Billed by American Airlines – and then billed again

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Russell Higley is promised a refund after his flight is canceled. But now his airline is trying to bill him twice for a flight he never took. What’s the problem?

Question: I read your columns and appreciate what you have done to help especially the less fortunate among us who are being wronged with financial penalties because we did not receive a promised refund. For someone like me, who is nearly 67 years old, with a pacemaker, heart and liver disease, and arthritis, this $371 loss is a nightmare.

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American Airlines canceled my flight from New York to Palm Springs, Calif., and agreed to refund my fare.

When the amount did not appear on my account, I disputed the charge on my American Airlines-branded credit card. My credit card offered a provisional credit, and the next day American issued a second $371 credit.

All was well until a few months later, when another $371 charge was placed on my account.

Despite a dozen phone calls to American Airlines customer service, emails, and three written disputes faxed to the airline, the charge has stuck and further, I have been charged $6 in interest against this unpaid balance.

When I call American customer service, they refer me back to American Airlines’ credit card; when I call American Airlines’ credit card, they refer me back to American customer service. No one takes responsibility to review what is an obvious error. I am getting nowhere! — Russell Higley, Elmsford, New York

Answer: American should have promptly refunded your ticket, and the refund should have stuck. In fact, according to American’s conditions of carriage — the legal agreement between you and the airline — refunds will be provided within seven business days of receipt of the required refund information.

Here’s what went wrong: When the refund didn’t appear as promised, you contacted your credit card to place the amount in dispute. Even though you have a co-branded American Airlines card, it is offered through a bank, so the airline has no control over what happens to your dispute. The bank sided with you.

American’s billing system appears to have crossed its own wires between your initial charge, which was initially a valid one, and your subsequent refund request. It looks as if it incorrectly tagged your dispute as being in error, probably because it was already in the process of refunding your ticket.

This case underscores the importance of being patient when you’re waiting for a refund from an airline, or any travel company. Of course, there’s no excuse for American dragging its feet on a refund, but by jumping ahead of it and disputing the charge, you ended up confusing it.

How long should you wait for a refund? Anywhere from four to six weeks. After that, you need to be bothering the company for the money. (I list the names and numbers of their managers on my website.) Use a credit card dispute only as a last resort.

I contacted American on your behalf, and it apologized, refunded your $371 and offered you a $125 voucher for a future flight.

Do airline refunds take too long?

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46 thoughts on “Billed by American Airlines – and then billed again

  1. The explanation in the article is confusing and makes it sound like he was double-credited. First by billing dispute and then when the airline finally processed his credit. In which case the airline grabbing back one of the credits was justified.

    Aside from being really really patient with the airline delaying a credit, how could he have handled this differently?

      1. Agreed. You don’t apply for a refund directly with the company and also dispute the credit card charge for the same item. What kinda logic is that other than to double dip? And that is why this took so long to straighten out.

  2. Quick to take, slow to return. Lesson in life. Where’s regulation when customers need regulation? You can be charged exorbitant fees for being late, but the company holding onto a payment dragging its feet suffers little. I believe there needs timeframes with stiff penalties. If refunds aren’t processed within 30 days where appropriate, companies are on the hook for the same penalties charged to customers.
    Bet we’d have LESS billing errors.

  3. however, waiting that long could result in losing your ability to chalenge the charge through the credit card at all.

    1. One of my cards gives me 3 months from the date of service (flight, hotel stay, even, etc. not purchase date), and another card I have gives me 6 months. I keep hearing about cards with very short dispute windows and I wish I knew what they were so I could avoid them. My 3 month card is a Chase Visa, and my 6 month card in an AmEx.

      1. my biggest concern is with a cancelled flight, what is the “date of service”, would it then revert to the date of charge, and if so, it is likely that waiting 4-6 weeks could be 3-5 months since the date of the charge. One would hope that cards would at least consider the date of the cancellation notice as when the clock starts, but I wouldn’t count on it.

        1. At least with my chase card, it says that its the date of service, or the date the service was to take place. So if its canceled, I am still covered.

          1. that’s good to know. I confess I don’t read all the terms most of the time and just assume the worst (maybe too much reading of bad corporate behavior here?) I have only ever disputed one item and my CC was great in that case.

  4. In this day and age of instant electronic transactions there is no excuse for refunds to take 4-6 weeks just because the airlines list it in T&C doesn’t make it right. Consider you paid for your ticket in May yet your flight is in August. The airline has “free” use of your money for 4 months. Then to get your money back they want another month and a half. As usual the T&C are all one sided!

    1. One of the key reasons that a credit card refund can take 4 – 6 weeks has nothing to do with the merchant. There are a number of steps involved in the refund process. When you initiate a refund, as when you return merchandise to a store, the seller requests a refund by beginning a new transaction request on the credit card network. The card company must receive this information, check it against your purchase history, confirm the merchant’s request, clear the refund with its bank and transfer the credit to your account. The credit card’s billing department must then issue a statement that shows the refund as a credit, which serves as the final step in the process. Each step is an opportunity for delays due to human or computer error, or due to waiting for a billing cycle to elapse.

      The first 24 to 48 hours of this period involve the initial refund with the credit card company. But credit card companies use major banks to supply the funds they lend to cardholders to make purchases, which means that the credit card’s policies as well as the bank’s policies can delay the refund.

      Customer billing cycles also control how long it takes to receive news of a credit card refund. For example, if you have an account that ends on the 29th day of each month, you may receive your card statement on the 5th day of the next month. If you return merchandise on the 30th, it will be the first transaction on your statement for the next billing cycle. In other words, five days after making the return you’ll receive a statement that will not list the refund, though it will list the initial purchase. Your refund will appear on your next statement, which you’ll receive 35 days after the date of the return. If you have online account access, you’ll be able to see the refund as soon as it’s processed instead of waiting for the next statement to arrive.

      So although most merchants will process a refund within 7 days, processing times between the merchant and the creditor can take a while. Unless the merchant is simply delaying the process on their end, they do not have use of pending refund monies during this processing period.

      1. Credit card companies, Visa and Master Card, don’t lend money, are not who the cardholder pays, and are nothing but the network over which the transactions flow (they also set rules as to what a credit card should look like, how the transaction requests should be formatted before transmitting over the network and so on). The bank that issues the card to the customer handles all of the authorizing of the initial transaction and the refund. Any delays in this part of the process are solely the responsibility of the bank that issued the card. But the network rules mandate that the bank must respond to all transactions including refunds and returns with the same speed. There is no manual research by the bank once the merchant initiates the refund request. . AmEx and Discover are different only in that they are both the network and the bank.

        With the internet, most customers have access to their account information at the card issuing bank if they choose to look at it. So while it may be a couple of printed statements before all parts of a refund show up, looking online will show the cardholder exactly when the refund is posted to the account eliminating the wait for the statement.

        So if anyone expecting a refund for a transaction does not see it immediately, it is the merchant dragging their feet and delaying the posting of the request. And with the hold back accounts most merchants are required to keep funded for just these types of situations, yes the merchants are receiving use of the funds as is means they don’t have to leave that amount in the bank account.

        1. I’m wondering if you can explain something, as I only deal with the client side of these systems. I often do tests on my own credit card, and when I charge my card and poll the transaction, I see the authorization instantly on-line on my banks website. Then the charge typically occurs within 24 hours. When I refund the transaction and poll immediately, I don’t see anything under temporary authorizations with my bank, and it often takes 3 to 5 days (Different each time, even with the same merchant account and same credit card), before the credit shows up on-line. I’ve just always figured somewhere between the merchant account/bank and my credit card/bank, the refund process took longer because in theses cases, I did process the refund right away. What would cause the delay for the refund, but not for the charge?

          1. There isn’t — refunds can be processed and appear just as instantly. It’s the airlines who are delaying their part artificially, and blaming it on “billing cycles” and other misinformation.

          2. But that hasn’t been the case. I have implemented point of sale systems and web based purchasing systems for over 10 years now. Every single time when I have processed a charge it has been instant, and when I have processed a refund it has taken 3-5 days. The merchant processors have always said this is due to additional fund checks on refunds. You and mark say it should appear instantly, but that has not been the case and I have done this’s hundreds of times on many cards.

      2. Parts of this can explain why it takes time for the refund to appear on a
        printed statement, sure, but there’s absolutely no reason that a refund
        can’t be processed to the card immediately — when I return something
        at Home Depot, I can go home and see the “pending” refund immediately.

        trying to hide their internal delays before issuing the refund by
        talking about “billing cycles” and such are just being dishonest.
        Refund the money now and I’ll take care of verifying it with my credit card

        1. Some airlines take a while to process charges. When I buy a ticket on American Airlines, it takes about 4 hours before even the authorization hits my credit card (beyond the $1.00) verification.

    2. Hmmm… if you don’t want the airline to have “free” use of your money for 4 months, then why don’t you simply buy a ticket on the day of your flight? 🙂
      You’ll learn that there is a value to buying early. Therefore, nothing is really free.

  5. I’m lost in this story… It sounds like the OP got two credits for $371. A provisional credit from his CC and the refund from AA. It then sounds like awhile later, like after his dispute had worked through the system and AA showed his bank they had already refunded him, his bank basically removed the provisional credit. He still had his refund from AA.

    If that’s the case, what exactly is he complaining about? This really is a “there’s nothing to see here case.” In fact, it sounds like the OP used Chris to scam AA out of another $371.

    1. Not likely. The provision credit was probably reversed once AA refunded the money. A scam? please…. Doubt if AA would have refunded the money as it did if it truly didn’t owe anything.

      1. Do you really think that AA wouldn’t pay $371 to make a member of the media happy even if it wasn’t justified?

        He should have received one credit but got two. One was then reversed (the charge at later date) leaving him whole. He then got Chris to get AA to give him another $371 so he’s been refunded for the trip twice … not once. Yes. I would call using a member of the media to unjustly enrich yourself as a scam…

        1. Being that we routinely see businesses decline to pay amounts they rightfully owe, then, yes, I really think AA would probably have said “no, you were already refunded” if that was indeed the case.

          Plus, you are assuming that Chris and his team are rubes not capable of discerning that the OP had already been refunded despite likely having considerably more facts than made it into the article. Meanwhile, with less information than they had, you’re confident in calling the OP a scammer.

          1. Joe … How many times has a business refunded a non-refundable whatever because Chris is involved? It probably cost them a lot less money to issue the refund and make him go away.

        2. How do you know the provisional credit wasn’t reversed. That is what happens when a dispute is settled.

          Usually it works like this.
          1) Purchase
          2) Dispute – provisional credit
          3) Merchant issues credit
          4) Provisional Credit reversed
          5) All is good

          but his goes on.

          6) Second charge my merchant.

          So, no, don’t think he was whole, or being “unjustly enriched”

          1. Re read the article… 6 doesn’t exist. What he says is “All was well until a few months later, when another $371 charge was placed on my account.” There’s nothing else to indicate that the provisional credit was ever reversed. In fact, I read this as just that. The provisional credit was reversed and showed up as a charge on his account (which is how it would show up)

          2. Number 6 = “All was well until a few months later, when another $371 charge was placed on my account”

            Just because it doesn’t explicitly state that the provisional credit was reversed, doesn’t mean that it wasn’t. That, by definition, is the nature of “provisional”.

            So what YOU are saying is that #4 doesn’t exist. But nowhere does it say that the provisional credit was made permanent.

          3. Here is the exact situation described by the OP, and how it actually appears on a credit card statement.

            Line one is the initial charge.
            Line two is the dispute.
            Line three is the merchant returning the initial charge.
            Line four is the dispute being canceled.

            The credit card company inserts the word “REBILL” in front of the cancellation of the conditional credit followed by the merchant name. You can see lines 1, 2, and 4, all reference the original charge based on the transaction date. Line 3 is a new credit transaction with a new transaction date.

          4. Well, unless we see this guy’s statements, we as readers don’t know 100% as to what exactly happened. I would hope at least Chris as some documentation supporting the OP’s positions before contacting AA. I can’t imagine he would do anything without documentaiton….

          5. Yup, it is all accounted for (per his own words).

            (1) Russell buys ticket

            (2) I disputed the charge on my American Airlines-branded credit card.
            My credit card offered a provisional credit,

            (3) and the next day American issued a second $371 credit.

            (4) All was well until a few months later, when another $371 charge was placed on my account.

        3. I could not agree more. When I used to work in A/R, people pulled this ALL THE TIME! We would refund them (immediately, so they got the credit in a few days), and they would still dispute the original charge. After providing proof of the refund, we would win the dispute, and the customer would get the conditional credit reversed and would be charged interest on it for the time in which it was in dispute. They would then come after me for the refund and interest, just like this OP. No matter what I did or said, they just didn’t get it. They truly believed I re-charged them, and owed them the money and interest, there was no reasoning with them. One guy even sued my company. After we won in court, he still kept bad mouthing us saying we scammed him. Unlike AA, I never once gave in. This case hits very close to home, and sadly, I had to deal with this exact situation 20 or so times a year.

          1. So perhaps you are biased in this situation, assuming guilt without fully knowing the situation? You seem to presume he (the OP) is a liar, I presume he is telling the truth, until proven otheriwise.

          2. No … there is a big difference between uninformed / mistaken and liar. Neither I nor @emanon256:disqus ever claimed that the OP was a liar just that he received money his wasn’t entitled to by his own account. Both of us, understanding how the CC payment system work, didn’t assume anything and took the OP’s account directly.

          3. John summed it up well. We didn’t assume guilt or call the OP a liar. We just both believe the OP is mistaken, and has now received more money then he was entitled to. In fact, had the OP called the credit card company after AA refunded the money in order to cancel the dispute (the day after he opened the dispute), he wouldn’t have accrued the interest charges either.

  6. $371 original charge – $371 CC provisional credit – $371 AA credit + $371 AA charge = $0.

    End of story, unless I’m reading it wrong.

    And I just have to mention, for the record: “For someone like me, who is nearly 67 years old, with a pacemaker, heart and liver disease, and arthritis,

    The guy’s got a straight flush in the Deck of Misfortune.

      1. Sorry – Deck of Misfortune was something of a meme started a while back on the Elliott site.

        People would write to him with their cases, and when the actual case itself didn’t seem to have enough merit, they would throw in physical ailments, financial problems, and other various misfortunes in order to pad the plea. It was similar to playing cards out of a deck.

        So now, when people throw in unrelated extraneous information hoping to – I don’t know, garner sympathy or distract from the actual case? – some of us call it out as “playing cards from the Deck if Misfortune.”

        At any rate, I agree and can only hope that I’m traveling at 67 as well!

  7. Airlines traditionally state that “It may take up to 2 billing cycles until you see your refund”. It would have easily happened as flights are cancelled every day and refunds are initiated every day. But you must be patient.

  8. Ironically, in the Paper Ticket era, once they took hold of your Unused Coupons, they issued immediately the credit card Credit Receipts. If it was paid by Cash, a check will be promptly issue or Cash if the amount is small. Nowadays, if they are able to take your money in a matter of seconds, they should refund it in a matter of minutes not weeks. I call it 8-Weeks-Free-Interest-Capital in accountant term instead of Hostage Money.

  9. I recently flew round trip from Ohio to Utah and back. Delta cancelled my connecting flight home due to either weather or Air Traffic control conditions (conflicting answers at airport and on phone, but whatever) and “for my convenience” rescheduled me on a flight leaving at 1am gettting to Ohio at 10am. Since this was 9 hours after my original flight was supposed to leave and wayyyy after I should have gotten home, I asked for, and received a refund of my return ticket (half my total fare) and bought another ticket on AA. I was told “it could take up to 2 billing cycles for the credit to appear” on my AmEx. I was amazed when the refund was in my account the next day. I hadn’t flown Delta in a long time, but I was very pleasantly surprised! This is how an airline refund should work. A few keystrokes and voila. You’re taken care of.

    1. ” … on your printed statement” is the part they left off.

      Yes, these days most credits are practically instant and if you look online you will see them as soon as they appear. I have similar timing with UA, Frontier and Southwest on refunds.

  10. I wish I could vote by airline. Most airlines have refunded me within a few days, except Frontier. Sometimes they have refunded in a few days, other items its taken a few months and multiple phone calls.

    In the OPs case, it sounds like he got refunded twice, and then re-charged. So he now got extra money out of the deal plus a voucher. If AA refunded him the day after he opened a dispute, it had nothing to do with the dispute, the refund was processed before he opened the dispute, and it generally takes a month before the merchant gets the dispute paperwork after its opened.

    Why does this make his loss worse than anyone else’s:
    For someone like me, who is nearly 67 years old, with a pacemaker, heart
    and liver disease, and arthritis, this $371 loss is a nightmare.

  11. OK, so if the last $371 was supposed to cancel out the second credit, then why was he charged $6 in interest when he didn’t pay it?

  12. Poorly written article, I’m not going to read it twice or thrice to understand the problem. It’s a given that an airline charges you instantly and you wait weeks for a credit. Not sure how they get away with that, but that’s how it goes.

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