Smart: American Airlines’ Incentive To NOT Get A Refund

Filed Under: American

If you have an upcoming reservation on American Airlines, there may be a good reason to select to keep a future travel credit with the airline rather than get a cash refund.

American Airlines may be offering bonus ticket credits

I’ve received several reports from readers who have told me that American Airlines seems to be offering a 20% bonus voucher to those who elect to keep a future ticket credit with the airline, rather than accept a cash refund.

In other words, in situations where passengers are entitled to refunds (typically due to flight cancellations or major schedule changes), American is incentivizing people to accept a travel voucher instead, by upping the value on this.

If you had a $1,000 ticket, this means you could accept a $1,000 cash refund, or a $1,200 American Airlines voucher.

I asked an American Airlines spokesperson about this, and they didn’t have a comment to provide. Given the fact that they didn’t deny the data points I shared with them, that suggests to me that this likely is an official policy, but one they’re not publicly publishing.

American is offering a bonus to those who choose a voucher

Should you choose a cash refund or a voucher with a 20% bonus?

Assuming this policy is consistently applied for those entitled to a cash refund, should you be selecting a cash refund or keep a ticket credit with a 20% bonus? I’d say it comes down to your airline loyalty and future travel plans.

One of the positive things that American is doing is that these vouchers are valid for a year from when they’re issued, and that year is when you need to book by, and not when you need to actually travel by. So that’s potentially a pretty long window during which you can travel in the future.

Of course if you’re a once a year flyer and not loyal to American then that might not be worthwhile. However, as someone who lives in Miami and who flies American often, I’d gladly take an American voucher with a 20% bonus over a cash refund.

Of course this assumes you think American will stay in business — personally I think they definitely will, but I know others feel differently.

This could be a good deal if you fly American often

American has been mostly honest & transparent

I’ll be the first to rag on American when they screw up, but overall I have to give the airline a lot of credit for how they’ve handled changes and refunds in light of coronavirus. While airlines like United have tried to force customers into accepting vouchers, American has:

  • Maintained their original policy on cash refunds in light of schedule changes and cancellations
  • Has actually fairly proactively offered cash refunds to those who are entitled to them; of course they’ve encouraged passengers to maintain a travel credit instead, but frontline employees are empowered to start the cash refund process as well

They deserve a lot of credit for that, since it’s in stark contrast to what United is doing, and also in stark contrast to what most airlines around the world are doing.

American has been pretty transparent throughout all of this

Bottom line

Of the “big three” US carriers, American seems to be the first one that’s at least unofficially incentivizing customers to accept a travel voucher rather than a cash refund, by offering an extra 20% bonus.

Compare that to other airlines, which are just lying to customers about the ability to get a refund. I totally get all airlines are in a cash bind, but so are many consumers. If airlines want to keep peoples’ money even when they cancel their flights, then they need to make it worth their while.

Well done, American! See this post for more tips on cancelling flights in light of COVID-19.

Comments
  1. Right now I wouldn’t wait to cancel, I’d do so ASAP because it is clear that Trump wants businesses to return to normal. If that happens, airlines may not give those that would prefer to stay safely at home the option to cancel w/o significant penalties.

    Now for those who don’t mind the risk that may be ok, but for many others it wouldn’t be.

    I don’t know the likelihood of it happening but I think it would be foolish to ignore the possibility. Right now the world is messed up with incompetent and scared leaders and common sense is out the door.

  2. I’d only consider this if they had the voucher valid until 12/31/2021. I’m not sure we’ll be through this by March 2021, assuming they even had a 1-year expiration. I think Delta is only giving until 12/31/20 (not even a year) for their eCredit vouchers, which I personally wouldn’t take although with Delta you may not have any choice.

  3. My biggest issue/concern with taking a credit is the expiration dates on those credits. No one has any idea how long this will impact us and when things will get back to normal. If airlines were to offer the airline credits w/o expiration I would be somewhat more inclined to accept them although obviously a full refund would still be more preferable.

  4. If the voucher is only usable once and any value renaming on the voucher after use is forfeited, then I’d just take the cash refund. There’s a lot of uncertainty for both international and domestic travel right now such that I’m not sure a voucher above a certain dollar amount will be usable in a manner that would result in any net benefit. At least not in the next 4-6 months, probably.

  5. They really should extend the vouchers well into next year. There’s no telling when things will get back to normal.

  6. I’m with others on this one – this would be okay if they extend the life of the vouchers beyond the typical one year from date of purchase date. While some of this is for personal reasons (my job responsibilities won’t allow for any travel for about eight months beginning this fall), there is the more macro-level unknown of when things will be normal enough to allow for any travel going forward for everyone.

  7. Ben, sorry a bit off topic maybe.. in order to qualify for a free award cancellation on AA due to departure time change… What’s the rule here? What would they consider allowable time change to process the refund?
    Thanks

  8. Take the cash. I’m about to lose $1,200 because I booked it in June 2019 for an October 2019 trip, and then changed it until April 2020 and now canceled.

    I wish I never canceled it at all. Will look into reinstating, to see if it later gets canceled.

  9. Passengers with cancelled flights are unsecured creditors of the airlines. I bet you don’t see other unsecured creditors taking “credits” from the airlines. There’s a good reason for that. It’s stupid.

    The only creditors who accept credits like this are those who (a) are secured, so they’re already senior to the other schmoes, or (b) they are already hosed, so they have nothing to lose.

    You’re an idiot not to take the cash and run.

  10. My friend had a flight through Aer Lingus and they *only* offered her a credit + 10%. A nice incentive, but still shitty to not get money back.

  11. Expiring currency that can only be spent at one company—and in this case, a company that is circling the drain— is not worth just a little less than cash. It is worth a LOT less. Maybe if they offered a 1000% premium rather than a 20% premium..

  12. Please explain how vouchers work (global article, or update to existing article about airline policies, would be great). Is it a one time use with any remaining value forfeited, or can it be used for multiple trips? Can it be used for someone other than the originally ticketed passenger? Can multiple vouchers be used to purchase a single trip in the future?

  13. @ Hepworth — Good topic for another post. Generally speaking it has to be used by the same traveler, and it can be used towards multiple tickets. You can also apply multiple vouchers towards a single ticket, as far as I know.

  14. (1) they keep your money for extended periods of time
    (2) if you end up unable to travel within validity period of the voucher, for whatever reason, funds expire, and they won it all
    (3) if you only rebook with a small portion of the funds, and can’t use the rest, they won the abandoned portion
    (4) if you rebook with small portion for 1st trip, and want to use the remainder for a 2nd trip, they might have footnotes listing only 2nd trip or beyond require the usual change fee
    (5) if you rebook with more than the face value of the voucher and need to pay the difference, they earned your ADD COLLECT.

    and THIS, is how people fall for AA’s trap.

  15. When canceling a trip online that is eligible for a refund, you’ll be presented with the offer via the prefunds website. Note, the default option is a travel voucher. If you decline that option, you’ll then be presented with the 20% bonus offer which you would then need to decline to request cash. Note, the interesting thing is the voucher is valid 1 year from issue date (no mention of ticketing date).

  16. @ Ben (Lucky), or anyone with a similar experience…

    I have a roundtrip LAX-LHR ticket scheduled for late April/early May. I used a systemwide to upgrade the outbound when I ticketed in January. The systemwide was supposed to expire 1/31/20, but I was able to apply it to this trip without a problem. I also dropped from Exec Plat to Plat (lifetime) with the start of the new year.

    I called AA a couple weeks ago, as the conference I was attending has been cancelled. The agent told me that the flights had not cancelled and there was no advantage to cancelling before the flights cancelled — under the scenario in Lucky’s story, he may have been right. I also asked about what would happen with my SWU, he said it would be up to AAdvantage Customer Service, but he didn’t know what policy they would have.

    The outbound flight for this itinerary has now cancelled. I have not received notification from AA — I caught it when I looked at my account today. There is no evidence of the SWU being re-posted to my account.

    Anyone have any experience on what AA has been doing along these lines? Surely I’m not the only one in this boat. Now waiting for my callback (in 34-47 min!) from AA….

  17. @Disco – The SWU won’t be redeposited until you cancel the ticket. AA redeposited by expired SWU and extended the expiration to April 30, 2020. AA are allowing use of the SWU beyond expiry as long as the upgrade is confirmed prior to instrument expiration.

  18. @Jeff
    Yes, I’ve heard that Aer Lingus in offering 10% bonus, but the voucher is good for 5 years.

  19. @Kay – The outbound flight was already cancelled, so AA customer service said they would redeposit the SWU before I get the refund (which I’m hold for now). She confirmed that they are generally adding an extra 3 months to the expire date, and she said it would be 4/30/21, so I think I’m good. THX!

  20. Henry LAX prefers UA’s solution: 1) no refunds and 2) a 0% goodwill credit for going that route. So easy to defend!!!

    I would gladly welcome AA’s offer should UA offer it – but they are a follower and not a leader, so I have my doubts.

  21. Update to Ben’s original story: The AAgent I am just finishing up with had not heard of a 20% bonus for taking a voucher instead of cash, but she checked with a supervisor who confirmed it was true, BUT it’s only for those who cancel online, not for those who call in. The reason given: They are trying to reduce the call volume.

  22. I’m definitely in the cash camp. I want total flexibility when rebooking, especially now. No one can know how long this will last and not sure how these vouchers work. The old ones were almost useless.

  23. I want to thank American Airlines for getting me out of Barcelona Spain on March 19th. After BA left me with no flight after not allowing me to move my flight home up a week without a 28% surcharge on my roundtrip ticket. BA promised me my flights were good until 36 hrs. before takeoff and then cancelling them late in the evening by email, while not cancelling them in their flight computer.
    American employees were great, polite, helpful, professional. I will be looking to AA for my travel needs in the future. THANKS

  24. Doesn’t this mean if I want to purchase a $240 ticket, I should just buy a $200 ticket, cancel it, get a $240 voucher, and then book my originally desired itinerary?

  25. Take the refund. You never know when you’ll be able to use the voucher but the refund can be used for anything.

  26. @Lucky said: If you had a $1,000 ticket, this means you could accept a $1,000 cash refund, or a $1,200 American Airlines voucher.

    Smart idea, but not enough.

    Still BIZZARE that I have to call and ask that my miles go back to my account for a previously cxld trip. No luck getting thru to their call center, understood. Should happen automatically and not have to be done by the agent.

  27. For clarity, if I have a trip from upstate NY to FL next week 4/3 (Florida is refusing anyone from NY in without 14 day isolation –and that means not staying with family whom I am visiting); is it better to cancel online or wait to see if some or all legs of the flight will be cancelled? I see that most flights through CLT have been cancelled this week. Not sure what will happen next week…

    If I cancel online, are you saying I will see the option for a voucher or for a refund? What if I don’t cancel online and a portion of the trip is cancelled by AA, can I get a refund? What is the better course of action for getting a refund?

  28. What they arent telling you is if you take that voucher for 20% increase that 1200.00 flight when it gets back to normal that flight is now gonna be 1500 so u owe another 300..Take the cash screw the voucher….

  29. I booked a couple of tickets when there was uncertainty around the Coronavirus impact (around mid Febuary) and as U.S. airlines first began implementing free change policies. These tickets cost me about $40 and $70. The credit promo is certainly appreciated and while not much for my case, I’ll gladly take whatever I can. To support the airline, of course 😉

  30. JAL just moved my business revenue ticket from April 27 to April 26, 2020, for my SAN to Narita (transit) flight to Bangkok later, apparently going to a frequency of less than daily on this route. I cannot find any information on any fully paid business tickets on Japan Airlines and what to do with my April 26 departure bought last year. Any advice?

  31. They should all emulate Viking Cruises, which offers 125% in credit voucher, transferable. The kicker, however, is that upon expiration, and the voucher remains unused, the passenger can still get a full refund at that time. That, to me, is the way to retain the business/revenue (betting that the passenger will be tempted, and will try hard, to find a way to use the credit prior to expiration). It is truly an offer no passenger can refuse.
    BTW, as a private company, Viking Cruises perhaps has a lot more leeway in being creative when it comes to business strategies.

  32. take the cash.

    when things get back to “normal” and you need to fly, fly whatever airline managed to survive. although, american probably will- thanks to another massive bail out.

  33. Traveling in Early June to Aruba with my family, Purchased tickets in early December non refundable. Called American Airlines and they will cancel and give me a voucher. We still are planning to go to Aruba should I use voucher to buy Current tickets that have dropped $175 per person??

  34. We are not going to be on extreme lock down thru next year, please. If so, it won’t be due to virus but due to looting and riots. I automatically got a 12 month credit when I cancelled my three upcoming AA flights last week. Not sure if they will add a bonus but happy to take the credits.

  35. I dont get it – I wasn’t even offered the choice of a cash refund when I canceled!

  36. The ticket validity is one year from the date the original ticket was issued to begin new travel.

    To extend your tickets validity, we are willing to make an exception and would need to exchange your unused ticket into eVouchers. The vouchers may be redeemed within one year of the issue date toward the purchase of a ticket for future travel on American Airlines or American Eagle. To make this exception, we do deduct the change fee from the amount of the voucher. This would mean that your vouchers would be for $***.** each.

    If you would like to exchange your tickets, please cancel your reservation by either visiting us online at aa.com, or calling us at 1-800-433-7300. Once the reservation is canceled, please let me know in a reply email back to me and I can exchange your tickets.That was March 20,2020
    March 23,2020;
    Here is the voucher we promised. It’s valid for one year from today and you can use it to purchase travel on American/American Eagle for anyone you choose. Ready to book your flights? Simply book your travel on AA.com. When you are ready to check out, select the “Other Forms of Payment” option on the Review and Pay page, and enter the voucher number, PIN and voucher amount to apply your credit. For further assistance, call us at 800-433-7300.

    Thank you for flying American Airlines!

    I suspect our original flight was canceled between March 20 and 23. On the 24th it was no longer on the schedule. I’m happy with a voucher and I guess it’s our fault we lost $400.00, $200 each.

  37. We have a trip scheduled for Iceland in early June. AA is currently offering change fee waivers for travel through May. Should I cancel now, wait until they extend to June, or just wait until they cancel my flight? Do you believe travel to Iceland will be safe/available in August? Thoughts?

  38. @ Laurie Ros — Well since there are currently no waivers, I wouldn’t recommend cancelling and paying a fee. I would either wait for your flight to be cancelled or wait for a waiver. Unfortunately at this point it really is too early to predict when we’ll be able to travel internationally. My uneducated guess is that it’ll be 50/50 for August.

  39. I can confirm that this 20% voucher is being offered. The problem I see is that when processing the refund online (the only way), AA first offers you a travel credit with no 20% markup. It is only when you refuse this, because you are there for a refund, that AA offers you the 20% bonus credit. To get a refund, you have to decline the voucher offer for a 2nd time. If they wanted to play nice, why not offer the 20% from the beginning?

  40. Forgot one thing in my story. Our original issue date was June 5,2019. We could have commenced travel prior to June 5,2020 and paid no change fee. For us that wasn’t an option, that’s why we took what we did.

  41. My husband and I are still on the fence regarding our trip from Buffalo, NY to Hawaii in May. All flights were booked on aa.com. As of now, I have not heard of any cancellations of those flights. Any suggestions on the best course of action?

  42. I just called to get a refund for my tickets the other day due to the time we were traveling and the corona virus. They said they are not giving refunds only letting you cancel to reschedule for free. No bonus of any kind was offered. And the person who answered the phone was rude. So I’m not sure where this information came from but it didn’t happen for us.

  43. Say what you want about spirit airlines but they are great to deal with gave me a full refund on tickets very easy!

  44. From the very 1st paragraph this article had the look and feel of a corporate advertisement. And sure enough it appears to be at American Airlines publication. American Airlines has cash-flow problems. They will be trying to keep the money they have and giving incentives to keep it. The overall risk though is that they will go bankrupt and you will lose everything.

  45. in these worrying times, you can be sure that american airlines have your best interests at heart. whoops, sorry about the error- please do replace “your” with “their”

  46. 20% is the airline is behind CHEAP. Everyone should join hands, take the cash, and say EFF U American. Give me double, make it two years, or give me my CASH. Stop being soft on these greedy people

  47. My wife and I have AA tickets from Denver to Kauai on April 9th. At this time the flight has not been cancelled. We have no intention of going. If the flight does get cancelled are we entitled to a full refund? If it doesn’t get cancelled am I to understand that we can take a credit but have to use it within in one year of our original purchase which was 1/19/20. Can someone please help me understand my options?

  48. Going for the cash is a non-brainer. Should AA (or any other carrier) decide it’s in their interest to enter bankruptcy reorganization as this crisis drags on, your credit makes you a creditor who’ll need to get in line with all other creditors and are likely to see the value of that credit reduced or eliminated altogether.

  49. What about flights booked with miles…. if I cancel flight on April 7th… do miles get redeposited in my account?

  50. In August 2019, we booked a flight from New York to Rome for June 2020. And because of the corona virus we are wanting to postpone the trip until next June, so we don’t fall into any of the cancel/rebook categories AA has right now. After reading all the comments I think we need to wait and see if AA cancels the flight so we can get a refund and not be bound to use them with a voucher.

  51. I’m trying to get a refund for my flight I booked with AA (due to take off – or not – tomorrow). However, I find information from AA absolutely NOT clear. I’m unable to fly (Europe-US) due to current US customs restrictions (never mind the rest), I don’t know what happens if I do NOT cancel, and the flight is not cancelled (unlikely, but not impossible). Does it mean I’m marked as just a no-show, i.e. no refund, etc? And, while people mention that you ARE presented with an option of a refund, when you decline (twice?!) the offer for re-booking and 120% credit, I’m not at all sure this option will become available, and by that time I will have “cancelled”, thus “agreed” to whatever options are available.
    Ultimately, if AA don’t refund my ticket, I’ll be trying hard to get it refunded via my bank (chargeback?), but I’m pretty sure they won’t jump to my help until I’ve exhausted my options of “issue resolution” with AA first. Which, given the current situation, could easily be a good few months.
    No, I don’t care for (extremely hard) situation airlines have found themselves in. What goes round comes round.

  52. We booked 2 rtn tkts with American Airlines DUB – PHL due to go Fri 3rd April & american cancelled so i applied for refund. They refunded 1 tkt but sent me an email saying my tkt is non refundable and can be changed but must be used by expiry date of original tkt which is mid May??? How can 2 tkts on the same Locator number 1 be refunded and the other not & i have 6 wks left to use tkt or lose it. Is someone at American having a laugh??? Naturally i have contacted Customer services to get it sorted.

  53. @Michael McMahon Did you call the airline to cancel or did you go through the online cancellation process?

  54. I had to cancel a flight with American recently. I was on the phone trying to understand the 20% bonus voucher, the associate I spoke with told me that it would be added on the backend. So I mad the stupid decision to trust her and agreed to a 100% voucher on prefunds.aa.com, I trusted that I would get the 20% since she stated to me multiple times I would. When I received my voucher it was for 100% of the tickets original cost. I messaged the customer relations, and the response I got back was, that they were sorry for the misunderstanding, and that since the voucher was already given there is no additional 20% voucher that they would send. Do not trust American in giving a 20% voucher bonus.

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