The new partnership, announced on Friday, will see ANZ credit cardholders able to redeem a minimum 2,700 points in return for 2,000 Woolworths Everyday Reward points.
In cash terms, 2,000 Woolies points can be exchanged for $10 off a grocery bill or purchases at other retailers in the Woolworths Group.
These include Big W, BWS, Ampol, Healthylife, Petstock, as well as offers with partner service providers.
Alternatively, the points can be transferred as 1,000 Qantas Frequent Flyer points via Woolworth's airline partnership.
ANZ's direct airline partners currently don't include Qantas.
ANZ will also be joining Woolies' existing banking partner, the Westpac Group, which includes St George, BankSA, and Bank of Melbourne.
How much to you have to spend to earn points?
ANZ's Rewards points accumulate at different rates depending on the type of credit card and the accumulated dollar value of purchases during a particular credit period.
In dollar terms, customers would need to spend between $1,350 - $3,600 on their credit cards to earn 2,700 ANZ Reward points.
They would then have seven business days to redeem them as Woolworths Everyday Rewards points.
Alternatively, they can set Everyday Rewards as their preferred loyalty program and set automatic redemptions.
To be eligible they must be both ANZ Rewards account holders and an Everyday Rewards member.
Do rewards programs provide value?
The announcement comes in the wake of the Australian Competition and Consumer Commission (ACCC) raising serious concerns about rewards and loyalty programs.
It cites issues such as unfair contract terms, lack of transparency, and the potential for misleading consumers.
In March, its report into supermarket loyalty programs noted customers would have to spend thousands in-store to get a discount of $10.
Last month, the ACCC also took aim at airline frequent flyer programs with both Qantas and Virgin devaluing their customers' buying power.
The ACCC urges consumers to carefully review the terms and conditions of reward programs as well as consider any potential data collecting motives.
Rewards programs will also form part of the RBA's review into card surcharges, examining how they are ultimately funded by their members via interchange fees passed on from merchants.
What's behind rewards programs?
Rewards programs aim to shore up customer loyalty and retention.
They can also provide useful data on consumer behaviour which some programs can potentially use to encourage higher spending through bonus point offers and other deals.
ANZ said its new loyalty partnership is about giving its customers "greater choice and more value".
Meanwhile, Everyday Rewards said it's another way the program is helping members save hundreds of dollars a year.
ANZ customers can link their ANZ Rewards accounts to Everyday Rewards via the ANZ App or ANZ Internet Banking.
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