Airlines Must Refund Cash, Not Vouchers Thanks to New Federal Rules

The Transportation Department is hoping to make canceled flights less of a headache

A departure and arrivals board at an airport showing a bunch of canceled flights
Goodbye, travel credits.
Getty Images

What are you owed when an airline cancels your flight? In 2022, the U.S. Department of Transportation sought to help travelers navigate the issue by launching the Aviation Consumer Protection Dashboard, which provided “easy access to information about services that U.S. airlines provide to mitigate passenger inconveniences when the cause of a cancellation or delay was due to circumstances within the airline’s control.” Now, it’s taking things a step further.

Per a report from CNN, new federal rules say that travelers must receive cash refunds for flight cancellations and delays rather than vouchers or travel credits.

“From now on when your flight is canceled for any reason, you are entitled to an automatic cash refund and it has to be prompt,” Transportation Secretary Pete Buttigieg told CNN. “If you get delayed significantly, that means three hours domestically, six hours internationally, or if there’s another significant change to your itinerary — like maybe you were going to go into one airport, they actually changed the airport on you or something like that — you’re going to get your money back.”

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The new rules will also ensure that passengers are refunded for baggage fees if their bags arrive more than 12 hours late, as well as for other purchased services —wifi and seat upgrades among them — should the carrier not deliver. Per Buttigieg, airlines with be liable for refunding fees automatically and promptly (within seven days for a credit card refund and 20 days for other forms of payment). No more “headaches or haggling,” he added in a statement.

These new rules follow the deluge of travel credits that were issued during the pandemic, many of which expired before travelers were able to use them.

Further, the rules are yet another effort to get airlines to be more transparent with passengers regarding change and baggage fees — a longtime initiative of the Biden administration. According to Buttigieg, more transparency from airlines, which would make comparing prices easier for travelers, could equate to millions of dollars worth of savings for Americans every year.


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