A Loophole in American’s 24 Hour Cancel Rule That Can Bite You

Last year American switched to offer 24 hour refunds when purchasing travel a week or more in advance and eliminated the commitment to offer 24 hour holds instead.

American’s website will often still give you the option to put an itinerary on hold for 24 hours. Their telephone reservations center will not. American has that web hold will eventually disappear.

American’s 24 hour cancel policy has been less generous than Delta and United who both allow 24 hour refunds regardless of how far in advance you book travel. The Department of Transportation only requires offering 24 holds or refunds for travel purchased a week or more in advance.

Last year American’s policy was to be minimally compliant with DOT standards, the least generous among major US airlines.

In May American loosened its policy to allow 24 hour refunds as long as you purchase 2 days prior to travel instead of requiring 7 day advance purchase. And the courtesy cancel policy was explicitly extended to award tickets.

However there’s a loophole American uses to get out of honoring these refunds in certain cases.

If you use credit from a previous cancelled ticket to pay for your reservation American tells me that they will not honor 24 hour cancel/refunds. They claim that when you pay for a new reservation using the residual from a cancelled ticket (whether partial or full payment) then it “isn’t a new reservation” so DOT rules under 14 CFR 374 don’t apply. Even for cancellations made less than 15 minutes after purchase, and for reservations that were newly created.

American apparently considers this to be a reissue of your old reservation. And I see the certain logic to it. However that doesn’t appear to be the policy on American’s website,

If I cancel my trip within 24 hours of purchase, can I get a full refund?

You have up to 24 hours from the time of ticket purchase for a full refund if you booked at least 2 days prior to departure. You must cancel your trip for a refund.

There’s no caveat about how you pay for your tickets. There’s no caveat about creating a new reservation online and placing it on hold and then calling to apply a previous ticket as payment voiding this policy.

You would think that American’s customers would be able to rely on the statements made on its website. Indeed you’d think they could rely on those statements specifically as it applies to the airline’s adherence to Department of Transportation rules. American does not, however, seem to take that position.

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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  1. Do you know if that is true for UA? I only occasionally use the 24 hour cancellation, and even then I’m probably not using credit from a prior cancellation, but it would be good to know.

  2. That rule is specifically so they can’t screw old people who get the wrong date or Springfield on the reservation, giving them a day to figure out their mistake. What they’re saying is that we can steal thousands of dollars of your money if someone with Alzheimers makes a mistake before their caretaker catches it.

    These guys are Trumpian-low scum. That’s where you reach child molester and are still wondering how much lower they can go.

  3. @Arthur: This is also true for UA.

    I believe it’s a little subtler than this. When a trip is cancelled and the value is later used for a new ticket, the new reservation (at least on UA) gets the same record locator (the six-character alphanumeric confirmation code) as the cancelled reservation. It’s considered a reissue of the old reservation, and the 24-hour policy doesn’t apply. But if the new reservation is less expensive than the old one, you pay the change fee but get a voucher for the fare difference itself, and when you use that voucher, I *think* it’s still considered a new reservation and the 24-hour policy applies.

  4. Southwest has something even more asinine. If you use residual credit from flight A for flight B, then cancel flight B, your residual credit for ALL of flight B (even that paid cash/credit) expires at the original expiration date of the flight A credit. I damn near filed a DOT complaint on that one. Their expectation was that I would see when the credit would expire in the ticketing e-mail and cancel within 24 hours if I had a problem with it–because it would be stupid to take an airline at their word for their advertised policies.

  5. IDK about now, but in March 2015 I used a leftover UA credit to book a res., then cancelled the next day. I did get my refund, but I had to wait several weeks (!) for them to re-issue the credit voucher, while the other portion was promptly refunded to my credit card.

  6. Not sure how the other airlines work, but Delta actually allows more than 24 hours to cancel. In practice, the deadline is 11:59 p.m. the day after booking. So if you book at 1:00 a.m., for example, you have nearly 47 hours to cancel without penalty.

  7. @Greg: You said :”That’s where you reach child molester and are still wondering how much lower they can go.”

    Speaking for all child molesters (and for lounge abusers) on this site, we resent your insinuation we might be rated below politicians and airlines

  8. This even holds true for a voucher granted when volunteering for a flight. The date the credit was granted is the date they use… had a two hour argument with AA to waive the change fee for a change made only 2 hours after original booking.

  9. Jerks refunded my Gift Card purchase with a voucher/— and deducted $99 as a penalty. I was within 24 hours—- how does this travesty count as a “refund”???

  10. @ djibouti

    Been that way with Southwest for many many many years. Nothing new at all. New funds always take on the soonest expiration when combined with old funds. Almost all of us have been hit by this. It is why we all maintain spreadsheets of our funds.

    In the FT WN forum we call it “tainting.”

  11. @Rich: my reading of the post is that the policy applies even when a new PNR (new record with new record locator) is created. In my experience, it’s far more common to apply the residual value of an old ticket to a new PNR than to re-use the old PNR with new flights.

    @Kacee: Everything that is being discussed involves a new ticket. An old PNR is cancelled and the residual value of the old ticket is applied as full or partial payment on a new ticket.

  12. I ran into this on UA once – Reservations was able to make an exception and let me change it without a fee.

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