Canceled flight? DOT’s automatic cash refund rules explained

(NewsNation) — It may be easier for airline passengers to get refunds for canceled and delayed flights under a new federal rule, the Biden administration announced Wednesday.

The U.S. Department of Transportation (DOT) issued a final rule that requires airlines to provide passengers with automatic and prompt cash refunds when they’re owed.

Previously, airlines were allowed to set their standards for what kind of flight changes were eligible for a refund. That resulted in refund policies that varied by airline and made it difficult for passengers to advocate for themselves, according to a news release the DOT issued Wednesday.

Who’s eligible for a refund?

Under the new rule, passengers can receive a refund if their flight is canceled or significantly delayed, they experience a significant delay in a mishandled baggage return, or the airline fails to provide extra services such as Wi-Fi or seat selection if the passenger paid for those services.

Examples of significant changes include departure or arrival times that are altered more than three hours domestically and six hours internationally, according to the release. People who experience a class downgrade or must make more connections than originally planned may also be eligible for a refund.

Passengers who file a mishandled baggage report may also receive a refund of their checked baggage fee if the airline doesn’t deliver the luggage within 12 hours of their domestic flight arriving at the gate or 15-30 hours for an international flight.

Airlines also must provide travel credit or vouchers if a government restricts a person’s travel or a medical professional advises them not to fly because of a serious communicable disease.

How will airlines issue refunds?

The new rule requires airlines to issue refunds automatically and promptly, meaning within seven business days of refunds becoming due for credit card purchases and 20 calendar days for other payment methods.

They also must be issued in full and delivered in cash or the original form of payment. A full refund includes the ticket purchase price, minus the value of any portion of transportation already used. Refunds must include all government-imposed taxes and fees and airline-imposed fees.

When do the new rules take effect?

The new rules will take effect throughout the next two years as part of a broad administration attack on what President Joe Biden calls “junk fees,” the Associated Press reported.

Transportation Secretary Pete Buttigieg said his department will let officials in 15 states help enforce federal airline consumer protection laws.