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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.

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.

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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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Apply for American Express® Gold Card
at American Express's secure site
Terms & restrictions apply. See rates & fees
Best for the well-traveled foodie
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

4XEarn 4X Membership Rewards® Points at Restaurants, plus takeout and delivery in the U.S.
4XEarn 4X Membership Rewards® points at U.S. supermarkets (on up to $25,000 per calendar year in purchases, then 1X).
3XEarn 3X Membership Rewards® points on flights booked directly with airlines or on amextravel.com.
  • Intro Offer
    Earn 60,000 Membership Rewards® points after you spend $4,000 on eligible purchases with your new Card within the first 6 months of Card Membership.

    60,000 bonus points
  • Annual Fee

    $250
  • 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

There's a lot to love about the Amex Gold card. It's been a fan favorite during the pandemic because of its fantastic rewards rate on restaurants (that includes takeout and delivery in the U.S.!) and U.S. supermarkets. If you're hitting the skies soon, you'll also earn bonus points on travel. Paired with up to $120 in Uber Cash (for U.S. Uber rides or Uber Eats orders) and up to $120 in annual dining statement credits at eligible partners, there's no reason that the foodie shouldn't add this card to their wallet. Enrollment required.

Pros

  • 4x on dining at restaurants and U.S. supermarkets (on the first $25,000 in purchases per calendar year; then 1x)
  • 3x on flights booked directly with the airline or with Amex Travel
  • Welcome bonus of 60,000 points after spending $4,000 in the first six months

Cons

  • Weak on travel outside of flights and everyday spending bonus categories
  • Not as useful for those living outside the U.S.
  • Some may have trouble using Uber/food credits
  • Few travel perks and protections
  • Earn 60,000 Membership Rewards® points after you spend $4,000 on eligible purchases with your new Card within the first 6 months of Card Membership.
  • Earn 4X Membership Rewards® Points at Restaurants, plus takeout and delivery in the U.S., and earn 4X Membership Rewards® points at U.S. supermarkets (on up to $25,000 per calendar year in purchases, then 1X).
  • Earn 3X Membership Rewards® points on flights booked directly with airlines or on amextravel.com.
  • $120 Uber Cash on Gold: Add your Gold Card to your Uber account and each month automatically get $10 in Uber Cash for Uber Eats orders or Uber rides in the U.S., totaling up to $120 per year.
  • $120 Dining Credit: Satisfy your cravings and earn up to $10 in statement credits monthly when you pay with the American Express® Gold Card at Grubhub, The Cheesecake Factory, Goldbelly, Wine.com, Milk Bar and select Shake Shack locations. Enrollment required.
  • Choose the color that suits your style. Gold or Rose Gold.
  • No Foreign Transaction Fees.
  • Annual Fee is $250.
  • Terms Apply.
  • See Rates & Fees