New DOT Rule Requires Airlines to Give Automatic Refunds

Under a new rule by the Department of Transportation that took effect this week, US airlines are required to give automatic refunds for canceled flights and other significant flight changes. 

This new DOT rule comes ahead of the peak holiday season. This rule allows consumers to get their money back without the paperwork. According to DOT Secretary Pete Buttigieg, automatic refunds incentivize airlines to minimize disruptions. 

He said, “When an airline knows that all — instead of just a few of the passengers on a canceled flight — are likely to actually get their money back, it gives them a different set of reasons to put in the investment, and the realistic scheduling that makes those cancellations less likely to happen to begin with.”

How Do You Get an Automatic Refund?

This new rule made it clear what a “significant change” is. Before this rule, the definition was different depending on the airlines. 

A “significant change” in the customer’s flight schedule is now defined as at least a three-hour delay for domestic, or at least six-hour delay for international flights. On top of that, airlines will also have to issue an automatic refund if the flight’s departure or arrival airport was changed. It also counts as a significant change if a connection was added. 

The DOT’s new rule also covers situations where passengers are either downgraded to a lower class of service or placed on a less accommodating plane, particularly affecting disabled passengers. In both cases, customers are entitled to an unquestioned refund.

In addition, baggage delays are also part of the new rule. Checked bag fees should be refunded to the customer if the checked luggage doesn’t arrive on time. However, the passenger will still need to file a mishandled baggage report.

Customers are entitled to a refund for domestic flights if the luggage is not delivered within 12 hours. On the other hand, 15-30 hours for international flights.

Lastly, for add-ons, airlines will also refund customers  if they paid for WiFi that doesn’t work. The same goes customers who paid for a particular seat but were forced to sit elsewhere. 

Making Refunds Straightforward

DOT’s rule made refunds clear and straightforward. On its website, DOT mentioned that it eliminated “digital paperwork, or at times waiting for hours on the phone.” It added, “In addition, passengers would [previously] receive a travel credit or voucher by default from some airlines instead of getting their money back, so they could not use their refund to rebook on another airline when their flight was changed or canceled without navigating a cumbersome request process.”