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Sainsbury’s is the new Avios supermarket partner!

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Yes, you read that right. Sainsbury’s has just been unveiled as the new Avios-earning supermarket partner.

Oddly, this isn’t the most important part of the announcement. What has been announced today will change the way you think about your Avios and how you spend them.

Am I overstating this? Not necessarily.

How to convert BA Avios points to Nectar points

Nectar points and Avios are to become interchangeable. Every route to earning a Nectar point is now a way of earning an Avios. Perhaps more importantly, every way of spending a Nectar point is now a way of spending Avios.

Given that, until today, your Avios spending options were restricted to flights, wine, car hire and hotels, this is a huge shift.

This is going to take a while to explain. This article focuses on the Sainsbury’s relationship and the Nectar conversion rate. A second article on Nectar and Avios – click here, but read this one first – starts to look at some of the new options available to you.

Let’s jump in.

How to convert BA Avios points to Nectar points

What is the conversion rate between Nectar and Avios?

The conversion rate will be:

  • 250 Avios = 400 Nectar points
  • 400 Nectar points = 250 Avios

Here is the key thing: there is no value loss in either direction. You can transfer your points as often as you want and you will still have the same amount you started with.

In theory, you could now keep your entire Avios balance with Nectar and just move the points across to Avios as you need them. There is no benefit to doing this, but you won’t lose out either.

An online tool will be available from Monday to allow you to move your points back and forth. I am assuming it will be instant.

A Nectar point is worth 0.5p isn’t it?

Yes. 99% of Nectar redemptions get you 0.5p per Nectar point. This means that you can look at the conversion offer like this:

  • 250 Avios = 400 Nectar points = £2
  • So …. 1 Avios = 0.8p

Since Nectar points are arguably almost as good as cash if you live in the UK since you can use them at Sainsburys, Argos, eBay and various other places at 0.5p per point, Avios points now have a floor value of 0.8p.

We will explain the impact of this in Part 2, but it is fundamental.

Nectar Avios light

What will I earn at Sainsbury’s?

On the face of it, the headline earning rate is poorer than Tesco.

You earn 1 Nectar point for every £1 you spend in Sainsbury’s. This means £1 spent in Sainsbury’s will earn you 0.625 Avios based on the 400 : 250 conversion.

In reality, it doesn’t work like this.

When Sainsbury’s reduced its earning rate from 2 Nectar points per £1 to 1 point per £1 a couple of years ago, it introduced ‘in app’ offers on top.

Each week you are offered a large number of bonus point offers via the app or website. Importantly, these are often for products that you normally buy. These are, effectively, extra base points as long as you buy what you usually buy – and as long as you remember to register for all the offers in the app.

I am told that the average number of Nectar points earned per £1 is substantially higher than the headline number of 1 per £1 due to these bonus points.

When does the new partnership start?

You will be able to convert Nectar points into Avios from next Monday.

However, nothing stops you from shopping in Sainsbury’s today and collecting Nectar points for your spending. You can then transfer them next week.

If you don’t have a Nectar card, you can register via nectar.com, via the Nectar app or by picking up a temporary card in a Sainsbury’s store.

How to convert BA Avios points to Nectar points

Is there a bonus to support the new partnership?

Yes.

If you convert at least 1,600 Nectar points into Avios before 14th February, you will receive a bonus of 500 Avios.

1,600 Nectar points would usually get you 1,000 Avios, so you will get 1,500 Avios instead.

Sainsbury’s is also giving you something. You will earn double Nectar points (2 per £1) on all shopping at Sainsbury’s between 25th January and 19th April.

Conclusion

I know this is a lot to take in ….. and wait until you read Part 2!

The bottom line is that I think this is a very positive move for Avios collectors.

You may or may not find that you earn the same number of Avios from your Sainsbury’s shopping as you did from Tesco, when all of the bonus Nectar points are taken into account.

The real win is that, because you can now convert 250 Avios into £2-worth of Nectar points, your Avios now have a minimum value of 0.8p each. This should change how you think about collecting Avios – and the choices you make to do so – and should also change how you spend them.

More on this to come.

As far as Head for Points goes, it will mean changes to how we operate. Any deal offering bonus Nectar points is now, by default, a deal offering bonus Avios.

Whilst a lot of Nectar partners have gone in recent years, there are still strong offers from Sainsbury’s Bank and Sainsbury’s Energy amongst others. Earning partners include Esso, Argos and numerous rail franchises. We will explore some of these deals in the coming weeks.

Click for the second part of our Nectar and Avios introductory coverage, where we look at possible arbitrage opportunities.

PS. Here’s your first odd arbitrage. You will be able to order any hot or iced drink, any size, at Caffe Nero for the equivalent of 219 Avios (350 Nectar points). For lovers of super-sized iced drinks, this suddenly becomes the best Avios redemption you can get!


how to earn avios from credit cards

How to earn Avios from UK credit cards (March 2021)

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

Until 9th April 2021, American Express is running the biggest sign-up bonuses ever seen on a UK payment card.

You will earn 100,000 Membership Rewards points on American Express Business Platinum (apply here) and 50,000 Membership Rewards points on American Express Business Gold (apply here) which is FREE for your first year. Points transfer 1:1 into Avios. Here are links to our reviews:

Amex Platinum Business American Express

American Express Business Platinum

100,000 points sign-up bonus – SPECIAL OFFER TO 9th APRIL – and a long list of travel ….. Read our full review

Amex American Express Business Gold card

American Express Business Gold

50,000 points sign-up bonus – SPECIAL OFFER TO 9th APRIL – and free for a year Read our full review

Here are your other options. There are two official British Airways American Express cards:

British Airways American Express card

British Airways American Express

5,000 Avios for signing up, no annual fee and a companion voucher for spending £20,000 Read our full review

BA Premium Plus American Express card BAPP

British Airways American Express Premium Plus

25,000 Avios and the UK’s most valuable credit card perk – the 2-4-1 companion voucher Read our full review

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

Nectar American Express

American Express Preferred Rewards Gold

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

American Express Platinum card Amex

The Platinum Card from American Express

30,000 points and an unbeatable set of travel benefits – for a fee 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.

If you have a small business, we especially recommend Capital On Cap’s Visa card which comes with a generous bonus worth 10,500 Avios:

Capital On Tap Business Rewards Visa

The most generous Avios Visa or Mastercard for a limited company Read our full review

(Want to earn more Avios?  Click here to visit our home page for our latest articles on earning and spending your Avios points and click here to see how to earn more Avios this month from offers and promotions.)

Comments (546)

  • Andrew says:

    Ok, so that makes Nectar App Offers even more interesting:-

    Bananas – 10N,
    Orange Juice – 50N,
    Blueberries – 180N,
    Crackers – 60N
    Genoa Cake – 60N
    Muesli – 80N
    Nectarines – 90N
    Caledonian Spring – 90N
    Strawberries – 60N
    Cheese – 90N
    Pizza – 150N
    Melon – 80N
    Biscuits – 50N
    Sausage – 60N
    Milk – 30N
    Ginger Beer – 90N
    Salami – 90N
    Figs – 60N
    Ham – 90N
    Mango 120N

    So of these that’s 1440 worth of bous Nectar Points definitely going into my trolley as a normal shop, or 900 Avios.

    Plus whatever regular Nectar reward is for the cost, and I get 3% back on my Spree Card too.

    If the offers keep up, that’s the equivalent of a free Domestic flights every 10 weeks for me.

    • Doug M says:

      Stop buying bottled water. Bad all round.

      • Andrew says:

        We’re not allowed compressed gas cylinders in the office.

        And even at home, no matter the advertising, SodaStream might result in less plastic waste but my goodness it’s £15 for a CO2 cylinder to carbonate 60l of water nowadays.

        Sainsbury’s charge 20p for a 2l bottle of sparkling water.
        SodaStream Costs 50p for 2 litres of sparkling water*.

        Plus the farce of queuing at Customer Services, or getting home and finding returned CO2 cylinders have been put back on the sales shelf.

      • Lee says:

        Judging other people is bad all round. Double bad.

  • James says:

    Great, was always unlikely to be Waitrose in my view, just doesn’t have the reach.
    My obsessive nectar point collection mocked by friends now has some real value… have just over 400,000 nectar points/£2000 value 🙂

    • Doug M says:

      Nice. Agree on Waitrose, plus I don’t think they understand that a loyalty scheme has to offer the customer something measurable.

      • Julian says:

        Well their loyalty scheme did measurably offer a free coffee and a newspaper but they have tried to get rid of both those by requiring you to provide your own cup (I just don’t shop there enough to be organised to have one with me when I do go there) and reducing the number of the free newspapers stocked and deliberately moving them away from the main car park checkout exit in Dorking so that you forget to pick one up.

        So far as I can tell the Waitrose loyalty card now seems to offer almost nothing back in relation to the vastly higher cost (especially fresh meat and fish) of shopping in their stores.

  • rams1981 says:

    £100 of Nectar points suddenly looking good

  • Sussex Bantam says:

    Bloody hell – this is huge news !

  • David says:

    Sounds like good news.
    Basic question (I haven’t been living in the UK for very long)…
    I have only ever shopped in Tesco. Where does Sainsburys sit in the price spectrum for every day spending for UK supermarkets (especially vs Tesco)?

    • stevenhp1987 says:

      Above Tesco, below Waitrose.

    • BuildBackBetter says:

      And below M&S and Ocado too. Above Asda, Aldi and Lidl

    • Super Secret Stuff says:

      Equal to Tesco, above Aldi, Lidl and Asda. Below M&S, Waitrose, John Lewis, Booth’s and Ocado

      • Chrisasaurus says:

        That’s a pretty comprehensive list that somehow missed Morrison’s!

        • Super Secret Stuff says:

          Damn, lol. I would say its equal, but…

          I’ve never had a morrisons close / convenient enough to me to use frequently, used them twice over lockdown and when I had amex offer pre covid.

  • Lou says:

    This is amazing! Especially in converting Avios into nectar points… What a nice surprise

  • Nick says:

    Great news. I shop at Sainsbury’s anyway, and make great use of the app offers. Win.

    I’m now just a bit upset I decided this time last year to start cashing out nectar as I had a huge stash and couldn’t see much getting better! Still, I have around half my balance left. And if BA devalues Avios again, I’ll still be able to spend them with not too much loss. Excellent news.

    • Rob says:

      Yes, this is a key point although I didn’t mention it. BA has very little ability to devalue Avios when you have a backdoor of getting 0.8p via Nectar.

      • BuildBackBetter says:

        Doesn’t that actually give an incentive to devalue avios? Their downside is capped at 0.8p. By devaluing they stop people getting above 1p?

        • Rob says:

          No. The reasons Nectar is crap is that everyone knows 1 point is worth 0.5p. People have a (probably too high) view of what an Avios is worth and this incentivises people to collect them in a way that doesn’t work with Nectar.

          For a start, no-one (well, apart from a few people in this thread) hoard Nectar points. With 99% of redemptions being worth 0.5p, there is need to sit on them. People cash out every time they get to 500. This is terrible for Sainsbury’s cash flow and for customer loyalty. Because Avios are worth more for long haul premium, you are encouraged to sit on them – great for Avios cashflow.

          • Super Secret Stuff says:

            I sit on them as I was waiting for a new travel partner… Bingo!

          • memesweeper says:

            I’m a hoarder, but only because of the double-up thing. Max out twice a year 🙂

          • meta says:

            I hoard them as well because I shop through ebay regularly and you can double dip through Voldemort site (or triple dip if you count spending on the points credit card). Ebay also runs 6x, 8x Nectar points and higher payouts (up to 10%) as well. So it can be lucrative. Hope this continues.

          • M says:

            Rob your analysis in this case is fundamentally wrong. You are expecting people to be economically rational…they aren’t. There’s lots of behavioural things that go into it which means this behaviour doesn’t happen. Plus you would be surprised to realise how few people know the value of a Nectar point. 99% of people do not cash out every time they get to 500, probably the opposite. I can assure you that the average Nectar balance isn’t less than 500 points!

            Customers save them for their Christmas shop. They get a fuzzy feeling from getting their Christmas shop for free. They also save them up to buy iPads. And they save them for double up when the points are worth twice as much.

          • Rob says:

            If it was so great, we wouldn’t have seen company after company dumping Nectar over the last 5 years, not one new partner of note joining and Sainsbury’s being paid to take the business away.

          • TeesTraveller says:

            I have experience of dealing with Nectar from a few years ago and in my view the reason that it did not work for all the other partners was that there was one dominant one (Sainsbury’s) and lots of smaller ones. All Nectar cared about was keeping Sainsbury’s happy and getting smaller partners to buy in to the regular points update mailings.

            Uptake for our company was far higer than Nectar modelled it to be so after a few months into a multi year contract we were faced with actively trying not to promote Nectar. It became a massive liability to the business with little proven benefit.

            The hording for Christmas was a genuine thing (as was people cashing out at 500 points which all parties hated). The Tesco/Avios relationship was highly envied even then and I remember seeing research that showed a significant proportion of the Clubcard base shopped at Tesco purely for the Avios conversion opportunity.

          • Brian W says:

            @M

            “I can assure you that the average Nectar balance isn’t less than 500 points!”

            How exactly can you assure us this is correct?

          • Rob says:

            What is the median though?

  • Anna says:

    There is no Sainsbury’s in my town 🤣

    • jil says:

      delivery? I don’t usually shop in S before covid, but they have quite a lot of free delivery slots (early morning and late evening), quite useful during covid.

    • AndyGWP says:

      Still a little bit of time to put your house on the market and take advantage of the stamp duty holiday 👍🏼

    • Jill ( Kinkell) says:

      It would be a round trip of 50 miles for me. Maybe I could do one shop a month in Nairn, the rest in Tesco ( a mere 4miles away!) I do have a Nectar card…..can’t remember when I took it out, or when it was last used, but it seems I have over 5000 points. . At least I’m set up to trade 1600 for the 500 bonus.

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