Julia Zajac’s Expedia refund misadventure was supposed to start with a flight from Colorado Springs, Colo., to Sydney — a grueling 20-hour trek with stops in Denver and San Francisco. But before she could get off the ground, United Airlines canceled the first leg of her trip, dooming her entire vacation.
“They couldn’t rebook me for several days,” she says. “I ended up canceling.”
That happens from time to time. But this doesn’t: Zajac, who had booked her vacation through Expedia, now has an expiring flight credit on an airline that doesn’t even serve her airport.
What’s going on here? The answer will take us on our own journey. And it’s one you’re going to want to take, because along the way you’ll discover several key consumer rights that could affect your next trip:
- Can an airline issue a credit instead of a refund for a canceled flight?
- What are the consumer’s rights in case of flight cancellations by airlines?
- Do travel agencies like Expedia have an obligation to refund for canceled flights?
I’ll also take a hard look at the leading cause of airline ticket refunds and explain how you can avoid an ill-fated trip that never gets off the ground. But first, let’s get back to Zajac.
The flight to Sydney that wasn’t meant to be
Zajac had a fairly complicated itinerary from Colorado Springs to Sydney. First, she had a commuter flight from Colorado Springs to Denver. Then the itinerary called for a connection to another domestic flight, to San Francisco. From there, she had a 13-hour transpacific flight to Australia. All told, it was going to be an exhausting day of travel.
Getting to Australia wasn’t cheap. She paid $2,670 to fly roundtrip in July, at the peak of the summer travel season.
But on the day of her big trip, United canceled the commuter flight. She could have still driven to the Denver airport, but then United informed her about a delay to her flight to San Francisco, making a connection to the transpacific flight impossible.
Zajac called Expedia, which promptly offered her a full refund for her flight.
“I canceled the trip after confirming I would get a full $2,670 refund from Expedia,” she says.
But that didn’t happen. Instead, Expedia issued a $2,670 credit on Qantas, the Australian carrier. (Related: Can I get a refund for these airline credits on Expedia?)
Not only is that illegal, it’s also impractical. The closest American city to Zajac that’s served by Qantas is Dallas. Could Zajac get the decision reversed?
“We need the approval of Qantas”
It seems the problem was the transpacific carrier, Qantas. This was borne out in a subsequent online chat with an Expedia agent.
Expedia: I talked to United Airline and they agreed that their flight UA 5235 is canceled but for the refund, we need to take approval with Qantas Airway and I have talk to the Qantas as well and told me that for the waiver code we need to to call to the different department so they can check all the details and provide us a waiver code for the refund. I tried calling that number but they are closed right now.
Zajac: What is the number and when are they open?
Expedia: They will be open during the weekday which is 9 a.m. to 5 p.m.
Looking past the grammar and spelling problems, Expedia is doing something no travel advisor ever should — trying to turn its problem into its customer’s problem.
Zajac paid Expedia. Expedia promised Zajac a full refund. It doesn’t matter if Expedia can get a waiver code from Qantas. It doesn’t matter if Qantas is open or not. And it needs to fix the problem quickly — and without any need for Zajac to get involved.
Can an airline issue a credit instead of a refund for a canceled flight?
Airlines are not allowed to issue a credit instead of a refund for a canceled flight unless you specifically agree to the credit offer. That applies to travel agencies such as Expedia, too. Your rights to a full refund are protected under consumer protection rules, which are remarkably consistent no matter where you are flying, and with which carrier.
Your right to an airline ticket refund under U.S. Department of Transportation rules
The U.S. Department of Transportation (DOT) has established regulations that protect your rights in the event of a flight cancellation. According to DOT rules, passengers are entitled to a full refund for a canceled flight if the flight was scheduled to depart from or arrive in the United States. If your airline or travel agency forces you to accept a ticket credit, you can file a complaint with the DOT, and it will investigate and could help you receive a full refund.
Your right to an airline ticket refund under European Union rules
If you’re traveling on a flight within the European Union (EU) or on flights operated by an EU airline, you have even more extensive rights under EU Regulation EC 261. EC 261 mandates that passengers receive a full refund for canceled flights if the flight was scheduled to depart from an EU airport, or if the flight was operated by an EU airline and was scheduled to arrive at an EU airport. In addition to a refund, you may also be entitled to compensation from the airline if your flight is canceled less than 14 days before departure. The amount of compensation depends on the length of the flight. EU complaints are handled through the member countries’ aviation regulators.
Your rights under Australian consumer protection laws
Australian consumer protection laws, governed by the Australian Consumer Law (ACL), prohibit businesses from engaging in misleading or deceptive conduct. That includes offering a ticket credit instead of a refund for a canceled flight without the passenger’s explicit consent. If an airline offers you a ticket credit instead of a refund, it must clearly disclose the terms of the credit, including the expiration date and any restrictions on its use. Australian consumers who have been offered a ticket credit instead of a refund for a canceled flight can contact the Australian Competition and Consumer Commission (ACCC) for assistance. The ACCC can investigate complaints and take action against airlines that breach the ACL.
This much was clear: Zajac had been given credit when she didn’t ask for it. Her refund problem should never have happened. But how to fix it?
Do travel agencies have an obligation to refund for canceled flights?
Airlines must refund a ticket promptly, which the DOT defines as 7 business days if you paid by credit card, and within 20 days if you paid by cash or check.
But there’s a loophole for travel agencies such as Expedia.
It only has to refund the money if “passenger funds are possessed by a ticket agent.” In other words, Expedia would only be obligated to refund Zajac’s money if the airline refunds the agent. (Here’s what you need to know about travel agents.)
That explains why the agent was talking about waiver codes from Qantas. No waiver code, no refund. And that lets Expedia off the hook.
This is a persistent problem.
- Here’s a case where an online travel agency called SkyLux simply kept a refund from Lufthansa. Our reader disputed her credit card charge and lost — until our advocacy team got involved.
- Sometimes, there’s a third party involved besides the online agency. That’s what happened in this case with SriLankan Airlines.
- Online agencies often just mess things up. This Sun Country problem comes to mind. So unnecessarily complicated!
Bottom line: You are due a prompt airfare refund only if you’re dealing directly with the airline Otherwise, not so much! Airlines and travel agencies know about this loophole, and they exploit it all the time.
What will delay your airline ticket refund?
There’s no question that the leading cause of anairline refund delay is booking with an online travel agency.
Nothing delays a refund more reliably than booking through Expedia or Booking.com. The money must go from the airline to the agency and then back to you. Sometimes, there are additional parties involved in handling the transaction. Each company along the way has processes designed to keep as much money as possible, so they are intentionally slowing down your refund.
But there are other reasons for an airline ticket refund delay:
- A complex itinerary. When you’re dealing with more than one airline, things get very complicated, and airlines can get confused about who should pay the refund.
- Looming bankruptcy. A weakened airline may “pause” refunds to conserve cash. I’ve seen many airlines on the verge of bankruptcy do this.
- Not enough information. If an airline doesn’t have enough information about your refund requests, it can cause a significant delay. (Always provide your full name and ticket number at a bare minimum, so your airline can process your refund request.)
- High volume of requests. After a pandemic, war or 9/11-type event, passengers deluge airlines with refund requests. That causes delays of months, and in some cases, even years.
Of course these are all just excuses. Your airline should have systems in place to handle difficult itineraries or a surge of refund requests.
But what about Zajac? Would Qantas continue to refuse to give Expedia a waiver code? Let’s find out.
Now it’s Expedia’s turn
Our advocacy team couldn’t believe one of our readers had been waiting four months for a refund that should have taken a week. What’s more, we were concerned that Expedia had made this Zajac’s problem, leaving her to negotiate with Qantas instead of owning the problem.
When we reached out to Expedia, it acknowledged the issue and promised to investigate. But three weeks later, Zajac hadn’t received a refund — and my team hadn’t heard a thing. Another delay!
So we asked again. And this time, Expedia responded. A representative told us Expedia had made contact with Qantas and received the necessary code. A refund was imminent.
Finally, almost five months after having her flight canceled and asking for a refund, she received her money.
About this story
Expedia is a frequent subject of our stories, so this case had to set itself apart to make our editorial calendar. And it did. My advocacy team has no idea how someone living in Colorado Springs can use a Qantas ticket credit. But more to the point, this was Expedia’s problem to solve. If you hear an agent tell you to wait for a waiver code, you know what to do. My team will be here. I’m grateful to my brother Dustin Elliott — soon to be Dustin Elliott, MFA — for the illustration. Dwayne Coward and Mel Smith were on deck in the advocacy department and Andy Smith and his team of editors helped me write in the English language today. I’m also very thankful to those of you who participated in our successful holiday fundraiser. Without you, we couldn’t do this.