Why you should think twice before accepting an airline voucher — even with a bonus

Mar 23, 2020

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The coronavirus pandemic has already taken a massive toll on the travel industry. Airlines are struggling to stay afloat, some have already ceased operations and others are making major schedule cuts to ensure short-term survival.

To maintain cash flow, they’re doing all that they can to restrict refunds for canceled flights. Many are even offering lucrative promotions for keeping a travel credit instead of requesting a cash refund. But even with these bonus offers, it still pays to ask for a refund.

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Airline credit bonuses

We’ve seen some airlines get creative about handling canceled flights. Of the U.S. airlines, Frontier was in the news for offering a $50 voucher per person for canceling any booking for travel between March 22 and June 17. That’s in addition to the future flight credit you’d get from the original booking. This promotion is still valid until Monday, March 23 at 11:59 p.m. Mountain Time.

(Photo courtesy of Denver airport)
(Photo courtesy of Denver airport)

Turkish Airlines also announced an interesting offer for those who reschedule existing flights, as opposed to canceling and requesting a refund. According to the airline’s chairman as quoted by Turkish news site Daily Sabah, you’ll get a 15% bonus to the value of your ticket if you decide to postpone your flight, as opposed to refunding it. You’ll also have the option of receiving 1,000 bonus Miles and Smiles for every 10 Euros ($10.75) of value in your ticket if you decide to reschedule your flight. The details of this offer hasn’t been shared on the airline’s website, but we’ll update the post when it does.

Similarly, Aer Lingus is offering a 10% bonus if you accept a travel voucher instead of a refund.

Then there are other carriers that have taken the opposite approach. Instead of incentivizing people to postpone flights, they’ve just made it much harder for passengers to get refunds. United’s new schedule change policy — requiring you to wait a full year for a refund — is a perfect example. Swiss has also removed most references to getting a refund for canceled flights from its website.

As the coronavirus outbreak continues, we’ll surely see more airlines incentivize taking a credit, and others will try as hard as possible to restrict refunds.

Why shouldn’t you accept travel credit for canceled flights?

You shouldn’t necessarily accept a travel voucher. By doing so, you’re basically giving the carrier a binding interest-free loan.

Say you take Frontier’s offer and voluntarily postpone your flight for a voucher and $50 bonus. You’re locked into that decision no matter what happens. If your original flight ends up getting canceled, you are no longer eligible for a refund since you’ve already accepted a voucher.

Plus, vouchers have a long list of terms and conditions. Most can only be used and flown by the originally ticketed passenger. Furthermore, you’ll find lots of vouchers with strict expiration dates (in some cases, like Spirit, just 90 days). Lastly, there are some airlines that will only allow you to use a voucher once — it’s use it or lose the rest of the value.

Aside from all the confusing terms, some airlines may not make it out alive after the coronavirus outbreak. If you’ve got a voucher for a defunct carrier, it’s worth nada.

Air Berlin ceased flying in 2017. (Photo by RALF HIRSCHBERGER/AFP/Getty Images)

Before you agree to accepting a voucher, make sure you read and understand all the terms of the offer. In most cases, it makes sense to ask for a refund — if you’re eligible.

Strategies for getting a full refund

Now that you’ve made the prudent decision to ask for a refund, how do you know if you’re eligible?

To start, your flight needs to have been canceled or significantly delayed by the operating airline. Each carrier has strict guidelines for what delays qualify for a refund, which you can find in the contract of carriage. Additionally, if your flight time has changed significantly (what’s referred to in the industry as a schedule change), you’ll also be eligible for a cash refund.

Until your flight is canceled, delayed or significantly changed, (almost) no airline is going to refund you, so if you’re thinking about canceling your flight, the best thing to do is to wait. Patience, especially when it’s hard to get in contact with airlines, isn’t easy, but it’ll pay off.

If by the day of your flight, it’s not canceled by the airline (and therefore eligible for a full refund), you should then request a travel credit. But you should always wait because you never know if the airline will add a waiver or the flight gets significantly delayed.

Bottom line

The coronavirus outbreak is wreaking havoc on the travel industry. As the carriers scramble to stay in business, you’ll find more and more of them offering travel vouchers in exchange for canceled flights. This way the airline can keep your money and just reschedule your flight for later on.

But if your flight is canceled by the airline — no matter the cause — you’re eligible for a full refund. There’s almost no reason to agree to a restrictive travel voucher, even with a bonus, if you’re presented with the opportunity to get your money back.

The key, though, is to wait until the airline cancels or significantly delays your flight. Otherwise, your only option may be a travel voucher, which you should never accept because there’s a good chance your upcoming flight will be canceled.

Feature photo by bunhill / Getty Images

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