Coles has struck a major deal with Virgin Australia's frequent flyer program

Photo: Getty / File.

Virgin Australia frequent flyers will be able to earn points when they shop at Coles under a new rewards deal that emulates the popular agreement between their industry rivals Qantas and Woolworths.

From Thursday, members of Coles’ flybuys loyalty scheme can swap points earned at supermarkets, service stations and with other partners for Velocity Frequent Flyer points that can be redeemed as flights or upgrades.

And in what Velocity chief executive Karl Schuster said was a world-first, shoppers will also earn “status credits” that can bump them into a higher membership class – giving them lounge access and other perks – when they shop at Coles, Liquorland and First Choice Liquor.

“What we found in our program is that our members want more opportunities to earn points and be able to redeem them for flights,” Mr Schuster said.

“Working with Coles and having over 1500 outlets at which you can earn these creates a level of ubiquity in this program that really puts it on another level.”

Every dollar spent earns flybuys members one point – and more under special deals – and members can now convert increments of 2000 flybuys points into 870 Velocity points.

That equates to an earn rate of 0.43 Velocity points for every dollar spent at the checkout, which is the same rate as the rival scheme offered by Woolworths and Qantas.

Flights between Sydney and Melbourne start at 7800 points on Virgin and 8000 points on Qantas, whose standard fares are typically more expensive.

Woolworths dropped its rewards agreement with Qantas in October 2015, but reinstated it 10 months later after a backlash from customers.

“We’ve been talking to Velocity since long before Woolworths and Qantas split, but I think [the customer backlash] did reconfirm that customers were clearly engaged with earning frequent flyer points at the supermarket,” flybuy’s Mr Story said.

Velocity members now also earn one “status credit” for every $100 they spend, up 120 points annually, which can boost them to higher levels of membership.

Members need 250 credits to advance from the basic Velocity membership to a Silver membership, 400 to Gold and 800 to Platinum, and members must earn similar amounts every year to maintain those levels.

This article was orginally published by the Sydney Morning Herald’s BusinessDay. Read the original here, or follow Business Day on Facebook.

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