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The importance of Tesco to Avios

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Avios emailed most members yesterday with details of the current Tesco transfer promotion that I wrote about last week.

To confirm, there is NO transfer bonus this quarter.  Instead, you will receive an entry into a competition to win one of 200 x 9,000 Avios prizes when you convert at least £5 of Clubcard vouchers.

There was one interesting titbit in the email.

Avios thumbnail

Apparently, 2.52 BILLION Avios points were collected via Tesco Clubcard in the last 12 months.

As I wrote here, 97 billion Avios were issued in total in 2013.  This means that Tesco is only responsible for around 2.5% of all Avios points issued.

(Of course, a lot of those 97 billion Avios were issued to BA and Iberia flyers who collected them ‘by accident’ and will not redeem them.  Anyone who transfers from Tesco is clearly serious about using their Avios so the 2.5% number probably understates the importance of the relationship.)

2.52 BILLION Avios is equivalent to 1 billion Clubcard points or £10 million of Tesco vouchers at face value.  You would assume that Tesco is paying across at least the face value of the vouchers to Avios, because other Clubcard boost deals simply would not work if partners received less.  That said, £10 million is only a drop in the ocean compared to British Airways and Iberia annual passenger revenue of €16 billion in the last financial year.

Love Clubcard, don’t collect Avios?  You should be reading our sister site, Shopper Points (www.shopperpoints.co.uk), which covers the latest Clubcard and Nectar offers without any distracting frequent flyer talk!  Why not check it out now?

Comments (48)

  • haasha says:

    Is it 2.52 billion transferred Avios or sitting in the accounts? I guess there is way more stacked in desperate wait for transfer bonus.

    • squills says:

      It wouldn’t be classified as Avios

      • Andrew S says:

        Now tesco’s clubcard liabilities would be interesting to see…;)

        • squills says:

          Dead right. I think they are generally happy to see unused stashes as they probably account for them well under par. That’s fair enough as obviously some do expire. I might trawl through the financial reports to see if anything comes up 😉

          • squills says:

            Had a scan but nothing much of interest, basically they do what they can get away with, I imagine.

            Clubcard, loyalty and other initiatives The cost of Clubcard and loyalty initiatives is part of the fair value of the consideration received and is deferred and subsequently recognised over the period that the awards are redeemed. The deferral is treated as a deduction from revenue.
            The fair value of the points awarded is determined with reference to the fair value to the customer and considers factors such as redemption via Clubcard deals versus money-off-in-store and redemption rate.

          • squills says:

            Says here that 95% of Clubcard points are actually redeemed (which would definitely curtail much opportunity for funny accounting, given the expiry deadlines etc)
            http://www.slideshare.net/fullscreen/dunnhumby/the-loyalty-guide-5-tesco-dunnhumby-case-study/5

          • Andrew says:

            ^ very interesting Squills

  • Bob says:

    Do some people still receive 800 avios per 250 of club card points? I signed up for automated air miles conversion years ago and tesco have continued to honour the increased rate on avios.