Woolworths has performed a major backflip and reintroduced Qantas frequent flyer reward points for shoppers, two months after it angered many loyal customers by dumping them.
Disappointed shoppers were outraged when Woolies dropped Qantas from its loyalty program in favour of food discounts in October.
But analysts and consumer rights group Choice say the supermarket giant has missed the point by retaining aspects of its much-criticised revamp.
The struggling retailer has reworked the Qantas scheme into its new Woolworths Dollars program, which allows customers to earn money off their shopping bill.
Woolworths says that, under the six-year Qantas deal announced on Tuesday, customers will still earn Woolworths Dollars when they buy selected "orange tag" items but can choose to convert them into Qantas points.
"It doesn't address the major complaint people had on social media, which was not the fact they didn't have frequent flyer points, but the fact they weren't getting enough savings out of the new scheme," CMC Markets chief market strategist Michael McCarthy said.
Yet Woolworths said independent analysis by Monash University found Woolworths' new rewards program was twice as generous as that offered by rival Coles.
Woolies denied it had backflipped and said it had always been clear that it was still in negotiations with Qantas.
Choice spokesman Tom Godfrey said the group's recent grocery basket survey of leading brand equivalents found Woolworths was about 50 per cent dearer than Aldi.
Shoppers had also found the rewards scheme to be complicated and unrewarding.
"People have been quick to realise that it is not delivering much value at the checkout as they go around trying to collect these orange-tagged items," he said.
"It is a complicated rewards program - whether it is Coles or Woolies - they make you jump through hoops before you get some benefit.
"Meanwhile, you can go to a genuine discount retailer like Aldi, where everyone makes savings and no one has to hand over personal information to do so."
Some shoppers on the Australian Business Traveller website said they were happy with the new deal, but others said it was hard to find discounted items they wanted.
"Last week I spent $150 on a wide range of products and earned zero reward dollars - there weren't many orange ticketed products and those around weren't the products I'd buy," one shopper said.
Another said: "This seems to be more program on the run (but) glad the backlash was sufficient to force them back to QF's table."
Woolies has yet to give a launch date for the amended scheme, saying that it needed to make IT and systems changes before implementing it some time in the first half of 2016.
