Here’s How Lufthansa Is Skirting The Law To Avoid Refunding Tickets For Cancelled Flights

Airlines around the world are cancelling flights. In Europe and the U.S. when an airline cancels your flight, they have to issue you a refund. However I’ve flagged several airlines that are refusing to do this.

Lufthansa, for instance, simply shut off the functionality even though the European Union last week re-iterated the legal requirement to issue a refund to customers whose flights have been cancelled.

How is Lufthansa doing this? Like many airlines they’re now offering extra value to incentivize customers not to seek a refund (“Passenger receives a discount of EUR 50 on the new booking as an incentive to rebook rather than refunding the ticket”). However those who want a refund?

  • Lufthansa will accept a customer’s refund request

  • They just won’t actually issue the refund

Lufthansa says, “Refund is allowed but will not be handled/processed until further notice.”


Copyright: jremes / 123RF Stock Photo

They aren’t refusing to give refunds. They just aren’t processing the refunds. As Jerry Seinfeld might have said, “anyone can take the refund request, but it’s the processing that matters.” The airline can slow walk refunds, it believes, with impunity.

Incidentally they continue to process refunds for refundable tickets (and tickets where refunds are allowed with a penalty). Their ability to process refunds remains intact. They are simply choosing not to process them for non-refundable tickets on cancelled flights.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. AA is doing the same thing. I cancelled my flight more than 10 days ago, but I still haven’t seen any pending credit on my credit card…

  2. AA is definitely doing the same thing. Refund was agreed without resistance, but “processing delays” mean I’m probably never going to see it.

    And to everyone waving the “credit card dispute” flag like it’s some magical solution: it’s not. What companies are fighting for right now is CASH. Not numbers on paper or IOUs, actual liquidity. A CC issuer doing a charge-back is just passing the buck – shifting the risk to them not getting paid back if they credit the consumer up front and then fight with the airline for the money. With what the issuers are facing – probably a wave of delinquent payments unlike anything they’ve ever seen, it’s not likely that the CC company is gonna just jump in front of a bullet for you.

  3. @CW You PAY to use a credit card…both in annual fee, and via the merchant fee paid. Banks also evaluate the reliability and creditworthiness of airlines and the like to decide if they are going to hold back. This is EXACTLY what a credit card dispute is for. Sure, you are making the banks deal with it, but believe me, they have MANY more weapons than you do.

  4. @Joelfreak – I think you’re missing the point, and putting too much faith in the system. Everyone is scrambling for cash. Any creditworthiness analyses went out the window a couple weeks ago. This is about liquidity. Everyone is clinging to their cash, and quoting how things “should” be, per words on a page of some contract, isn’t going to change what companies are doing to try and save their skins. I’m not an apologist – I’ve got several grand on the hook here that I’m expecting to lose – just a realist who understands that everything we ever knew got torn up and thrown away a little while ago.

  5. One question about chargebaacks in this instance (and the thought comes from Ticketmaster’s stance on this, but I wonder if it might/could happen here):

    Ticketmaster’s T&Cs say that, if one files a dispute, they can close your account and disallow new accounts with the same name/CC. And I’ve read stories where they have really done this.

    Might an airline do this as well?

    Cheers.

  6. @JoelFreak – you are wrong. While you may feel you entitled to a credit card refund because you pay the annual fee and use it you simply aren’t. Yes credit card companies will act as your agent in dealing with merchants and they have a lot more leverage than you do. However, they don’t have a pool of money to just pay back card holders for disputes they can’t win. Even if you get a disputed amount posted back it is usually a temporary credit (with restrictions) until the card company and the merchant reach agreement. There are cases there a card was defrauded that companies make up the amount but not for legitimate purchases when there is a dispute with the vendor. Yes these typically get resolved in the card holder’s favor but we aren’t in typical times.

    When the vendor doesn’t have the money to repay the credit card company or argues that the refund is not a valid request the card company won’t immediately credit you. They aren’t going to take a huge lose when they may not get reimbursed. One recent example is Bookit.com who went out of business and had not even paid resorts for “prepaid” vacations so people were being told to pay again to either stay there or to check out. I saw many people say either file a dispute with your credit card for the fee paid Bookit or pay the resort then immediately dispute it. They are unlikely to get anything back under either scenario. First of all Bookit doesn’t have any money and secondly the payment to the resort was for legitimate services (not the resort or credit card company’s issue Bookit never paid them).

    Just letting you know that the old “dispute with your credit card company” is no universal solution. These are tough times and a lot of people, me included, will lose money we prepaid for travel – that is the new reality.

  7. Long before Covid19 emerged, and especially in recent years, when it comes to processing refunds, there’s one industry that stands out as notoriously sleazy, dishonest and incredibly exhausting to deal with:

    *AIRLINES*

    Oh yeah, sure, Lufthansa likely does that too – if my recent experience (for involuntary seat downgrade refund on Jan 20th) with its Austrian Airlines subsidiary, which was truly exhausting, is any indication.

    Heck, seeing as Austrian Airlines didn’t even bother to notify me as the contact of record who booked the itinerary and was monitoring/managing it, or the passengers traveling on the airline of the seat switch, one wonders if the airline would’ve (finally, more than a month after the refund was requested & then only after *WEEKS* of many calls, e-mails, Tweets & DMs, that is) even refunded the fee paid if I hadn’t spotted it while reviewing the PNR before they completed their online check-in 24 hours before departure!

    I tell you it took *WEEKS* of relentless efforts to get that refund processed.

    The process took so long that United offered to cover for its badly behaving code-share partner instead with vouchers!

    Go figure! (Thanks United; that was a very nice gesture that did NOT go unnoticed 🙂 ).

    Now, since United’s actions in this recent example are noteworthy, I’m going to give them the benefit of the doubt when saying the problem of “processing” refunds is hardly limited to Lufthansa or its Austrian Airlines subsidiary; nor is it, in my experience, a result of Covid19 since again and again NOTHING has proven to be as EXHAUSTING as chasing airlines for refunds.

    NOTHING.

    Yowza do they make you run a gauntlet to finally receive what’s owed.

    Hotels for “security deposits” aren’t much better.

    But Delta (sorry, you guys know I love you for many things, but processing refunds to credit cards [NOTE: NOT eCredits] even for the simplest of things that the airline agrees are legitimately owed) has jammed me up a few times since 2017; and don’t even get me started about HOW LONG Delta’s 49% owned Anti-Trust Immunized Alliance partner, Virgin Atlantic, took to refund a $1,000+ overcharge arising from an IT error that everyone at the airline agreed was entirely of the airline’s doing.

    And we all have heard/read about the misery and horror required to pry loose even a penny from American, BA and others in an industry that just LOVES taking flyers’ money every which way, but then works the “let’s exhaust ‘em til they give up trying to get their money refunded when the airline screws up and/or simply owes a refund for a refundable fare – or as Austrian Airlines seemed like it wanted to do for its never voluntarily disclosed, involuntary seat downgrade for a flight this past January!

    If anyone wants to know why so often I use adjectives like “sleazy”, “dishonest”, “deceitful” (etc.) when discussing our airlines, it’s because all too often their actual behaviors as experienced 1st hand, plus many airlines’ overall attitudes that speak to a degree of greed, arrogance and abuse towards their FARE PAYING customers makes those words well deserved – or sometimes even too kind!

    Oh, and the super lame “Excuse-A-Thons” they offer when confronted with their exceptional dragging and stalling of “processing” refunds is shameful, absolutely shameful!

    Ugh!

  8. @brp

    That’s perfectly fine, Ticketmaster wont survive with this atttitude if indeed it is true.

    “The law of our land is the law of the land. Dispute, Chargeback and then small claims or limited civil”

  9. @Chris,

    At the present time I’m inclined to agree. There are likely to be a lot of these if they don’t issue refunds. Of course, the policy stems from normal times where these events are few and far between, and they can afford to lose a few customer.

    In the end, I would expect the chargeback to be in my favor. However, being cut off from TM access would be a big deal given their virtual monopoly, and they know that.

    Again, just wondering if airlines might try something like this as well.

    Cheers.

  10. @AC, that’s not really accurate. CC companies do take the hit often for disputes when they can’t recover the cash. A merchant going bankrupt is in fact one of the valid reasons for a chargeback (if you remember Thomas Cook or Air Berlin fiascos those disputes were all paid out).

    In this case, it’s likely the CC companies have frozen funds from other purchases received for the airlines for the express purpose of funding inevitable disputes.

    It is possible that the avalanche of claims gets so large that the cc company can no longer afford to take the hit, but I think we’re not there yet.

  11. @gary would you know how a round trip would work? I booked a round trip ticket from ORD to Romania through LH for my father in law in January before the virus was widespread. He flew to Europe in February and stayed for a month, but they cancelled the return leg because the restrictions on EU countries were put in place, and he was connecting through Germany. I ended up having to book him on a one way with AA through LHR. Luckily, I was able to get him home before the restrictions were expanded to the U.K. However, in an ideal situation, I’d love for some kind of refund from LH. Would I be entitled to half the cost of the round trip ticket for the leg they cancelled?

  12. As a native German, I have long seen behind the con that LH is pulling. Everywhere around the world, regular people still have an image of LH being a premium airline, and it amazed me every time how anyone can think that. I actively avoid LH, even when it means connecting somewhere instead of a non-stop (as long as I don’t have to connect in CDG). I am seeing LH on the same level as UA, both in terms of customer service and the product they are offering.

  13. Speaking of Lufthansa and their practices, I had three flights booked with them. The first was for early March, the second for July and the third for October. The first was canceled just two days before it was announced that they could no longer fly to/from Malta. I was told by customer service, it would be refunded within ten days. Fifteen days came and went. I contacted by email to them where was my refund. First they said they are backed up. Then when I again asked, they said no refund but a credit, if I booked by 31 May, with travel commencing NLT 31 December.

    I then responded by mentioning tix booked for July and October. How could I possibly use them by 31 December. I countered by saying give me refund for the March flight, and I would take the credits for the second and third flights combined, to use by the end of December (wherever we wanted to go.). Didn’t take long for them to respond by saying OK. Refund within 10 days and notation in my records letting me combine later two sets to anywhere we want.

    A real pain in the ass. OK, so they are hurting. But, if they want to get goodies from governments, stop at least screwing over the customers as well. truth be told, the day of the frequent flyer programs are winding down or going to change dramatically. And smart customers don’t need that aggravation. My life is too busy to play these games day in and day out. It’s back to them earning my loyalty. A getting rarer upgrade or other perks are dwindling. Ticket stock was LH as UA for same flights (within Europe) were way more expensive. But, as a Star Alliance Gold, I really used the hell out of the Senator Lounges. But, I can do without them.

  14. If the airlines want to be able to continue to use credit cards, they will HAVE to accept their terms for a chargeback. If they go bankrupt, and get a bailout, I would almost bet that all customer refunds will be secured. Banks ALSO are getting bailed out…no matter what, your FIRST thing should be chargeback, and then if that fails, go after other avenues later.

  15. I’m waiting a $3K refund from AA. If they just did the Qatar move of $3.3K as a credit, I would take it and be happy.

  16. I believe that EU261 states that airlines must reimburse cancelled flights within 7 days. Not sure how they can get around that.

  17. I was supposed to fly to Switzerland on March 21st, since the booking agent made it impossible to rebook for later I just wanted my money back, Swissair told me there would be no rebook or cancellation fee because of Covid19, my booking agency made it impossible to even try for rebooking or cancel, they disconnect you after you were on hold for over an hour, this was no accident, I have been on the phone day and night since beginning March, finally l was able to fill out a form for refund one day before my original flight which was canceled by the airline 7 days befire already, may be I am dreaming but I still hope for a refund, I was born n raised in Europe and have not been back for 23 years, I am on a fixed income, I have been preparing for this trip for a year, I can’t just loose that money, I worked too hard for it ….
    H

  18. I had a 4 pax tickets with a combination of American, KLM and Lufthansa. American responded to our request almost immediately, given the overloaded claim system and allowed rebooking until Dec 2020 with no fees attavhed and refund of any amounts paid for upgraded seats. KLM responded after 14 days (given the situation I consider still acceptable) and offered vouchers for the expended amount to be used within one year after issuance. Lufthansa does not answer phones and even though their web page talks about Coronavirus rules regarding refunds and rebooking , there is no way to process anything. I was able to cancel 2 LH flights but no responsa as to what are they going to do. After two weeks tried to cancel the other 2 LH flights but the web page does not even allow that and reminds passengers to check status of their flight up to 72 hours before scheduled departure and DO NOT CALL IF YOU ARE NOT TRAVELLING WITHIN THE NEXT 72 HOURS. In conclusion no way to contact LH by any means and it s like they have disappeared from the face of the earth: so much for German efficiency and high quality!!!!!

  19. Some misunderstanding of how card systems work shown above.

    Mastercard and VISA are 4 party systems:
    Cardholder—Card issuing bank—Scheme–Merchant acquiring bank—merchant.

    When the cardholder opens a dispute the issuer should check whether the reason is within scheme rules. If it is it passes the chargeback request onto the Acquirer via the scheme. The acquirer contacts the merchant who can respond to disprove the dispute grounds. If the acquirer declines the chargeback, either because of the merchants reply or for other reasons the issuer can escalate to arbitration at the scheme.

    The acquirer takes liabilty for the merchant. if the merchant cannot/wont pay for a justified chargeback the acquirer is responsible, something which makes acquiring for airlines, owing to their frequent financial problems, a form of Russian roulette.

    The issuer takes responsibility for the cardholder. If the cardholder cannot pay the monthy bill it is solely the problem of the issuer, the merchant has his payment and keeps it.

    Unfortunately in Europe there have been many consumer banks whose employees were badly trained and who claimed that there was no such thing as chargebacks. Visa, after some major bankruptcies in the UK travel industry (2008/2009) where banks were refusing chargebacks, issued at statement saying that chargebacks were something new and not yet known to all bank employees.

    The situation with AMEX is different: here AMEX is both acquirer, issuer and scheme and so is in full risk for both merchant and cardholder.

    Should an Mastercard or VISA acquiring bank become insolvent then the scheme steps in to cover the damage.

    For these reasons all good acquirers carefully monitor the health of their merchants and the schemes that of their acquirers and issuers.

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