What to do about the travel industry’s timeout clauses

A casual observer might have thought that Anthony LaMesa was booking a last-minute JetBlue Airways ticket from New York to Cancun, Mexico, on a whim, perhaps to escape the frigid winter weather.

Appearances can be deceiving, though. LaMesa needed to fly to Mexico for emergency dental care. But when he found treatment closer to home, he discovered that he couldn’t change his ticket.

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“When I booked this ticket, I thought I had the 24-hour cancellation window for a flight, which has been publicized all over the news,” he says. He didn’t. The 24-hour rule has an important, but often unarticulated, catch: It doesn’t apply to flights booked fewer than seven days in advance.

LaMesa was stuck with his purchase, and when he asked to cancel the ticket, he says, he got an earful from JetBlue. When he talked to one call-center representative, she “condescendingly” told him that she, too, had been “stung” by not reading the airline’s terms and conditions. When LaMesa pushed, she turned aggressive, he says.

“I was literally interrupted and then screamed at in the most cruel and harsh tone imaginable,” he says.

The 24-hour rule exception makes some sense. After all, an airline ticket booked less than a week in advance and then canceled might not be resold. But the way that JetBlue and other airlines disclose that restriction doesn’t make sense. If you’re booking a ticket online through JetBlue.com, you have to click on a tiny “fare restrictions” link to see the disclosure. And passengers booking within the one-week window aren’t offered any additional warnings that the 24-hour rule doesn’t apply, which can easily lead them to believe that they have a one-day grace period, when in fact they don’t.

“Gotcha” clauses related to timing are a venerated travel industry tradition. The most common restrictions pertain to vouchers or ticket credits, often rendering them all but useless after days, weeks or months. To avoid these limits, you have to think like a lawyer and act like a marketer, minding the fine print and asking yourself, “How would I try to stick it to customers — and get away with it?”

One perennial complaint is the ticket credit expiration. It happened to Mazen Hamza, a professional dancer from Philadelphia, who recently booked a nonrefundable US Airways flight from Philadelphia to St. Maarten and then canceled it. An airline representative told him that he had a year to use the ticket, which was true. But it was one year from the date of purchase, not the date of the flight. Sometimes, agents offer an incomplete or misleading explanation, but a look at any airline’s Web site reveals that the clock starts ticking when the booking is first made.

Hamza argued that there’d been no disclosure and that if he’d known, he might have made a different purchase decision. The airline refused to extend his credit, citing the written restrictions on his fare. He appealed to US Airways’ customer service department. “They responded that due to the fare type, there was nothing they would do,” he says.

Of course, the airline industry isn’t the only business that sets a timer on its offers. Hotels and car rental companies routinely insert clauses that can render their products useless or unusable after a certain amount of time. In legal parlance, the inconspicuous disclosure is called a material omission, and the timed variety is particularly worrisome, because it can render an entire purchase worthless.

Attorneys like Stephen Barth are often caught in the crossfire between a hotel that wants to be open about its restrictions and a sales department that would prefer to bury the timeout clauses in a sea of fine print. “The marketing and sales people are afraid that with bold, clear disclosure, the sale might not happen,” says Barth, who runs the HospitalityLawyer.com Web site. “But full disclosure is the best practice.”

Experts say that the old saw “Nothing lasts forever” never rings truer than when it comes to travel. The clock is ticking from the moment you press the “buy” button, and when your time’s up, you’ll probably be left with nothing.

But it isn’t the only way you can get taken. Car rental companies, and especially discount agencies that offer low daily rates and then add fees and surcharges, are notorious for setting a strict timer on their reservations. Show up too late, and they’ll cancel your reservation and force you to pay a more expensive walk-up rate. Return the car early, and they’ll recalculate your rate, asking for more money. Keep the car an extra half-hour, and you’ll pay for another day.

The most egregious example of a timeout is the expiration of loyalty points and frequent-flier miles. But it’s all in the contract: Companies can change the terms of their loyalty programs whenever they want to, for any reason, and they don’t have to notify you. I’ve lost count of the number of travelers who’ve complained to me of being stripped of hundreds of thousands of miles with little or no warning and no way to recover them.

The only way to avoid trouble with an expiring offer is to pay close attention to it and to the fine print of the contract or terms of service. Your options for recovering the value of your ticket or any damages are limited, say experts like Barth. Under many state consumer protection laws, you can make a claim for deceptive trade practices and recover your attorney fees and often up to triple damages. But, says Barth, the damages are often small and not worth the time and financial risk for individual consumers to pursue. Material omissions may say more about a company than they do about your ability to do your due diligence on a travel purchase, he adds.

“Businesses that omit or hide it in the fine print, they don’t get customer care,” says Barth. “They’re thinking about the short term.” Over time, these solely revenue-focused airlines, car rental companies and hotels will suffer as customers abandon them in favor of companies that do care.

LaMesa’s case resolved itself in a curious way. He e-mailed me on a recent morning, asking for help, and concurrently called out JetBlue, cc-ing me, on Twitter (I’m at @elliottdotorg and JetBlue is at @Jetblue, if you want to follow along). LaMesa didn’t have a leg to stand on, in terms of the fine print — his purchase was completely nonrefundable.

But I responded publicly, saying that JetBlue’s alleged handling of his complaint — screaming at him on the phone — was very “un-JetBlue-like.”

JetBlue, which appears to be uncomfortable having customer service problems played out in the media, fully refunded LaMesa’s ticket.

Does the travel industry impose too many "timeout" clauses on its products?

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58 thoughts on “What to do about the travel industry’s timeout clauses

  1. I bet the call center staff really yukked it up over the OP’s predicament. When a passenger calls to exercise one of those “rights” they have heard about online, it’s another chance to treat a customer like something scraped off the bottom of one’s shoe. How hard could it be to put a warning sentence on the booking site for people who make week-of-flight reservations?

    The year-from-purchase restriction on ticket credits, however, is the time limit that bites most of us. Because today’s travelers plan vacations several months ahead so their lawyers can decipher all those clauses and exceptions, ticket credits given for a problem arising enroute are worthless to most of us. Extending the time to at least three years would buy a lot of goodwill for practically no expenditure.

    1. I just went to make a dummy reservation on JetBlue’s site. Where it shows your flight options and fare type (“nonrefundable” or “refundable”), you click the little (i) icon next to each to see the fare rules.

      For the nonrefundable fare, in addition to all the checked back inclusions, fees, restrictions, etc., it says:

      Reservations made one week or more prior to a flight’s departure may
      be canceled without penalty up to 24 hrs. after the reservation is

      So, it’s right there, if the OP had bothered to look at the restrictions on his restrictive fare.

      1. That little (i) icon is where a customer would expect to see a standard set of rules for the fare type. Website design being part of my job description, there is a design principle that any special exception to a well-known rule like the “24 hour rule” that applies in a special circumstance should appear right at the point where the special exception is triggered.

        1. Website design being a part of my job description as well, I know that if every special circumstance that applied to the fare code were on the screen next to the price, the price would be practically unfindable on the page.

          I can imagine the outcry of Elliott readers who would complain about the fare being “shrouded in legalese” or “so hard to understand”. Look, this is 2014. Clicking the little icon next to the fare type is as simple as it gets.

          More than that, part of the industry “24 hour rule” includes the 7-day exception for many carriers.

          In other words, JetBlue’s one-week provision is no more the exception than AA’s 24-hour hold-only rule with no refunds, for example. Short story: there is no such thing as a standard 24-hour rule, and it was the OP’s assumption that was misguided. JetBlue’s disclosure is quite satisfactory.

          1. Actually, there IS a 24 hour rule mandated by the DOT. The “within 7 day” clause is part of that rule.

          2. Ah, i get what you’re saying. Yes, you can. I just went through for a Wednesday reservation and it offered a free hold option.

          3. AA is great. You can almost always hold your ticket. Its actually closer to a 48 hour hold rule. Hold ticket at 12:01am


          4. I’ve done that. For award tickets, it’s more like a week even. That is really handy when you’re trying to line a bunch of stuff up before pulling the trigger.

    2. I doubt the “call center” staff yukked it up. Jetblue uses home based agents for reservations so the dynamics of a call center environment would not necessarily apply.

      1. …although….since I haven’t followed this in a couple of years, I checked online for any changes to this and it does appear they do have plans to add call centers in their network to supplement the Salt Lake City “call center” of home based agents.

  2. “in the most cruel and harsh tone imaginable”

    What does that mean? Were the words cruel, or just the ‘tone’? I didn’t read a single word from the JetBlue agent that was mean or harsh. It’s just a bunch of adverbs of how the OP felt.

    Anyway, I don’t really commiserate with the OP. When you pull back the veil of “condescendingly” and “screamed at,” it’s just another case of someone wanting a nonrefundable ticket refunded.

    1. Hearing “NO” is verbially abusive to an irate person who failed to read the fine print. Odds are OP dished out more to agent in anger than the other way around. Easy to lose temper when upset.

      1. I agree. Would love to hear the recording of this one.

        “When LaMesa pushed, she turned aggressive”

        LaMesa had no right to “push”.

          1. Depends upon the situation. I read the fine print on Choice Hotels loyalty before signing up. If I care to be in the know, I’ll try to understand the material.

  3. Chris,

    You forgot restaurant industry and gift cards. Cleaning out grandparents house, founds dozens of unused ones. They have wonderful fine print about incurring 1.50 charges after 12 or 24 months of no use. Some flat out expire. Other companies (blockbuster) cards are valueless due to bankruptcy.

    Seems cash spends anywhere, but once a company has the money, good luck. Terms and conditions apply. Gift cards and vouchers are time sensitive, depreciating, assets. Don’t use quick enough or forget, and they’re worthless.

    1. That all depends on the state where you live. In CA, those gift cards can’t lose value nor can gift certificates. None can have an expiration date and are good for as long as the store stays in business.

      1. It’s the same in BC. I don’t know whether it’s provincial legislation or federal. So it might be Canada-wide or in some of the other provinces as well

      2. “as long as the store stays in business” THIS IS CRITICAL STATEMENT.

        Many businesses in OZ have closed recently due to mainly to our very high wages & conditions. Even today 27JAN is a public holiday where many people in the hospitality industry get double pay, even though Australia Day was yesterday 26JAN but as it fell on a Sunday, we get another public holiday on the Mon.

      1. Your welcome. I’ve wondered why the issue of depreciating gift cards receives so little press.

        People think gift cards are thoughtful presents, but they often get stuck into a drawer, only to remain forgotten. Over time, fees diminish their worth until the card expires. Funny, considering money doesn’t go bad.

        Instead of gift cards, give cash. Might not be inventive but retains value and less likely to be cast aside.

        1. It is more about the vendors having to carry the liability on the books for too long. Don’t use them in place of money and if you get one, use it, don’t hide it away.

          1. I disagree. Money has already exchanged hands since gift cards are nonrefundable. The only manpower expended is the databasing software keeping tabulations on outstanding gift card balances.

            Long story short, vendors carry little liability seeing the system is in place for ALL gift card holders. Not just people who have old ones sitting around.

          2. This would be liability in an accounting sense. The basic accounting equation is assets = liabilities + equity. The asset is the cash paid for the gift card. The liability is the value of the gift card that will be redeemed at a date in the future. As an accountant, I think it would be a real issue to have a category of liability that grew and grew and would never decrease because of all the unredeemed cards, thus reducing my equity permanently. I would probably write them off after a few years, and if they were ever redeemed I’d fix the accounting at that time.

            When going thru my mom’s stuff, I founds some gift cards that had to be 6-7 years old. They still had full value.

          3. Blockbuster cards were rendered useless with their bankruptcy.

            Borders is out of business

            Most of the other cards had value, though with the warning on back about depreciation, it’s hard to acertain if money has been subtracted. The cards are generic and don’t have a face value printed on front.

          4. That is exactly the reason Southwest expired all of their unused drink coupons. At a value of $5 each, and the literately millions out there that had not been used (even if they would probably never be used because they had been throw away or otherwise destroyed by the recipients), the liability had to be an accounting nightmare.

      2. If you do please do sufficient research on each state’s escheatment laws. CA state doesn’t allow cards to expire, others do but at varying rates. That is why a Groupon or Living Social or whatever is clear that the value paid won’t ever expire but the ‘deal’ price does. Please realize that often it isn’t the company but the state laws.

        1. @omgstfualready:disqus

          You are incorrect. The law on the books ALLOWS companies to assess fees, but does not mandate fees be assessed.

          1. I made a post that hasn’t shown up yet. The law varies from state to state and in CA, no fees may be assessed. My other post has the link to the CA Gov website that states this.

          2. State by State issue with every jurisdiction setting diffrent guidelines. Prime Christer Elliott Material.

          3. Not talking about the fees, it was about the expiration of the cards. Fees were the way companies get around the escheatment – if there is nothing left they don’t have to send anything to the state. A friend had, at the time of Groupon starting up, their own type of company, just in one state and legal advice compelled them to pull away from it – way too complicated to track the people to figure out where / how to report it.

    2. Most store gift cards nowadays don’t expire. Many retailers changed their rules on this a few years ago, so if those were really old gift cards they may not have had the new language on them. When the retailers changed their rules, they applied them to all gift cards, even the ones which had the language indicating dormancy charges.

      1. I hate to be the bearer of bad news, but your statement is incorrect. The law mandates that the terms be clearly spelled out on gift cards. The length of validity, the fees accrued for inactivity, and the duration before a card expires.

        Let’s use Ohio. State law forbids fees from being assessed within a two year period. Thereafter, fees can be applied on a monthly basis after 12 months of inactivity.

        Try using this link for the Ohio AG site.

        tinyurl dot com/l5xemzs

  4. I recently bought a ticket on JetBlue, and just because I needed to know, I clicked on the T&C icon next to my fare. @backprop is right…it’s there, in bold, and in clear language. Just because the OP didn’t doesn’t mean he is exempt from the rules.
    And I sincerely doubt his version of the conversation. The “tone” was as “cruel” and “harsh” as possible? He must’ve never dealt with anything truly devastating before. Or he is sensitive beyond belief. I’ve been saying this more and more lately: just because someone doesn’t give you the answer you want, it doesn’t mean they are being rude.

    You should’ve dropped this one, Chris.

    1. Sadly, this OP didn’t deserve the help he got. He was shopping for medical services, jump the gun on the ticket, found something better after arranging for the Mexico trip and got caught not paying attention to what he was doing. But in this day and age of whining, break the rules, somebody will back you up and come to your rescue.
      We have heard in our industry that the airlines are reconsidering the selling of airline tickets online. Too many ‘mistakes’, whiners not paying attention to the rules and also the distribution costs. TA’s are looking better to them every day!

      1. We have heard in our industry that the airlines are reconsidering the selling of airline tickets online.

        I find that impossible to take seriously.

        Edited. A random Google search reveals exactly the opposite.

        Published: 24 Jun 2010

        A survey has indicated that airlines are investing in IT to provide richer functionality to their online customers and creating additional channels to market in order to increase the level of direct sales now that online distribution is almost universal.

        According to the 12th annual SITA/Airline Business IT Trends Survey, the airlines which carry the bulk of the world’s air traffic, are on course to sell the majority of airline tickets direct to passengers by 2013. The record 129 airlines who responded to this year’s survey carry over one billion passengers and are currently selling 40.8 percent of tickets directly to the public which breaks down as: over the Internet, 25.8 percent; through call centres, 10.7 percent; and interlining, 4.3 percent. These 129 airlines intend to bring their level of direct sales up to 55.1 percent by 2013. While sales through airline call centres and interlining will remain largely static, direct channel sales through websites are expected to jump to 37.9 percent.

      2. @bodega3:disqus

        The bigger problem stems from people like the OP who skew the playing field and create unsympathetic airlines. Shying away from bad press, Jetblue caved to the OP’s own mistake.

        When a person genuinely requires assistance (death or actual emergency), appealing to the powers becomes harder. I don’t think Chris intervening here was wise. Case of the Fine Print was VERY CLEARLY VISIBLE.

        1. Many, many times on this forum, participants have stated that they never read the rules. Even though to buy online you have to click that you read the terms and conditions, they scream foul when they are faced with the rules of the fare that they agreed to BEFORE they bought their ticket. Rule reading is not enjoyable. It is tedious, time consuming, confusing and out right boring. I am disappointed with JetBlue and think this is just as bad publicity for them when they bend the rules for a passenger that doesn’t deserve.

  5. I think I can muster up a tone way more harsh than the OP could imagine. I wonder what irresponsible and rude things were said by the OP……

  6. Some travel agents can void tickets without 24 hours, one of the few reasons for one of us using a travel agent for personal travel. My issue with timeouts is with vouchers that expire. If an airline gives you a voucher, it should last indefinitely.

  7. gee I want to buy really really really cheap fares, but because I can’t get my act together, I want these fares to be totally flexible without any cost to change date, time route or name.

    Yeh, that will work & all airlines will go broke tomorrow.

    Fully flexible tickets already exist & they are the most expensive.


    The more complicated the more expensive, it’s really that simple.

    Obviously people want simpler tickets, BUT this may lead to more expensive tickets.

    In Australia many cheap tickets are use it or lose it, so if you arrive late, forget etc. you don’t get a credit you get nothing which is the way it should be (no taxes refunded either-that’s the cancellation fee). Often consumer protection laws just make everything more expensive in the 1st place.

    Australian airline Qantas is going broke fast. They are looking to offshore their call centres as Australian wages & salaries & perks must be highest in the world.

    Did you know most Australians get a minimum of 4 weeks paid annual leave where they get 17.5% loading + many days sick leave + many days public holidays + superannuation.

    Apparently call centre staff in places like Philippines, Fiji & India get around AUD$1 or USD$1 an hour without any extras & that’s considered a good income in those countries. Luckily the Chinese don’t speak very good english or American !!!

  8. Have let my Hilton Diamond status lapse to Gold and am thinking about ditching all my loyalty-program credit cards in favor of a 1% cash-back. Really sick of saving points all year only to find out in December they’re suddenly worth half as much – Southwest and Hilton have both devalued their programs drastically the last few years.

  9. I consider myself to be a well informed frequent traveler, but I had not heard of the exception to the 24 hour rule until I read this story. But then I almost never cancel any flights I purchase and most airlines I deal with where I had to buy a last minute ticket always sell me a Y class ticket which, by default, is fully refundable.

  10. If I enjoy the benefit of business’s product or service without paying for it, that’s called theft. The only exception here is if it’s offered for “free,” and we all know that there’s no such thing, so even then, I’m paying for it somehow. The law is pretty clear on this. I don’t see why we can’t have that same legal protection go the other way, i.e., if a business enjoys the benefit of receiving (and keeping) my money without providing a product or service, that’s theft.

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