Yesterday marked the first day of the devalued GrabRewards program, and unfortunately, it looks like things are going to get worse.
Grab has devalued KrisFlyer transfers by up to 14%, thanks to its removal of the preferential 1,500 (1,400 for Platinums) points: 160 miles conversion option. This leaves only the 10 points: 1 mile options available, as the graphic below illustrates.
No advance notice was given of this change, which appears to have taken place on the same day as the GrabRewards devaluation.
How did this happen?
Back in December 2019, Grab added five additional conversion options for KrisFlyer miles:
- 500 points= 50 miles
- 1,000 points= 100 miles
- 5,000 points= 500 miles
- 10,000 points= 1,000 miles
- 20,000 points = 2,000 miles
On the surface, adding more denominations was a good thing. This helped overcome a structural limitation with GrabRewards, where only one redemption of a given denomination could take place at a time. With only one denomination available, users had to wait up to 3 working days in between redemptions, cashing out at a glacial pace of 160 miles per transfer.
However, these new options represented inferior value. Under the old rate, 1 KrisFlyer mile cost 8.75/9.375 GrabRewards points, depending on status. With the new rates, 1 KrisFlyer mile costs 10 GrabRewards points, regardless of status.
At the time I said I didn’t mind the new options, to the extent they were offered in addition to the old rate. I personally wouldn’t use them, but they might make sense for someone with a big stash of points who’s willing to take a haircut for faster transfers.
Perhaps it was naive of me, because the new options are now the only options.
What do the new rates mean?
Before the GrabRewards devaluation and with the old KrisFlyer conversion rates, you could earn the equivalent of up to 1.14 mpd through GrabPay. With the nerfed earn rates and the devalued conversions, the best you can do is 0.4 mpd.
The table below illustrates the extent of the devaluation:
|Equivalent Miles Per S$1 Spent with Grab
|Grab rides & GrabFood
To put things in perspective, a Platinum member now earns 0.4 mpd when paying with GrabPay- that’s less than what a base member used to earn before 2 March!
Given the new GrabRewards redemption rates, 1 point is worth 0.2 cents when redeemed for Grab vouchers.
That same point could be converted to 0.1 KrisFlyer miles, so there’s a rough equivalency when you take a 2 cents per mile valuation. Perhaps that was the intention all along: to harmonize the value across redemptions.
For what it’s worth, it’s still possible to redeem GrabRewards points for KrisFlyer miles at the old rate if you’re in Malaysia- that’s what I saw when I was there yesterday. The more technologically astute amongst you will know it’s possible to trick your phone into thinking it’s in Malaysia when it’s not, so…
Should you still use GrabPay?
As I’ve said before, GrabPay and credit cards are currently not an either/or proposition. Some credit cards (but fewer and fewer each day) still give rewards on GrabPay top-ups, allowing customers to double dip on credit card and GrabRewards points.
However, when the banks eventually shut off all rewards for top-ups, consumers have a choice to make. Should I use GrabPay and earn a paltry 0.2-0.4 mpd? Or should I use a general spending card and take home 1.1-1.6 mpd? That’s surely a no-brainer for most.
So there’s no need to abandon GrabPay for now, provided you’re using the right credit card to top it up. That said, the writing’s been on the wall for a while, and this change further devalues an already weak GrabRewards value proposition.
Grab’s devaluation of KrisFlyer transfers, coming so soon after the GrabRewards devaluation, is quite the 1-2 punch. It came without warning, and I’m struggling to see how GrabRewards can continue to be a viable differentiating factor with all these body blows.
Platinum status now costs 2.5X more to earn, yet gives you earning rates that are below what entry-level members enjoyed before 2 March 2020. It’s incredible how fast the value has been eroded, and it looks like Grab will cease to be a meaningful source of KrisFlyer miles for all but the biggest spenders.