Airlines must now give cash refunds, better disclose baggage fees

Airline cash refunds overview: 

• Who: The Biden Administration announced new U.S. Department of Transportation airline rules related to automatic refunds for eligible canceled or delayed flights.
• Why: The rules aim to save consumers time and effort while creating transparency.
• Where: The rules were announced from Washington, D.C.

The Biden Administration announced new U.S. Department of Transportation (DOT) rules related to automatic refunds for eligible canceled or delayed flights and transparency on baggage fees.

The airlines cash refunds rule requires prompt payments without requiring passengers to specifically request them to the original method of payment for the full amount paid minus the costs of any travel that already occurred, according to a White House fact sheet.

Airlines must make the refund payments within seven business days for credit card purchases and 20 calendar days for other payment methods. The payments must be in the original payment method and not be substituted with airline credits or vouchers unless a passenger explicitly chooses the alternative refund method, the fact sheet states.

The U.S. flight cancellation rate was 1.2% in 2023, a 10-year low in a year with a record amount of air travel, according to the White House fact sheet.

“Without this rule, consumers have to navigate a patchwork of cumbersome processes to request and receive a refund — searching through airline websites to figure out how to make the request, filling out extra ‘digital paperwork’ or at times waiting for hours on the phone,” the White House fact sheet says. “Passengers would also receive a travel credit or voucher by default from many airlines instead of getting their money back.”

Airlines must clearly disclose baggage fees, flight change, cancellation costs 

The rule also requires airlines to clearly state baggage and flight change or cancellation costs clearly at the beginning of the process, according to the White House fact sheet.

Airlines must disclose baggage fee information the first time the fare and schedule information is provided. Weight and dimension information must be included in the disclosure.

“The final rule puts an end to the bait-and-switch tactics some airlines use to disguise the true cost of discounted flights,” the White House fact sheet says. “It prohibits airlines from advertising a promotional discount off a low base fare that does not include all mandatory carrier-imposed fees.”

The DOT announced proposed rules related to increased access to airlines cash refunds in August 2022.

What do you think of the new airlines cash refund rules? Let us know in the comments.

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