Why won’t American Airlines refund my son’s airfare?

Even though Sampath Radhakrishna cancels his son’s airline ticket within 24 hours, his refund is missing in action. Now his credit card bill is due. Can the airline expedite the refund?

Question: I recently booked a flight for my son to fly from Los Angeles to Madrid through American Airlines’ website. Within 24 hours, I canceled the flight. My son spoke to American on the phone, and was told the refund will be credited to his credit card “soon.”
It’s been more than a month. My credit card payment is due in three days and the charge still shows as “pending review.” Can you help? — Sampath Radhakrishna, Cupertino, Calif.

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Answer: Your son’s reservation fell under the “24-hour rule,” which says that if you cancel an airline ticket within a day of making the reservation, you’re entitled to a full and prompt refund. (Certain restrictions apply for last-minute tickets.)

How prompt? Well, that’s the problem. 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 Department of Transportation. But the credit may take a month or two to appear on your statement.

Your son was at about the one-month mark. He’d been left with the impression that his refund would be issued “soon” and had interpreted that as less than a month. In fact, American would have been well within its rights to wait two months before returning the money.

Let’s pause for a moment to consider the absurdity of this situation. An airline is allowed to keep your money for two months — can you say “interest-free loan?” — while the rest of us must pay our bills promptly. Oh, and how long does it take American to withdraw the money from your son’s account? Seconds.

Something is just not right with this. American should have returned the money. In seconds.
This isn’t an American problem or even an airline problem. Corporate America creates rules that favor it and allow it to benefit from holding on to your money for a few extra weeks. I’ve asked executives about the sluggish refund process, and they’ve told me, with a straight face, that the problem is exacerbated by credit card billing cycles and overly cautious accounting processes. I think that’s nonsense. If they benefited from speedy refunds, they would have figured out a way to send you the money instantly. But they have no motive, so here we are.

A brief, polite email to one of American’s customer service executives might have shaken a check loose from the accounting department. I list names, numbers and emails on my consumer advocacy site.

I contacted American on your son’s behalf and it informed me that your refund has been processed — hopefully in time for him to avoid paying a big credit card bill.