol and petrol].