Finally, the Department of Transport has taken steps to amend the often woeful rules and regulations around airline refund rights for passengers. Similar in spirit to Europe’s EU261, the new DOT rule lays out in crystal clear detail when exactly they have to refund you. In addition, the new DOT rule also lays out the exact refund methods and timeliness. Fortunately, the news is excellent and is a step in the right direction for travelers in the US.
Your Entitlement To A Refund for Air Travel
The DOT clearly states a passenger’s entitlement to a refund in three situations:
- Canceled or significantly changed flights
- Significantly Delayed Baggage Return
- Failure to Provide Extra Services
Canceled, Significantly Changed or Delayed flights
You are entitled to a refund if your flight is canceled or significantly changed – and you do not want to accept the travel credits or alternative transportation offered by the airline. Unsurprisingly, the million-dollar question becomes, “What is a significant change?”
Fortunately, for the first time, this illusive idea is defined by the DOT as follows:
- Domestic Flight departure or arrival that is in excess of 3 hours late
- International Flight departure or arrival that is in excess of 6 hours late
- An increase in the number of connections to those originally booked.
- Connections at a different airport than what was originally booked.
- A forcible change in the departure or arrival airport.
- Airline downgrades to a lower class of service.
- For those with a disability: Change to a flight on different, less accessible aircraft hardware.
Significantly Delayed Baggage Return
While everybody hates that sinking feeling as you see the last bag taken off the belt and realize that yours is a new show, you may have some piece of mind that you will be eligible for a refund. However, you will not be eligible for a refund on your ticket price but only on your checked bag fee.
Refunds are feasible under the following conditions:
- Bags that are delayed by more than 12 hours for domestic flights.
- Bags that are delayed by more than 15-30 hours for international flights, depending on the length of the flight.
Failure to Provide Extra Services
If the airline fails to provide an extra service you have paid for, you will also be eligible for a refund for the cost of the service you have already paid.
These can include items such as:
- Prepaid Wi-Fi.
- Seat Selection.
- In-Flight Entertainment.
DOT Rules for Airline Refunds
Often, the devil is in the details when it comes to situations like refunds. Companies are known to adhere to the letter of the law but not its spirit. Many companies try to make it as difficult as possible to receive what is rightly yours in the hope that you will give up and they can keep your cash.
In an act of foresight, the DOT anticipated this and, in its rule, set four criteria that airlines must meet when processing refunds.
Automatic
Passengers should not have to explicitly demand refunds or jump through hoops to get their money. The airline should issue refunds automatically when they are due.
Prompt
The airline is quick to take your money and should be quick to return it. There is no need to wonder if the refund will hit your account in time for your kids to receive their inheritance. Refunds should meet the following thresholds:
- Credit Card purchases: refunds must be processed within seven business days.
- Other payment methods: refunds must be processed up to 20 calendar days.
Payment Method
For many passengers seeking refunds in these situations, you’ll hear “would you like a travel voucher or miles instead of a refund?” from an airline in response to a refund request. Fortunately, the DOT is staying well ahead of that game.
The new refund rights instruct airlines that refunds can only be in any of the following two ways:
- Cash (in USD)
- The original form of payment:
- if you paid with a credit card, it is a refund;
- if you paid with miles, you get your miles back, and so forth.
The DOT is very clear on this point. The new rule prohibits airlines from offering vouchers, miles, travel credits, or other forms of payment unless the passenger actively chooses to accept them. The airline can offer you miles or cash – but you have the right to choose which one to take.
Payment Amount
The DOT specifies that your refund rights are for the total amount you paid for your ticket minus the value of any portion of your journey used. So, if you are seeking a refund for a roundtrip fare after completing the first outbound leg, you will receive a partial refund for the value of the return leg.
Another critical point is that the airline must refund all taxes and fees and impose carrier charges, regardless of whether the airline can claim these back from the appropriate authorities. You get all the money you paid back!
Final Thoughts
When it comes to consumer rights and airlines Europe has been leading the charge, and EU261 has set the global standard for refunds and compensations. So, it is welcome news to see the US DOT address the lack of consumer rights in air travel in North America, and make it easier for travelers to get their money back when an airline fails them.
For too long, airlines have treated travelers with disdain for inconveniences – especially when they have failed to deliver what they sold. We hope this new rule about refund rights is a step in the right direction, to hold airlines accountable for service provisions.
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