Why did my ticket refund take forever and a day?

Gripes about lengthy refunds are not unique to the travel industry, or even to airlines. But if you want your money back for a ticket, you should probably be prepared for a long wait.

Cecil Lau wishes he had known when he asked American Airlines for a refund on a ticket from Toronto to Hong Kong. As a refresher, most discounted airline tickets are nonrefundable, but some are. Lau was lucky enough to have one. So when he asked for his money back, American agreed to credit his card $1,300.

Only, it didn’t say when it would get around to it.

“Now, almost two months later, I still see no credit back to my card,” he says. “I called American again and they said the refund had already been processed and credited to my card.”

U.S. regulations are clear about the timing of refunds. When a refund is due, the airline must forward a credit to your card company within seven business days after receiving a complete refund application, according to the Transportation Department. However, the credit may take a month or two to appear on your statement.

I’m unable to find a similar requirement under Canadian regulations, at least as it applies to airlines, but it stands to reason that an airline can’t keep your money indefinitely — although, if anyone needs the money right now, it’s probably American.

But Lau’s problem is hardly unique, and it’s not limited to airlines. Travel agencies — and especially online travel agencies — keep your money for a while. When I’ve investigated this refund latency, experts tell me the following: First, there are no real requirements for a prompt refund. It’s just a gray area some companies exploit.

Second, while technology exists to take money out of your credit card account in a few seconds, there’s no incentive to return it as fast. So companies don’t invest in the technology and human resources necessary to process a fast refund.

And third — and this is perhaps the most upsetting of all — companies can benefit from holding on to your hard-earned money. Having that money in their coffers, even for a few extra months, can have certain financial benefits. (Think of it as a microloan, with you as the unwilling lender.)

It’s unclear what caused Lau’s delay.

“I called the credit card company and they said they don’t see the reverse-transaction anywhere,” he says. “I got passed onto the dispute department and they requested some form of confirmation that American did indeed refund my ticket.”

The mystery deepened when he checked the AA.com website, which showed he hadn’t requested a ticket refund.

“Yet the system also shows that the ticket has been refunded,” he added. “I requested American to send me a refund email confirmation, and they said ‘We don’t do that.'”

Efforts to call American were unsuccessful. (“No one ever picks up the phone,” he says.)

This isn’t an easy case. A credit card dispute is unlikely to work, because the window is long past, and besides, the airline insists it’s sent the money. But without a written verification, which would serve as a debit memo, the credit card company is powerless to help.

The only option Lau had was to wait — or to contact me. He chose the latter.

I contacted American and it processed the $1,300 refund, minus an explanation. If I had to make an educated guess, I’d say this was just a system problem exacerbated by the company’s bankruptcy.

Not that it’s an excuse.

If you ever find a company dragging its feet on a refund — whether it’s an airline or any other company — don’t let it get away with it. Contact your credit card company right away, appeal your case to someone higher up at the company, and if that doesn’t work, please let me know.

Corporations, contrary to what some politicians might say, are not people. They don’t feel the same pain you or I do when that refund you were expecting doesn’t arrive in your account.

Sometimes, you have to remind them of that fact.

Christopher Elliott

Christopher Elliott is an author, journalist and consumer advocate. You can read more about him on his personal website or contact him at . Got a question or comment? You can post it on the new forum.

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  • TonyA_says

    I suspect they simply forgot to process the refund. I am not sure there is any other valid reason. Unless the airlines are forced to adopt a trouble ticket system and a certain time commitment, then they can take their sweet time with refunds.

  • Carver Clark Farrow

    I can only speak from my personal experience. My refunds have always been processed promptly. I even had the Le Meridien Hotel in Paris improperly charge me for mini-bar items which I never used. I called them, they apologized, and the refund hit my card in a matter of days.

  • http://flyicarusfly.com/ Fly, Icarus, Fly

    Laws without some form of punishment when they are broken seem useless. There needs to be a fine if the refund hasn’t been processed in like 45 days, no?

  • EdB

    In this case, where the law says 7 business days, the fines need to start on the 8th day I would think.

  • Jennifer M.

    I agree that these refunds take entirely too long. My company had a policy of requiring staff members to purchase their own tickets (but then request a travel advance to cover 100% of the ticket price because we do have a lot of entry level staff who travel overseas and can’t afford a $3K ticket on their salaries). I was told on a Wednesday that I needed to fly overseas on Saturday so I bought the ticket. Friday the trip was cancelled. Plenty of time for the charge to hit my credit card. 10 weeks to refund my card (less the cancellation fee of course). I had to keep the travel advance because I do not carry balances on my credit cards and I wasn’t going to let a work related expense mess that up for me. Finance kept bugging me and bugging me to clear the advance, but I wouldn’t budge until Delta credited my AmEx and then AmEx had to send me a check.

  • http://flyicarusfly.com/ Fly, Icarus, Fly

    All the better! But for some reason, 7 days sounds awfully fast. Maybe I’ve been too conditioned to expect very little from the airlines to the point where I’d be happy with 45 days. What does that say about the current state of affairs?

  • EdB

    All the reason for the fines to start earlier and be significant enough to get the airline’s attention.

  • Nigel Appleby

    If I were being unduly suspicious or cynical, I would suspect that some companies delay refunds in the hope that the customer will forget about the refund and the company can keep the money.

  • ExplorationTravMag

    Or alternatively, they need to start paying interest on the refund to the person owed.

  • Daddydo

    This is really strange. We average about 4-6 weeks. I never have a problem with that. The e-mail is sent to our office within minutes confirming the refund and that’s normally that. Obviously, Cecil tried to get something done, thought that he was observing the proper line of communications, but failed. I am glad that the refund came, but why suffer with these problems. 10 hours of communicating, being on hold, writing letters, just can’t be worth a $30.00 average agent fee. If we book the hotel and car, we waive the fee. Find yourself a good, BBB, ASTA certified travel agent, and deal with them. Your blood pressure will go down.

  • bodega3

    **Travel agencies — and especially online travel agencies — keep your money for a while**
    Chris, this is false. The only amount a agency keeps is their commission or service fee. When you purchase a ticket from an agency, online, homebased or brick and mortar, when the ticket is issued, it HAS to be reported during the reporting period the ticket was issued. The reporting period is one week long and the period closes at mindnight on Sunday. All tickets have to be reported to ARC and the report has to be completed and submitted by Tuesday following the Sunday close. ARC then takes the information and submits it to the carrier who handled the charge or refund. If you pay cash, the money for that ticket comes out of the agency’s bank account by ARC.
    For refunds, there is a similar procedure. The ticket is submited to ARC, which inturns passes this on to the carrier. It is out of the agencies hands. If the ticket was paid for by cash, the agency has to watch their account for the carrier’s refund before they will cut you a check. If your payment was by a credit card, the carrier will refund to that…not the agency. I just had a client wait 2 months for their refund. All I could do was contact ARC who checked with the carrier and got the message that the carrier was checking on the fare for a valid refund. It was out of my hands.

  • LeeAnneClark

    I like that idea even better!

  • TonyA_says

    Very good and accurate description of the B&M AGENCY sales reporting and settlement process. I might venture to add that OTAs may have a lot more in-house Credit Card sales where they charge the card themselves especially for international tickets.

    The important takeaway here is the most TAs have no idea [themselves] what the airline is doing [or not doing] and why it takes that long to get a refund. It is like a black hole.

  • bodega3

    They still have to report those tickets for the week they issue them. But yes, if they charge your credit card in house, you don’t know when they issue the ticket as the carrier isn’t handling it. That is an important fact to point out. Look to see the issuing company. This can be helpful when you need to get the refund!

  • emanon256

    I used to fly F9 a lot, and I usually buy the refundable tickets because they are still very low cost. When requesting a refund, I used to call and would always have the credit in 7 days. Since they got bought by Republic, the refunds have started taking months. Not to mention I am usually on hold for a minimum of an hour to speak to someone, and usually have to call 3 times to get the refund because it keeps getting stuck (their words).

  • Bill___A

    Air Canada refunds promptly. 10 days or less. Maybe one should just fly with the right airlines. I just had a ticket refunded from them this month, no problem at all.

  • AUSSIEtraveller

    most legacy airlines around the world arew so close to bankrupcy, that they are probably not able to offer fast refunds.
    Thankfully, most sensible airlines don’t offer any refund whatsoever anymore.
    Saves them an awful lot of money on not having to employ staff to handle refunds.
    Most now are also not refunding taxes & charges, as those amounts are considered cancellation charges.
    Fly Icarus Fly are you insane ?
    Who’s going to administer such a fine ?
    The refund police ?
    We all have far too many public servants we can no longer afford, especially in the USA, where the country in completely broke/bankrupt.

  • Maria Eugenia

    Christopher, where can I write you. I need your advise to follow a big complaint with DELTA. Thanks a lot.
    Maria

  • Cybrsk8r

    I have absolutely no doubt some companies do precisely that.

  • jim6555

    Last week, I called Sirius-XM Radio to dispute a charge that was posted to my American Express card. They agreed that it was their error and the funds were back in my account within three days. If one corporation can process a refund that quickly, why should it take another several months to do the same thing? Greed is the only explanation that I can think of.