How a $10 Travel Credit Cost me $200 — Reader Mistake Story

Today, I want to share a story from TPG reader Avon, who fell victim to an unusually strict expiration policy. Here's what he had to say:

Many people love Southwest Airlines because of their policy of no change fees, and I've taken advantage of it often by rebooking the same flight whenever the fare goes down. But I learned the hard way you have to be careful when using Southwest flight credits to purchase another ticket.

A few years ago I bought a ticket in May for a flight that Christmas. I later rebooked that flight when the price dropped, so I had $10 in flight credits. The following February I booked another Southwest flight for April, and I applied the $10 credit to my $290 fare. Then something came up and I had to cancel my April trip, but no change fees equals no problem, right? Sure enough, I canceled my flight and got $290 in Southwest credits.

I didn't find out until later that any new ticket purchased with a credit from a canceled ticket inherits the expiration date of the original. By applying my old $10 credit to the more recent purchase, I had caused the entire $290 ticket to expire in May, only a few months (rather than a year) from when I bought it. By "saving" $10, I lost $280. After much complaining on my part, Southwest extended the expiration date for $99 of credit, but I still lost almost $200.

Now I only use Southwest credits when the new ticket is of nominal value, and I keep an eye on the original expiration date. I also try to apply credits only to one-way tickets so that only part of my itinerary inherits the expiration date of the credit.

Southwest is known for its customer-friendly change and cancellation policies, but the airline imposes a few restrictions that seem draconian by comparison. When you cancel a non-refundable flight, you can redeem the value of your ticket toward future travel for up to 12 months. However, the entire value of your new ticket takes on the earliest expiration date of any funds used. For example, if you book a $300 ticket with $1 of funds set to expire in a week, $100 of funds set to expire in nine months and the remainder in cash, the whole balance (including the $199 you paid in cash) will expire in one week. If you have to cancel your new reservation and can't rebook before then, all $300 will be forfeited.

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Another quirk to watch out for is that modifying a refundable Southwest fare now results in the fare becoming non-refundable. This generally isn't a big deal if you're booking an award, since in that case the change only applies to any taxes and fees you've paid — your points will still be refunded to your account. However, it can be problematic if you're booking a revenue fare, or if you're flying internationally (where those taxes and fees tend to be more expensive).

I appreciate this story, and I hope it can help other readers avoid making the same mistake. To thank Avon for sharing his experience (and for allowing me to post it online), I'm sending him a $200 airline gift card to enjoy on future travels, and I'd like to do the same for you. Please email your own travel mistake stories to info@thepointsguy.com, and put "Reader Mistake Story" in the subject line. Tell us how things went wrong, and (where applicable) how you made them right. Offer any wisdom you gained from the experience, and explain what the rest of us can do to avoid the same pitfalls.

Feel free to also submit your best travel success stories. If your story is published in either case, I'll send you a gift to jump-start your next adventure. I look forward to hearing from you, and until then, I wish you a safe and mistake-free journey!