Didn’t get a refund for a canceled flight? Here’s why you should call back now

In light of the decreased demand for air travel, airlines have slashed their schedules and consolidated flights.

To save cash, some have also made it much harder to get a refund for canceled flights. Though this violates the rules set forth by the Department of Transportation (DOT), carriers got creative in how they interpret 'canceled flights'. In fact, on Monday, I reported about two U.S. carriers who are blatantly defying the refund rules by redefining the meaning of a canceled flight.

Turns out, the DOT issued new guidance on Tuesday that reaffirms the customer-friendly view that you are still entitled to a refund, even if an airline changes their refund policy.

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What are your rights to a refund?

When an airline cancels your flight, you are entitled to a refund, even if you purchased a non-refundable or basic economy ticket. This is thanks to the DOT ruling that states that "if your flight is cancelled and you choose to cancel your trip as a result, you are entitled to a refund for the unused transportation – even for non-refundable tickets."

These rules apply to all flights that are to, from or within the United States, regardless of your carrier. Note that this doesn't apply if you voluntarily cancel your flight. You must wait until the airline cancels your flight on their end. That's why I always recommend waiting until the last minute to make any changes to your reservation.

Related: Why airlines cancel flights at the last minute

When airlines began canceling significant portions of their schedule, many customers became eligible for refunds. In order to restrict how many refunds they process, Hawaiian and United both updated their refund policies.

United was the most egregious since it made five changes to its policy before landing on the current version. In the end, both Hawaiian's and United's refund policy redefines the meaning of canceled. Both state that you can only get a refund if your flight is canceled and you are not rerouted within six hours of your original departure or arrival time.

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Aside from the fact that these rules defy those set forth by the DOT regarding canceled flights, both carriers are applying the new policies retroactively. That means that even if you purchased your ticket well before these changes were made, you'd still be subject to the new policies.

On Tuesday the DOT ultimately put an end to this.

Airlines can't change refund policies retroactively

In the second enforcement notice related to the coronavirus pandemic, the DOT recognizes that some airlines (like Hawaiian and United) have changed their refund policies retroactively.

In response to customer complaints, the DOT states that:

The Department interprets the statutory prohibition against unfair or deceptive practices to cover actions by airlines and ticket agents applying changes retroactively to their refund policies that affect consumers negatively. The refund policy in place at the time the passenger purchased the ticket is the policy that is applicable to that ticket.

This means that the refund policy that was in place when you purchased your ticket is the one that airlines must follow.

That's great news for Hawaiian and United flyers who've struggled to get refunds recently. Hawaiian added its new refund rule to the Contract of Carriage on April 21 and United made its updates in early March — roughly between March 10 and 15.

So, if you purchased your ticket before these dates, you are governed by the previous refund policies, which allow for refunds for canceled flights, without the condition of being re-accommodated on another flight within six hours of the original.

Related: How to refund a nonrefundable airline ticket

Interestingly, American revised its schedule change policy on April 8. Previously, flights that were changed by an hour or more were eligible for refunds. Now, it has to be four or more hours to qualify for a refund. But American did the right thing from the outset and only applied the new policy to newly issued tickets. That's part of the reason why AA has impressed us with how it's responded to the coronavirus.

Note that even if you purchased your ticket after Hawaiian and United made updates to their refund policy, the updates seemingly violate the DOT guidelines, so you should be sure to file a chargeback and consumer complaint if you still can't get a refund for a canceled flight.

How can you get a refund under the revised policies?

First things first is that the airlines need a few days to digest the enforcement notice and distribute new guidance to their customer service agents. Once the airlines clarify their policies internally, then you should call back if you've been denied a refund for a flight that the airline canceled.

If you get pushback from the customer service agent, politely cite the new guidance from the DOT. If that doesn't help, try hanging up and calling back.

Related: Tips to reach airline customer service quickly

If you're at an impasse, then it's time to consider reaching out to your credit card company to dispute the charge. When doing so, make sure to file a consumer complaint with the DOT as well.

Bottom line

Throughout the pandemic, airlines have needed to decide how to handle these trying times: do we pinch every penny and hope that customers forget about the unfriendly changes when travel resumes or do we stand by the letter of the law?

Though some carriers have chosen the former, the DOT has continued to side with flyers. So if your flight was canceled and an airline denied you a refund under a newly revised policy, it's time for you to call back. There's money waiting for you on the other end.

All photos by the author.

For more about coronavirus changes and cancellations, check out:

• Why you should think twice before accepting an airline voucher — even with a bonus
• You are entitled to a refund for your canceled flight — even if the airline says you aren't
• It's now more important than ever to monitor your upcoming reservations