Airlines are going great lengths to try and deny people cash refunds for cancelled flights. They’re doing quite a good job with it, because most consumers seem to believe they aren’t entitled to cash refunds, which simply isn’t true.
Let’s take a look at what you need to know about this, and what you can do if an airline is trying to deny you a cash refund.
Why airlines are trying to deny cash refunds
Airlines are (understandably) in a really tough spot at the moment. They’re facing unprecedented government restrictions and reductions in demand, and there are questions around whether most airlines would be able to survive without government aid.
Therefore when airlines cancel flights, most airlines are doing what they can to convince people to accept a voucher with the airline, rather than getting a cash refund. They essentially want consumers to give them an interest free loan, given their huge liquidity issues.
On the one hand I can’t blame them for trying, though on the other hand they’re downright violating government restrictions and lying to consumers, and plenty of consumers are also in a tough financial spot as a result of this global pandemic.
The US DOT requires airlines to offer refunds for cancelations
While government restrictions will vary by country, let us talk specifically about the US, since there are hundreds of different policies out there, and I don’t want to create confusion. Policies are sometimes different in other countries.
The US Department of Transportation requires airlines to give passengers the option of a refund in the event a flight is cancelled. Here’s a quote directly from the DOT website:
What happens when my flight is cancelled?
- If your flight is cancelled, most airlines will rebook you for free on their next flight to your destination as long as the flight has available seats.
- If your flight is cancelled and you choose to cancel your trip as a result, you are entitled to a refund for the unused transportation – even for non-refundable tickets. You are also entitled to a refund for any bag fee that you paid, and any extras you may have purchased, such as a seat assignment.
- If the airline offers you a voucher for future travel instead of a refund, you should ask the airline about any restrictions that may apply, such as blackout and expiration dates, advanced booking requirements, and limits on number of seats.
As you can see, this is pretty cut and dry. If your flight is cancelled, you are entitled to a refund for any unused portion of the trip. That’s a real refund (to your original form of payment), and not an airline voucher.
The DOT makes no distinction here based on whether or not an airline is at fault for the cancelation — it doesn’t matter if it’s due to weather, a mechanical issue, a schedule change, or a government regulation.
What do airline contracts of carriage say?
The DOT regulations reign supreme, but what do airline contracts of carriage say? Well, they mostly spell out very similar policies.
American’s policy makes it pretty clear that a refund should be allowed:
“We will refund a non-refundable ticket (or the value of the unused segment of your trip) to the original form of payment if we cancel your flight.”
Delta’s policy makes it pretty clear that a refund should be allowed:
“If there is a flight cancellation, diversion, delay of greater than 90 minutes, or that will cause a passenger to miss connections, Delta will (at passenger’s request) cancel the remaining ticket and refund the unused portion of the ticket and unused ancillary fees in the original form of payment in accordance with Rule 22.”
Southwest’s policy makes it pretty clear that a refund should be allowed:
“Delays or Involuntary Cancellations. If a Passenger’s scheduled transportation is canceled, terminated, or delayed before the Passenger has reached his/her final destination as a result of a flight cancellation, Carrier-caused missed connection, flight delay, or omission of a scheduled stop, Carrier will either transport the Passenger at no additional charge on another of Carrier’s flights, refund the fare for the unused transportation in accordance with the form of payment utilized for the Ticket, or provide a credit for such amount toward the purchase of future travel.”
United seemingly tries to wiggle out of this by being vague with their force majeure event clause, but that’s not supported by the DOT:
“Force Majeure Event – In the event of a Force Majeure Event, UA without notice, may cancel, terminate, divert, postpone, or delay any flight, right of carriage or reservations (whether or not confirmed) and determine if any departure or landing should be made, without any liability on the part of UA. UA may re-accommodate Passengers on another available UA flight or on another carrier or combination of carriers, or via ground transportation, or may refund any unused portions of the Ticket in the form of a travel certificate.”
What recourse do you have if airlines refuse refunds?
If you want a cash refund but an airline refuses to offer you one, what recourse do you have? Other than citing the clear DOT regulations, you have two routes you can take.
Dispute the charge on your credit card
Simply put, airlines are violating federal laws by refusing a refund if your flight is cancelled, and for the most part they’re also violating their own contracts of carriage.
If you’ve tried every method for getting a refund but are denied, a credit card dispute might be the next logical step. I hate to even recommend that, because airlines are overwhelmed enough, but that’s kind of the only option.
File a complaint with the DOT
This is unlikely to get you an immediate resolution, but if you are being denied a refund even though you’re legally entitled to one, I recommend filing a complaint with the US Department of Transportation.
These count against the airlines, and long term airlines might face fines for violating DOT regulations.
Tip: be careful not to accept a voucher
Here’s one important mistake you don’t want to make. Airlines are doing everything they can to encourage people to accept vouchers rather than cash refunds. Be careful not to accept this, because once you do, you’re agreeing to that.
If you’re not happy with what you’re being offered, don’t accept it.
Some airlines are even getting crafty in this sense:
- Frontier Airlines is offering people a $50 voucher if they cancel their flight by March 23 and accept a future flight credit
- My guess is that they’re about to load huge route cancelations, and they want people to agree to this before doing so
- Once people agree to accept a voucher, they don’t have to refund those passengers in cash when their flights are eventually cancelled
But in some cases this could be worthwhile, depending on your travel patterns. For example, anecdotally American is offering a 20% bonus when you select a travel voucher rather than a cash refund for your flight.
Don’t agree to anything until you know the rules and what you’re getting yourself into.
What about if your flight’s schedule is changed?
While the US government states that airlines have to refund you if your flight is cancelled, note that the same provision doesn’t apply in the event of a schedule change.
That’s to say that if the airline keeps the same flight number and just moves the flight by several hours, you’re not legally entitled to a refund — at this point it would come down to the airline contract of carriage.
Everything about this section is specific to situations where your flight is outright cancelled.
Don’t be mad at frontline airline employees
This is really important. Airline employees are in an awful situation right now — they’re probably scared about their job security, they’re overworked, and I imagine they’re dealing with a lot of frustrated passengers.
No matter what, be kind to airline employees. They’re not the ones making these policies, so while you can be firm and make your point, please don’t let out frustration on frontline airline employees.
At least in the US, when an airline cancels your flight you’re entitled to a cash refund on account of DOT regulations. Airlines seem to be doing everything in their power not to honor this. Make sure you know your rights, and act accordingly.
If you’ve tried to get a refund from an airline in the past few days, what has your experience been like?