If your checked bag arrives late, the DOT thinks you should be guaranteed a refund

Checked-bag lovers — rejoice!

A new proposal by the U.S. Department of Transportation (DOT) would require airlines to refund checked-baggage fees if bags are considerably delayed. The story was first reported by The Associated Press, which cited unnamed officials. A source with knowledge of the plans, but was not authorized to talk publicly, confirmed the news to TPG.

This push is not new. DOT submitted a similar proposal into the Federal Register on Oct. 31, 2016. In the same year, Congress mandated that the DOT develop rules requiring airlines to promptly refund checked baggage fees to passengers in cases of late bag delivery. That mandate was not acted upon during the Trump administration.

Currently, regulations require only that airlines refund checked-bag fees if bags are lost altogether. The new proposal, which is expected to be filed in the coming days, would extend the refund to delayed checked bags and could come into effect as early as next summer.

This proposal would make enhanced checked-baggage protections an industry standard. However, it is quite lenient on carriers: Airlines would only be required to refund fees if a bag is over 12 hours delayed for a domestic flight or more than 25 hours delayed for an international flight.

Certain airlines, such as Delta, already have a checked baggage guarantee. For the Atlanta-based carrier, if checked bags do not arrive within 20 minutes of landing, passengers are eligible to receive 2,500 SkyMiles — worth $27.50 according to the most recent TPG valuation of SkyMiles — if they fill out this form.

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DOT's proposal is part of a larger push by the Biden administration toward more consumer protection in the airline industry. The DOT has recently been tough on airlines who have violated regulations: In June, the department proposed a fine of more than $25 million for Air Canada over denied refunds.

The Biden administration, as part of the same executive order, will also instruct the DOT to issue new consumer protection rules, according to sources. Those include:

• Refunds for seat-selection fees if not available
• Refunds for WiFi if it doesn't work
• Refunds for other services purchased a la carte, but not given

For the airlines, checked baggage is a big profit center. Passengers in the U.S. paid almost $6 billion in checked bag fees in 2019 alone.

The proposal still needs to be finalized by the DOT, but — if it goes through — it could be a first step in creating better consumer protection for passengers in the U.S.