New airline refund rules could ease travel hassles for American passengers

Just weeks before the holiday travel season, new airline refund rules went into effect across the country. They can mean big changes for when, and how, Americans get paid back for things like flight delays or mishandled baggage. They would also put an end to some haggling, communication breakdowns and frustration for passengers. Geoff Bennett discussed more with Brian Kelly of The Points Guy.
Geoff Bennett:
Just weeks before the holiday travel season kicks into gear, new airline refund rules have gone into effect across the country. They can mean big changes for when and how tens of millions of Americans get paid back for things like flight delays or mishandled baggage.
They also put an end to some haggling, communication breakdowns, and all-around frustration for passengers.
To help walk us through them, we’re joined now by Brian Kelly, founder of The Points Guy. That’s a popular travel Web site.
Thanks for being with us.
Brian Kelly, Founder, The Points Guy:
Thanks for having me.
Geoff Bennett:
So, Brian, these rules were first announced by the Biden administration back in April, because, previously, airlines set their own policies when it came to delayed flights or flight cancellations.
Help us understand the changes.
Brian Kelly:
Yes, these changes are great for consumers because they give clarity on exactly when you can get a full refund.
Now, what’s been happening is airlines have been giving vouchers to consumers, instead of refunds. Now the regulation states that consumers are owed a refund to their original form of payment if a flight is delayed, whether three hours or more domestically or six hours or more internationally, or if the flight is canceled for any reason by the carrier.
So, cash is king. So, this is definitely a win for consumers because getting the refund is much better than a voucher that will eventually expire.
Geoff Bennett:
And these are automatic refunds?
Brian Kelly:
These are supposed to be automatic if you choose not to be reaccommodated.
Now, most airlines in their Web site will give you the option to take the next flight or different routes. If you choose not to do that and say, hey, look, I’m just going to nix this trip, you should automatically get it within seven business days. If you don’t see that, then it’s time to request it from the airline. And if they don’t provide it, you can file a DOT complaint, but hopefully automatic.
Geoff Bennett:
And what are the rules around mishandled baggage and situations like where you pay for Wi-Fi on the plane and it doesn’t work?
Brian Kelly:
Yes, the new rules that were put into place were meant to protect consumers whenever they paid for extras, which are becoming more and more common, like seat upgrades or checked baggage.
If that checked baggage does not show up within 12 hours domestically, you get that baggage fee refunded. In the past, it was up to the airlines to decide if they wanted to do that. Now, this is in addition to compensation if the airline loses your bag. Every airline has different policies on what they will reimburse for missing luggage.
And I will also note, always check with your credit card company too, because many of them will reimburse you for those missing bags. But if the Wi-Fi didn’t work, or if the airline changes your flight and adds extra connections, which happens a lot, you don’t have to accept them. If you booked a nonstop flight and they try to change it, you are owed a full refund, which is great news.
Geoff Bennett:
How have the airlines responded to these new rules?
Brian Kelly:
Well, there was a lot of grumbling. I thought the airlines might try to protest the new rules, because there’s a lot of — that has to go into this. But, so far, we haven’t seen that.
My professional opinion is that the airlines are waiting to see what happens on Election Day, because, if there is a change in administration, I expect there will be some heavy lobbying to either water down or get rid of these new regulations altogether, which is in the purview of whoever runs the DOT come next year.
Geoff Bennett:
And, Brian, while we have you here, I want to ask you about something else, because last month the Transportation Department opened an investigation into airline loyalty programs, looking into problems with devaluing earned points and some hidden fees.
Why are airlines making it harder to accrue and use loyalty points?
Brian Kelly:
Well, interestingly, airlines are actually making it easier to earn points. There’s more credit card offers than ever before. The issue comes with redeeming points.
Specifically, the big four U.S. airlines have continued to increase the amount of miles needed, where it can be very confusing for consumers. What are these miles actually worth? So the DOT is currently in an investigation and fact-finding mission, and they potentially could come out with new regulations that would mandate the airlines to post minimum values that the average consumer could expect to get from their frequent flier mile programs and also make them give notice for any big changes to the programs and not just be able to change them at will at any given time, which is how it is today.
Geoff Bennett:
Brian Kelly, The Points Guy himself, founder of the popular travel Web site, thanks for being with us.
Brian Kelly:
Thanks for having me.