Ugh…American eliminates 24-hour holds, changes to 24-hour refunds

(HT: The Forward Cabin and FlyerTalk)

DFW Founders Plaza

American Airlines 777-300ER

The US Department of Transportation has long required that airlines offer some sort of mechanism for consumers to request a refund within 24 hours of purchasing a ticket.  Most airlines chose to offer customers the ability to call and cancel their ticket for a refund within 24 hours, but American went a different (and more customer-friendly, in my opinion) direction: customers could place their ticket on hold for 24 hours for free.

Word has spread that, effective 1 April 2016, American will cease to offer the 24-hour hold option on purchased tickets and will instead switch the “refund within 24 hours” model that everyone else uses.

Here’s how the new system will work:

Call within 24 hours for a refund

  • Applies to revenue (i.e. you’re paying for the ticket tickets
  • No refunds for tickets purchased within 7 days of travel

Hold tickets for free

  • Only applicable on award tickets

Why the 24-hour hold makes sense for customers

I’m searching airfares fairly constantly throughout the day, hunting for good deals and future trips as I try to re-qualify for American’s Executive Platinum status.  When I find a good fare, I love the option of putting it on hold while I check with my boss for vacation time or check with friends/family to see if any want to come along.  If things don’t work out, fantastic, I can cancel the hold right there on American’s website.  If things do work out, even better, my price is still locked in.

Why American probably hates the 24-hour hold

It costs me nothing to hold a ticket and take it out of inventory, so naturally I’ll put more tickets on hold than I end up using, taking them away from customers who would’ve potentially purchased them had they remained in inventory.  That said, though, if I pull a seat out of inventory there’s a good chance it was in the cheapest fare bucket available, so someone randomly searching fares for me city pair could end up paying more for their ticket as a result.

Why Refund Within 24 Hours is bad for customers

American has consolidated many of its call centers, leading to very long hold times, especially during irregular operations (inclement weather, etc.).  Executive Platinum status holders have their own dedicated phone lines and there are still constantly reports of long delays whenever inclement weather hits any of American’s hubs.  Calling to request a refund will clog up the phone lines even more and cause customers to spend more time chasing American around to get their money back in the case travel plans fall through.

What American can do to make this transition easier for customers

American can be rock stars through this transition by making it easy for customers to cancel and receive their refund on the website, negating the need for a phone call into Reservations.  I imagine American doesn’t want to make it that easy to cancel a ticket but this would go a long way in ensuring the phone lines remain free for things like rebooking during irregular ops.

Is it ok to not be completely upset about this?  Are you just trying to foment anger and vitriol?  Was that previous question just an excuse to use both “foment” and “vitriol” in a sentence on a travel blog?

Many people will not be affected by this and it will not be a big deal for them.  I’m not trying to stir up anything towards American, just calling it like I see it per the above.  And yes, I like using SAT words in the blog every once in a while.

 

What do you think about the change?  Much ado about nothing or a big inconvenience?

3 Comments

  1. Can the refunds be requested online? It would seem that the processing fee for accepting payment, then refunding it (if requested) would be a deterrent for this .. but maybe they know something we don’t. No credit card fees if the item is refunded while still pending, etc.

    Now, it costs them money to issue/refund tickets, rather than NOT processing anything until the hold is executed and converted. Odd indeed.

    Reply
    • I imagine customers will eventually be able to request refunds online, but probably not in the near term.

      Reply
  2. It is a big inconvenience for me! Many times I book tickets for my spouse/children, but need to check with them first…this will probably lead me more to Google flights and go for the cheapest option, not necessarily AA.
    In the past, I only looked at AA…

    Reply

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