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American may soon offer gift cards and miles for overbooked flights

Nov. 03, 2020
3 min read
American may soon offer gift cards and miles for overbooked flights
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Back when oversold flights were a "thing," flexible flyers knew to ask about the possibility of getting bumped.

When a flight approaches capacity, airlines have two choices: solicit volunteers to take a different flight or pay involuntary denied boarding compensation, which can get as high as $1,350 under Federal Aviation Administration regulations.

Carriers have long offered compensation to get passengers to consider voluntarily switching flights. After all, it pays to offer someone $500 to take a later flight — as opposed to involuntarily bumping the last passenger for $1,350.

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In recent years leading up to the pandemic, American Airlines has gotten even savvier about oversold flights. In May 2019, the Fort Worth-based carrier started soliciting volunteers in the mobile app. And then six months later, AA began paying volunteers different amounts based on in-app bids, all in an effort to reduce the total compensation distributed.

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Either way, if you were bumped from an American flight, you were given either a travel voucher for use on a future AA ticket or – in some cases – cash for being denied boarding involuntarily.

But now, the carrier is paving the way to offer additional compensation options for voluntary denied boardings. Per an update to the Conditions of Carriage, American will now offer “compensation… in the form to be determined by American.” Previously, this legally binding document referenced only "travel credit."

When asked about the change in wording, a spokesperson offered:

This change provides American the opportunity to offer different forms of compensation to our passengers who volunteer to take a different flight when their scheduled flight is full.

The spokesperson said both gift cards and AAdvantange award miles are under consideration as forms of compensation.

Should AA decide to move forward with these new options, perhaps it can convince more flyers to volunteer. Depending on the mileage amount, it could definitely make sense to choose AAdvantage miles in lieu of travel credit. After all, there are still some incredible sweet spots on the AA award chart.

Unfortunately, AA didn't have a timeline or further details to share about the potential new compensation methods. It's possible that AA will also roll out a more automated volunteer process as well. Right now, processing volunteers requires manual intervention by a gate agent.

Of the Big 3, American's compensation options are the weakest. Both Delta and United offer a more comprehensive selection of choices. Delta volunteers receive a gift card that can be redeemed at one of 10 retailers: Delta, American Express, Amazon, Best Buy, Bloomingdales, Macy’s, Marriott, Nordstrom’s, Royal Caribbean and Target. These gift cards are fully transferrable and combinable.

Related: Tips and tricks for how to handle oversold flights

United, on the other hand, offers travel vouchers or MileagePlus miles when soliciting volunteers.

In the meantime, American likely doesn't have much trouble getting people to switch off of full flights. With the pandemic raging on and people looking to maximize their personal space, American will notify travelers should flights approach capacity. If your flight is eligible, you can make a fee-free change to an emptier flight.

That way, the traveler gets a shot at some extra space — and American likely doesn't need to offer any compensation.

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  • For a limited time, earn 80,000 bonus ThankYou® Points after you spend $4,000 in purchases within the first 3 months of account opening
  • Earn 3 Points per $1 spent at Restaurants and Supermarkets
  • Earn 3 Points per $1 spent at Gas Stations, Air Travel and Hotels
  • Earn 1 Point per $1 spent on all other purchases
  • Annual Hotel Savings Benefit
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TPG Editor‘s Rating
Card Rating is based on the opinion of TPG‘s editors and is not influenced by the card issuer.
4 / 5
Go to review

Rewards Rate

3XEarn 3 Points per $1 spent at Restaurants and Supermarkets
3XEarn 3 Points per $1 spent at Gas Stations, Air Travel and Hotels
1XEarn 1 Point per $1 spent on all other purchases
  • Intro Offer
    For a limited time, earn 80,000 bonus ThankYou® Points after you spend $4,000 in purchases within the first 3 months of account opening

    Earn 80,000 ThankYou® points
    60,000 points
  • Annual Fee

    $95
  • Recommended Credit
    Credit ranges are a variation of FICO© Score 8, one of many types of credit scores lenders may use when considering your credit card application.

    670-850
    Excellent, Good

Why We Chose It

The Citi Premier’s 3 points per dollar spent across a wide range of popular categories is one of the more lucrative offerings in the world of points and miles. The Citi Premier comes with a $95 annual fee and is currently offering a solid sign up bonus of 80,000 points after you spend $4,000 on purchases within the first three months. It also has some valuable transfer partners to make the most of your rewards. Add in access to Citi Entertainment plus a $100 hotel credit for any single-stay hotel booking that exceeds $500 or more, excluding taxes and fees, booked through the Citi travel website, there are few reasons why the Citi Premier should not be in every traveler’s wallet.

Pros

  • Earns 3x points on restaurants, supermarkets, gas stations, air travel and hotels.
  • $100 annual hotel savings benefit (on single hotel stay bookings of $500 or more, excluding taxes and fees, booked through thankyou.com)
  • Points transfer to 16 airline programs, from JetBlue to Virgin Atlantic.
  • World Elite Mastercard benefits, extended warranty, damage and theft protection.

Cons

  • $95 annual fee
  • Lacks travel protections that other travel rewards cards come with
  • For a limited time, earn 80,000 bonus ThankYou® Points after you spend $4,000 in purchases within the first 3 months of account opening
  • Earn 3 Points per $1 spent at Restaurants and Supermarkets
  • Earn 3 Points per $1 spent at Gas Stations, Air Travel and Hotels
  • Earn 1 Point per $1 spent on all other purchases
  • Annual Hotel Savings Benefit
  • 80,000 Points are redeemable for $800 in gift cards when redeemed at thankyou.com
  • No expiration and no limit to the amount of points you can earn with this card
  • No Foreign Transaction Fees on purchases