United Airlines Improves No Change Fee Policy

Filed Under: United

One positive development we’ve seen in the airline industry as a result of the coronavirus pandemic is the elimination of change fees on most kinds of tickets. It’s not just that airlines temporarily waived change fees, but the major carriers have “permanently” eliminated change fees (whatever that means, because nothing in life is permanent).

United Airlines was the first major US airline to announce it would eliminate change fees permanently during the pandemic, but the carrier’s policy went from awesome to not very competitive within hours. That has finally changed.

United now issues residual vouchers for changes

The way the no change fee policy works is that if you book an eligible ticket and no longer want to travel, you can cancel your itinerary and then apply the value of the ticket towards future travel. To be clear, tickets aren’t fully refundable to the original form of payment, but rather you get a voucher towards a future ticket.

But there has been one major catch with United’s policy up until recently — if you rebooked your itinerary and your new flight cost less than the original one, you lost the fare difference. This was in contrast to the policies at American and Delta, which issue residual vouchers when you change tickets.

Just to give an example, say you booked a $500 ticket, you canceled it, and then you wanted to use your credit towards a $200 flight:

  • At United you could use that credit towards the flight, but you’d “lose” $300 in value
  • At American and Delta you could use that credit towards the flight, and then you’d be issued an additional $300 voucher to use towards future travel

Well, United Airlines has finally updated its policy in this regard — United Airlines will now issue a voucher if the itinerary you rebook on costs less than your original itinerary. There are some things to note:

  • This feature is only available when booking directly with United, and it’s initially only available through United’s app and by phone
  • The voucher is valid for a year from the original date of issue, and is non-transferable

This is awesome news. United was leading the way when it first announced plans to eliminate change fees, and ultimately consumers were still coming out ahead compared to the old policy, even when losing residual value. However, with other airlines having introduced a more generous policy, United was quickly pretty uncompetitive.

You now maintain residual value on United vouchers when changing flights

An interesting travel agent twist

Brett Snyder makes an interesting observation regarding United’s new change fee policy. You’re only issued a residual voucher if you book direct through United, and not if you book through a travel agent (travel agents can change tickets without a fee, but can’t issue the residual vouchers).

What happens if you book through a travel agent? Well, all non-basic United tickets booked through travel agents are refundable for a fee. The fee ranges from $100 to $400, depending on the fare type:

This is potentially major, and for some people may be an incentive to book through a travel agent. To be clear, we’re talking about tickets being legitimately refundable, in the sense that this will be money that’s refunded to your credit card, rather than a voucher towards a future ticket.

Why is this useful? For example, say you’re a business traveler booking a $5,000 business class ticket that isn’t refundable for cash. I’m sure many people would rather pay $400 to get cash back in their pocket, rather than a United voucher towards a future flight.

This is a very interesting angle, as it makes virtually all United fares refundable to the original form of payment for a fee, rather than just changeable for free.

Now, I should mention that I have no firsthand experience with the implementation of this yet. In other words, I’m not 100% sure if this applies to online travel agencies in the same way, and if so, what the process of getting a refund would be like.

Most United tickets booked through travel agents are refundable for a fee

Bottom line

United Airlines has improved its no change fee policy. If you cancel a ticket and rebook on a cheaper flight, you’ll now be issued a voucher for the fare difference, which wasn’t previously the case. This is a great development, and ultimately was necessary given that American and Delta had this generous policy all along.

What I find equally interesting is that tickets booked through travel agents are eligible for cash refunds for a fee. For those who are willing to pay to get cash back rather than a voucher towards future travel, this could prove to be a reason to book through a travel agent.

What do you make of United’s adjustments to the no change fee policy?

  1. I wonder how businesses are going to expense this out. Say I buy a ticket for one of my employees and pay $400 to have him/her fly to X city. They cannot for whatever reason and we cancel the ticket and get the voucher(s). Previously with change fees we’d just expense that to the travel budget. Since we’d essentially get the value back would the voucher be issued in the name of the passenger? In all my years of flying I have never had to initiate a change flight and never experienced this.

  2. Surprising, but I have verified this is at least a temporary policy. Travel agencies can refund wholly unused USA point of origin tickets for a $100.00 penalty using a waiver through 31DEC21. Who knows whether it sticks.

    Note that travel agents can still make changes for free for equal/higher priced travel (as before)–there is just no policy to preserve any residual value if new fare is lower.

    @Craig, this does not really impact corporate travel budgets. Historically, companies simply expensed the change fee when the ticket was reissued. Now there is no change fee to expense, so I suppose most will just expense the ticket cost as it’s used for travel.

    In the case of a refund, the penalty gets expensed and the remainder is returned to the original FOP.

  3. About time! UA’s flight credits are a pain to use unless the flights were more expensive than the credit!

  4. you’re a business traveler booking a $5,000 business class ticket that isn’t refundable for cash.

    Why would this be an issue? Most work tickets are not paid by the traveler but by their corporate overlord.

  5. Could Lucky or a United expert put this in terms of FFC and ETC? If you use FFC for a cheaper flight, you get the residual as ETC? And if you use ETC for less than the full value it just keeps the residual on it?

  6. Think back when you had to cancel your itinerary….Again, when the customer ‘cancels’, you were slapped with a ridiculous extra fee. Pick and choose your vice when booking, one outweighs the other.

  7. Are award flights able to be redeposited free of charge if I cancel my trip? I’m assuming the tax and fees associated with the trip won’t be refundable.

  8. Does this apply to credits from past cancellations as well? I have a credit from a flight I cancelled in January that I have waited to use because for every flight I would use it on, I would lose residual credit. If it doesn’t apply I may just apply this to an even more expensive flight to cancel right away and keep the credit.

  9. Award tickets will be redeposited in your frequent flier account for no charge unless within 30 days of the flight in which case the fee is $100.00

  10. I’m so glad you put “permanently remove change fees” in quotes because it is absolutely ridiculous to believe that they won’t bring them right back in a year or two when travel returns to normal and it gets quietly added back in the terms and conditions. In no way do I believe flight changes will be free in ten years.

  11. “This feature is only available when booking directly with United, and it’s initially only available through United’s app and by phone”

    Does this mean if you booked online, then you need to go to app or phone to cancel and get the credit. Not clear why this won’t work on the online version?

  12. Does this mean if there is a fate drop, you can cancel and rebook and get a vouche for the difference?

  13. Now it all makes sense. I called to rebook a flight two days ago with FTC and the agent said the residual value would go back to my card

  14. Do we have more info on this? My travel agent called her rep today to refund a $2,000 nonrefundable ticket and the rep said that the article establishing the “new” policy was a hoax. She was told I’ll get a voucher for the unused portion of the ticket after I book a flight with it that can be used through the travel agent. Also, FWIW, I’ve been 1k for 20 years and always book through an agent. I’ve always gotten vouchers for the unused portion of a partially used ticket. It seems nothing has changed.

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