Can a travel agency keep your refund after the airline has already handed it over? Several readers want to know, and I suspect this is the start of a troubling new trend.
An Arizona woman had a death in the family last month and canceled a trip. American Airlines approved the refund and sent the money, about $535 a ticket, to the online agency that sold her the ticket. Three weeks later the agency still has it. Its explanation is that the fare was nonrefundable, so it gets to pocket the money.
Here’s the part that surprises people: This isn’t the familiar fight over whether a refund is owed. The airline already said yes. The airline already paid.
The money stopped at the agency.
Three readers brought me versions of this in the past three weeks. A retired attorney in Sacramento bought $5,533 in Lufthansa tickets through Booking.com. Her partner needed emergency triple bypass surgery two weeks before departure. Booking.com pointed her to Lufthansa, Lufthansa pointed her back to Booking.com, and she ended up with a $221 refund of taxes. Her card issuer covered $3,000. She’s out $2,314. A musician in Los Angeles had $1,461 in JetBlue Travel Bank credit and says an agent told him to let it expire, then call for a 12-month extension. What he got was $487, good for 14 days.
Why this looks like the beginning of a trend to us
We’ve seen this before, but rarely. In 2013 a Seattle reader canceled a Delta flight after jaw surgery. Delta sent the $1,771 refund to her agency, and the agency kept it, pointing at its own refund policy, until we called. In 2025 another reader spent more than a year chasing the $641 her advisor owed her after Celebrity Cruises overcharged her. She got a check only after our advocates contacted the agency and the cruise line.
Those cases are 12 years apart. The three in this story arrived within a week of each other. My team suspects that’s the start of a pattern. If it is, the practical advice changes. Knowing your airline’s refund policy is no longer enough. The supplier has one set of rules, the agency has another, and your money has to clear both.
What the rules say
The Transportation Department settled this question in 2024. Its refund rule, published in April of that year, requires ticket agents that are the merchant of record to issue refunds promptly when they’re due. That’s seven business days for a credit card refund, and 20 days for anything else. Agencies had to comply by late October 2024.
Merchant of record means the name on your card statement. If your statement says the agency, then the agency owes you the money.
In comments on the rule, ticket agents told the department they’re the merchant of record in fewer than 10% of transactions. The rest of the time your statement says the airline’s name, and you’re back to asking the carrier.
The 24-hour free-cancellation window every traveler has heard of applies to airlines. It doesn’t apply to tickets bought through an online agency.
Can you sue to get your money back?
Not under the DOT rule. Your contract is a different story. In American Airlines v. Wolens, the Supreme Court held in 1995 that the Airline Deregulation Act bars states from applying their own consumer protection standards to airlines, while leaving courts free to enforce the deal the parties actually struck. The court narrowed that opening in 2014 in Northwest v. Ginsberg, ruling that a claim built on the implied duty of good faith and fair dealing is preempted where state law won’t let the parties contract around it.
So what do you do about it?
Look at your card statement first and find out whose name is on the charge. That line determines who you’re arguing with.
If the agency’s name is there, write to it and cite the refund rule by name, then file with DOT the same day rather than waiting. Ask the airline for written confirmation that it remitted the funds and the date it did. Nothing moves an agency like a paper trail showing the money arrived.
In cases like these, don’t wait too long to file chargeback. Our Sacramento reader got $3,000 that way. That’s $3,000 more than the agency gave her.
Europe’s version doesn’t fix this, either
The EU reached a political agreement in June on rewriting its air passenger rights rules, the ones most Americans know as EU261. The highlights: Refunds after a downgrade within 14 days, a reply to a compensation claim within 30 days. From what I can find, the deal says nothing about agencies and booking platforms.
The rule that does reach into that space is the revised package travel directive, which was adopted in April of this year. It requires organizers to refund travelers within 14 days and requires providers to pay organizers within seven days. It applies to packages, but not to a flight you bought by itself, and member states have more than two years to write it into national law. It’ll be 2029 before it becomes effective.
- If you said yes: What should happen to an agency that holds the money for weeks, and who should make it pay?
- If you said no: What would justify keeping money that belongs to a customer?
Either way: Do you know whose name is on your card statement for your last ticket?
My take
I booked a ticket through a consolidator once, and only once, to save a few bucks on a flight to Frankfurt. The schedule changed, and I spent a week learning that the airline had my reservation and the consolidator had my money. I think I got the money back only because a supervisor took pity on me. But that’s not a consumer protection system.
Several House members asked DOT last year to reconsider the agency’s refund responsibility, arguing that small travel advisors shouldn’t have to front money they haven’t received. A bill, the Flight Refund Fairness Act, would exempt small agencies outright. Meanwhile the 5th U.S. Circuit Court of Appeals threw out the department’s fee disclosure rule, and DOT spent this past July loosening the rules that govern what airlines have to show you about fees.
None of this is going in the passenger’s favor, and the holidays start in a few weeks. Oh, and the customer with the missing $535 ticket? We’re still working on that one. We’re not going to let the agency keep that money.
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