Do I Get My Taxes Refunded if I Cancel an Award Ticket?
Reader Questions are answered twice a week by TPG Senior Points & Miles Contributor Ethan Steinberg.
It can come as a bit of a disappointment for new award travelers to learn that these "free" flights we keep talking so much about aren't actually free. Every award ticket you book will come with some amount of taxes, from $5.60 (for most flights originating in the US) on the low end, up to $1,000 or more for some long-haul premium-cabin awards. TPG reader Roberto wants to know if his taxes will be refunded if he has to cancel an award ticket ...
[pullquote source="TPG READER ROBERTO"]I booked an award ticket using AAdvantage miles on British Airways and paid around $600 in taxes. If I cancel the ticket I know I'll have to pay a fee to reinstate my miles, but will the taxes get refunded?[/pullquote]
Great question Roberto, as there are two important monetary considerations to be aware of when cancelling an award ticket. The first is that you'll often need to pay a fee to reinstate your miles, and the second is the question of whether or not your taxes will be refunded. Let's take a look at how each of the major US airlines handles this issue. The good news is that all three — American, United and Delta — have the same consumer-friendly policy here.
American Airlines has generous award-change policies, allowing you to make free changes to your reservation as long as you keep the origin, destination and class of service the same. This means that you can book a first-class award on Cathay Pacific from the US to China, and if Japan Airlines opens up award space at the last minute as it so often does, you can switch for free. I took advantage of this feature when planning my mega-Marriott-Maldives trip last spring, but I ultimately needed to cancel one of the speculative Qsuites reservations I'd made. Sure enough, after paying the $150 cancellation fee, my taxes from the award ticket were refunded to my account.
If you dig into United's contract of carriage, the intense set of terms and conditions that govern your entire interaction with the airline, you'll find that rule 27 section B governs voluntary refunds. While booking service charges are nonrefundable, if you have an unused ticket that you submit a refund request for, you'll be refunded the full cost including all taxes you pay. This means that fuel surcharges and departure taxes will be refunded, but not any change fees or booking fees. Delta has similar language in its SkyMiles terms and conditions, noting that "taxes and fees for unused award tickets are refundable upon request."
Southwest follows a slightly different policy, partly because it doesn't have any international airline partners which are often the ones charging high fuel surcharges. Most Southwest award tickets will have exactly $5.60 in taxes, the standard 9/11 security fee applied to every flight originating in the US. Southwest is incredibly generous with its free award cancellation policy, but note that you won't receive a refund of the $5.60. Instead, it will be held in the form of a travel voucher which can be used towards future Southwest flights.
Alaska Airlines charges a fee to cancel an award ticket after 24 hours, but you'll get your miles and any taxes paid refunded. However, the $25 partner award booking fee and $15 call center booking fee (for awards booked over the phone) are nonrefundable.
Bottom Line
US airlines don't always stick to common sense when it comes to ancillary fee collection, but Roberto can rest assured that if he cancels an award ticket booked through American, United or Delta, he'll be refunded for any taxes or fuel surcharges he paid. The two exceptions to keep in mind are award service fees — like change fees or close-in booking fees, which usually aren't refundable — and Southwest award flights which will refund your $5.60 security fee in the form of a travel credit.
Thanks for the question, Roberto, and if you're a TPG reader who'd like us to answer a question of your own, tweet us at @thepointsguy, message us on Facebook or email us at info@thepointsguy.com.
Featured photo by Nicky Kelvin/The Points Guy
TPG featured card
at American Express's secure site
Terms & restrictions apply. See rates & fees.
| 4X | Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 4X | Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 5X | New! Earn 5X Membership Rewards® points on prepaid hotel stays booked through AmexTravel.com or the Amex Travel App. |
| 3X | Earn 3X Membership Rewards® points on flights booked through AmexTravel.com, the Amex Travel App, or purchased directly from airlines. |
| 2X | Earn 2X Membership Rewards® points on prepaid car rentals booked through AmexTravel.com or the Amex Travel App and cruises booked and paid through AmexTravel.com. |
| 1X | Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases. |
Pros
- Valuable dining and food-related credits
- Flexible rewards with airline and hotel transfer partners
- Multiple travel and purchase protections
- No foreign transaction fees
- Access to Amex Offers for additional savings (enrollment required)
Cons
- Not as useful for those living outside the U.S.
- Some may have trouble using Uber and other dining credits
- You may be eligible for as high as 100,000 Membership Rewards® Points after you spend $8,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you’re approved and find out your exact welcome offer amount – all with no credit score impact. If you’re approved and choose to accept the Card, your score may be impacted.
- Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- New! Earn 5X Membership Rewards® points on prepaid hotel stays booked through AmexTravel.com or the Amex Travel App.
- Earn 3X Membership Rewards® points on flights booked through AmexTravel.com, the Amex Travel App, or purchased directly from airlines.
- Earn 2X Membership Rewards® points on prepaid car rentals booked through AmexTravel.com or the Amex Travel App and cruises booked and paid through AmexTravel.com.
- Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
- Pay It® lets you tap in the American Express® App to quickly pay for small purchase amounts throughout the month and still earn rewards the way you usually do. Plan It® gives you the option to split up big purchases into equal monthly payments with a fixed fee. You’ll know upfront exactly how much you’ll pay.
- Updated! $120 Dining Credit: Earn up to a total of $10 in statement credits monthly when you pay with the Gold Card at Grubhub (including Seamless), Buffalo Wild Wings, Five Guys, The Cheesecake Factory, and Wonder. This can be an annual savings of up to $120. Enrollment required.
- $100 Resy Credit: Get up to $100 in statement credits each calendar year at over 10,000 qualifying U.S. Resy restaurants after you pay for eligible purchases with the American Express® Gold Card. That’s up to $50 in statement credits semi-annually. Enrollment required.
- $84 Dunkin' Credit: Earn up to $7 in monthly statement credits after you pay with the American Express® Gold Card at U.S. Dunkin’ locations. Enrollment required.
- $120 Uber Cash on Gold: Enjoy up to $120 in Uber Cash annually with your Gold Card. Just add your Card to your Uber account and you'll get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an Amex Card for your transaction.
- New! As an American Express® Gold Card Member, you can enjoy complimentary Hertz Five Star® Status. Enjoy benefits like skipping the counter at select locations, adding an additional driver at no additional cost*, and vehicle upgrades**. Benefit enrollment and Hertz Gold+ registration are required. *Additional drivers must meet standard rental qualifications and must be a spouse or domestic partner to qualify as complimentary. Other additional drivers subject to fees. **Benefits are subject to availability and vary by location. Additional Hertz program Terms and Conditions including age restrictions apply.
- Take advantage of a $100 credit towards eligible charges* at over 1,300 upscale hotels worldwide when you book The Hotel Collection through AmexTravel.com or the Amex Travel App **. *Eligible charges vary by property. **The Hotel Collection requires a two-night minimum stay.
- Book your travel through the Amex Travel App with added peace of mind – backed by American Express® service and support. Only for American Express® Card Members.
- Whenever you need us, we're here. Our Member Services team will ensure you are taken care of. From lost Card replacement to statement questions, we are available to help 24/7.
- No Foreign Transaction Fees.
- Annual Fee is $325.
- Terms Apply.