The importance of Tesco to Avios

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• squills says:

  8 Aug8 August 08:09

  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/Avios.com. Which would explain why Virgin have recently offered more bonus conversions…they’re keener.

  • avidsaver says:

    8 Aug8 August 08:46

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

    • TimS says:

      8 Aug8 August 08:49

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

      You’ve confused pennies and pounds.

      • avidsaver says:

        8 Aug8 August 08:55

        I know that. I was trying to be ironic 🙂

• squills says:

  8 Aug8 August 08:51

  Oops meant that not to be a £ sign 😉

• Oh! Matron! says:

  8 Aug8 August 08:54

  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:

    8 Aug8 August 10:27

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

    • squills says:

      8 Aug8 August 10:37

      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:

    8 Aug8 August 11:42

    When you find out… do tell 🙂

• whiskerxx says:

  8 Aug8 August 09:43

  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:

  8 Aug8 August 10:05

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

  • squills says:

    8 Aug8 August 10:13

    Can you explain?

  • Rob says:

    8 Aug8 August 17:36

    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:

      8 Aug8 August 20:10

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

      • Andrew S says:

        9 Aug9 August 07:34

        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:

          9 Aug9 August 07:37

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

• David says:

  8 Aug8 August 11:41

  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:

    8 Aug8 August 14:28

    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:

  8 Aug8 August 12:59

  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:

    8 Aug8 August 16:10

    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:

      8 Aug8 August 17:43

      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:

        8 Aug8 August 20:02

        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:

  8 Aug8 August 16:16

  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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