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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 wing 10

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.


How to earn Avios from UK credit cards (September 2023)

As a reminder, there are various ways of earning Avios points from UK credit cards.  Many cards also have generous sign-up bonuses!

In February 2022, Barclaycard launched two exciting new Barclaycard Avios Mastercard cards with a bonus of up to 25,000 Avios. You can apply here.

You qualify for the bonus on these cards even if you have a British Airways American Express card:

Barclaycard Avios Plus card

Barclaycard Avios Plus Mastercard

Get 25,000 Avios for signing up and an upgrade voucher at £10,000 Read our full review

Barclaycard Avios card

Barclaycard Avios Mastercard

5,000 Avios for signing up and an upgrade voucher at £20,000 Read our full review

There are two official British Airways American Express cards with attractive sign-up bonuses:

British Airways American Express Premium Plus

25,000 Avios and the famous annual 2-4-1 voucher Read our full review

British Airways American Express

5,000 Avios for signing up and an Economy 2-4-1 voucher for spending £12,000 Read our full review

You can also get generous sign-up bonuses by applying for American Express cards which earn Membership Rewards points.

American Express Preferred Rewards Gold

Your best beginner’s card – 20,000 points, FREE for a year & four airport lounge passes Read our full review

The Platinum Card from American Express

30,000 points and a huge range of valuable benefits – for a fee Read our full review

Run your own business?

We recommend Capital On Tap for limited companies. You earn 1 Avios per £1 which is impressive for a Visa card, along with a sign-up bonus worth 10,500 Avios.

Capital On Tap Business Rewards Visa

Get a 10,000 points bonus plus an extra 500 points for our readers Read our full review

You should also consider the British Airways Accelerating Business credit card. This is open to sole traders as well as limited companies and has a 30,000 Avios sign-up bonus.

EDIT: Applications for this card are temporarily suspended due to IT issues with the British Airways On Business SME loyalty scheme.

British Airways Accelerating Business American Express

30,000 Avios sign-up bonus – plus annual bonuses of up to 30,000 Avios Read our full review

There are also generous bonuses on the two American Express Business cards, with the points converting at 1:1 into Avios. These cards are open to sole traders as well as limited companies.

American Express Business Platinum

40,000 points bonus and an annual £200 Amex Travel credit Read our full review

American Express Business Gold

20,000 points sign-up bonus and free for a year Read our full review

Click here to read our detailed summary of all UK credit cards which earn Avios. This includes both personal and small business cards.

Comments (47)

This article is closed to new comments. Feel free to ask your question in the HfP forums.

  • squills says:

    I’d accept the face value argument, given that even on 30% bonus purchase periods, private individuals can normally only do quite a bit worse. Ie at the moment you can buy 35,100 Avios for £447 = £1.27p each.

    But I bet that the extra in the bonus conversion periods (via Tesco) is mostly or partially covered by BAEC/ Which would explain why Virgin have recently offered more bonus conversions…they’re keener.

    • avidsaver says:

      35100 @ £1.27p each = £44,577 in total! I think not!

      • TimS says:

        Avidsaver, i think you are it by a factor of 100!

        You’ve confused pennies and pounds.

  • squills says:

    Oops meant that not to be a £ sign 😉

  • Oh! Matron! says:

    I seriously know know how I end up with so many Tesco Clubcard points every quarter. I have two of the tesco bank polices, never shop in there unless there’s a pre-order bonus on, but still end up between 10,000 and 25,000 abios every quarter! Long may it continue.

    • trix says:

      Sorry, but how do you end up with 10K-25K avios every quarter by having “two of the tesco bank policies”?

      • squills says:

        OP didn’t actually said that in isolation. Also said they use pre-order bonus opps when available.

        Can easily mount up, the life ins policies are presumably worth 2500 of that total with some bonus opps thrown in on top.

    • Lady London says:

      When you find out… do tell 🙂

  • whiskerxx says:

    So….as Tesco have UK sales of around £48billion and issue a point for every pound spent, the conversion to Avios is around 2% of the total?

  • Andrew S says:

    But avios payments is directly on to the bottom line… its pure profit.

    • squills says:

      Can you explain?

    • Rob says:

      Yes and no. It is clearly an immediate cash injection. However, plenty of redemptions involve cash payments out – eg Eurostar, hotels, car, sports tickets, events tickets, wine etc at roughly 0.5p per Avios.

      BA also has to pay partners for redemptions on non BA flights.

      Only BA redemptions (and Iberia) involve no cash payment out further down the line.

      • squills says:

        No problem with that but sounds like cash movement as opposed to profit.

        • Andrew S says:

          My reasoning is that supermarket transfers are not core business for avios. The costs of administering avios remain the same, the marginal cost of a flight are covered in fees, and an avios seat is a seat that otherwise would go empty…

          True I had not considered the “cash” options of partner redemptions but I would imagine only a small percentage are used for this purpose.

          You would assume there would be an accounting liability for future flights, but I have never seen evidence of this. Why would you have a huge “cash in the bank” balance carried by avios – you would use it to service the expensive debt?

          • Andrew S says:

            Raffles answered this. I didnt read his post clearly enough 🙂

  • David says:

    Given that it is a long term relationship, I would assume there are (reasonably) steady transfer payments from Tesco to pay for the ongoing issue of Avios. So any Tesco advance mega bulk purchase of Avios in previous years to allow for a decent period of fulfilment should not be an issue with reconciling the numbers (for the current year) used in the article. I wonder what kind of volume guarantees there are in their contract or any effect on charges…

    • Rob says:

      My understanding is that there is no guarantee on either side. BA wants to encourage Clubcard redemptions and is aware that Virgin (and to a much lesser extent Monarch) compete for transfers for people who want flights but – presumably for accounting reasons – doesn’t want to offer transfer bonuses as an incentive. Hence the competitions. BA is not as desperate for cash these days as it was 2-3 years ago, when the incentive of receiving a few £m from Tesco was a great reason to run a bonus.

  • Charlie says:

    I have a Tesco Mortgage, 4 clubcard points per pound spent (on both capital repayment and interest, including any overpayments I make). Do I win an award for being a points junkie?!

    (Actually I chose them because they had the cheapest overall package even after considering their steep mortgage fees.)

    • Andy says:

      I think it is 1 clubcard point for every £4 rather than 4 points for every £1 spent. This is what I get with the mortgage I took out with them this year, unless they used to offer more in the past?

      • Charlie says:

        Yes you’re right, not sure what possessed me to say 4 points per pound.

        I endured a year of having to call them up every month to get the points to post due to an IT issue on their end. To make things worse a lot the CS staff are not that great, although this was a while ago hopefully they have improved. Just a warnnig be prepared to call up a lot to get mortgage appliactions moving.

        • Andy says:

          I had the same experience during the application process – CS were not great, required constant chasing and it took far too long to complete. Glad it is done now. The rate they were offering was the most competitive though so it was too tempting.

          The points for our 1st months payment have just been added to my account, so no problems on that front thank god.

  • Andy says:

    When I signed up for a Nectar card yesterday one of the questions they ask you is whether you collect Avios. Any chance Avios might ditch Tesco and partner with Nectar instead?

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