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You just hand it over whenever you make a purchase at the airport or when you are buying something Heathrow airport related, like Heathrow Express tickets. You usually get 1 point per £1 spent, but there are frequently bonuses and promotions.
You can turn the points into Avios at a 1:1 ratio which is a potentially good redemption if you can make good use of the miles, but not great value otherwise – it’ll depend heavily on your personal circumstances and Avios balance, of course.
For instant gratification, you can take 1p per point by using 500 points for a £5 voucher to spend at Heathrow (whether via an instant reward redeemed via your card at more limited outlets, or a paper voucher) or on the Heathrow Express, but I think you can do better than that.
The best use, in my opinion, is for parking. 500 points gets you an instant £10 voucher for the official Heathrow parking, making the points worth 2p each. Once you choose this option from your Heathrow Rewards page, it takes you straight through to the parking options and applies the discount at check out. You can use multiples of 500 points for bigger discounts.
My rule of thumb to work out the value of Avios is to compare it to the cost of a return flight to Nice, a journey I make a few times a year. A flight will cost me 9,000 Avios and £35. To get 2p/Avios, the flight would need to cost £215 – as I am usually able to get them for about £150 per person return, I would be getting less than 2p/Avios value.
500 Avios here or there isn’t really going to make a difference to a 160,000 First redemption, but I find that £10 off parking takes the super-fun POD parking at T5 down to around the price of the normal long-stay parking for a weekend, so that is where my Heathrow Rewards points go!