Travel

Last week, the federal Department of Transportation proposed revised regulations to update airline refund rules. (See news story.)

In particular, much of the news coverage talked about airlines having to provide vouchers for future travel to passengers. Well, if you paid for your ticket by credit card or with cash, do you really want a voucher for future travel rather than a full refund? And whose choice is it for cash back or future credit?

It all depends on whom is doing the canceling. The proposed regulations add a new rule about what happens when the passenger cancels a reservation on a nonrefundable ticket because of serious communicable illness (and not the common cold).

*MOUSE PRINT:

A ticketed passenger would be entitled to a non-expiring travel voucher but not a refund if he or she is advised:

…not to travel by air because the consumer has or may have contracted a serious communicable disease as defined in 14 CFR 260.2, and the consumer’s condition is such that traveling on a commercial flight would pose a direct threat to the health of others.

Proof of a public health emergency, government restriction on travel, or a letter from a medical professional documenting the serious medical condition that could be contagious to others when traveling may be required by the airline.

And here’s a little wrinkle that has not been publicized: The airline can also deduct a service fee for processing the voucher if the amount of the fee was disclosed at the time the ticket was purchased.

Now what happens if it is the airline that cancels or substantially changes/delays a flight? The proposed regulation says that a delay of three hours or more or an outright cancellation qualifies you for a “cash” or credit card refund.

*MOUSE PRINT:

(5) … [provide] prompt refunds, within 7 days of a refund request as required by 14 CFR 374.3 for credit card purchases, and within 20 days after receiving a refund request for cash or check or other forms of purchases. Carriers may choose to provide the refunds in the original form of payment …, or in another form of payment that is cash equivalent as defined in 14 CFR 260.2. Carriers may offer travel credits, vouchers, or other compensation in lieu of refunds, but carriers first must inform consumers that they are entitled to a refund. Carriers must clearly disclose any material restrictions, conditions, or limitations on these compensations they offer, so consumers can make informed choices about the refund or other compensation that would best suit their needs.

As noted above, the airline can try to offer you a voucher for future travel in these circumstances, but they have to tell you that you are entitled to money back instead. You don’t have to accept a voucher. You can demand a refund.

The proposed rules are subject to public hearings and comment and won’t go into effect for some time.