Why an Airline Voucher Is Sometimes Better than a Cash Refund
Over the past couple of months, many of us have learned about the ins and out of canceling flights. Phrases like cancel-for-any-reason insurance and airline voucher are now part of every traveler’s vernacular, and we’ve all found inventive ways to reach airline customer service representatives.
It’s also become second nature to demand that cash refund when canceling flights—and to firmly say no to the travel vouchers most airlines are offering. But should you ever consider taking that airline voucher over cash? Some experts say yes, but warn there are things to keep in mind when you do. Below, we walk you through the nuances of vouchers—the good, the bad, and the potentially negotiable—so you can make the best move next time you cancel a flight.
The case for getting your refund in cash
There are some obvious reasons to take cash over a voucher. Most of us like our money where we can see it, and it’s hard to justify letting an airline hang onto your money—especially when it looks like we won’t be flying any time soon. “From a high level, cash is better than a voucher because you can’t pay for groceries with an American Airlines gift card,” says Scott Keyes of Scott’s Cheap Flights. “If you had a $500 ticket, and they’re offering a $500 cash or voucher, cash is way superior because it’s fluid, and it doesn’t have an expiration date.”
Jesse Neugarten of Dollar Flight Club is team voucher, but he agrees there are certain situations in which to push for your money back. “If you’re low on cash and don’t plan to travel anytime in 2020 or 2021, more cash on hand may be the best bet for you,” says Neugarten. “Plus, some airlines, like Virgin Australia and smaller carriers, are shutting down, and they may not be able to honor vouchers in the future.” If you bought a ticket from an online travel agent like Expedia, Travelocity, or Orbitz, then you absolutely want your cash back as well, Neugarten says, and not a gift card or voucher you have no reason to use.
If you end up needing to cancel and rebook a second time, travel vouchers can cause issues with insurance, too. “If you’re buying travel insurance, we’ve been telling people not to take the voucher and to get a refund,” says Megan Moncrief, the chief marketing officer at insurance comparison website Squaremouth. “Historically, travel insurance providers widely grouped travel vouchers with points and miles, as award-based travel, which is typically uninsurable as there is no direct dollar amount associated with [the vouchers].” In laymen’s terms: If you book a flight with a voucher and have to cancel, your flight cost in an insurance claim would technically be zero, meaning you wouldn’t get any of that money back. Moncrief says that some providers are now changing their stance given the current situation, but it’s important to keep this in mind when purchasing travel insurance—something most of us are doing these days—and make sure to understand the coverage offered on award-based trips.
The case for taking the travel voucher
All that being said, there are times when it makes more sense to take a voucher—namely, when the airline is willing to offer you a credit of a higher value. “What the smart airlines are doing is offering an incentive to take the voucher,” says Keyes. “They might say you can take a $500 cash refund or a $600 travel credit [for your $500 flight], and that’s when it starts getting interesting.”
Neugarten says his Dollar Flight Club customers have reported the same. “American Airlines and Delta have been offering 10 to 20 percent bonus vouchers to those who elect to keep a credit with the airline, rather than take a refund,” says Neugarten. “These airlines are not advertising that yet, but they are offering this over the phone to select customers on a case-by-case basis, or to those who ask for it.” Few airlines, like Qatar Airways and Finnair, have formalized such offers, telling customers that all vouchers will receive 10 percent increases from the original flight prices.
“I think this poses a great opportunity for travelers to get additional value from their ticket by simply and persistently asking airline agents for these bonus vouchers,” adds Neugarten. “Though these bonus vouchers have been offered at random, some people have simply asked for them.” And if you’re wondering how to do the dance? Neugarten says they’ve found a script that has worked. They make sure to thank the agent, mention they’ve heard of other people taking these vouchers, and use these golden words: “I would prefer to keep my ticket if you would be willing to give me a bonus voucher. Does [insert airline name] have the ability to offer this? If not, I’d happily take the refund.” Given that airlines are legally required to offer cash refunds for canceled flights, it’s well-worth asking—you’ll either walk away with the cash you’re owed, or a higher value voucher.
“Passengers are in much more of a position of strength than they normally are,” says Keyes. “I haven’t heard of a passenger successfully negotiating a higher voucher, but it wouldn’t shock me if some airlines are in a position to do that. They need cash: They have so few incoming bookings and so many cancellations, so anytime they can hang on to a passenger’s money because that passenger agreed to take a credit instead of a refund, it’s worth trying.”
Whenever you take a voucher, read the fine print
If we’ve learned anything during our coronavirus cancellations, it’s to always, always read the fine print. And even when the voucher pot is, as Keyes says, being sweetened, make sure you understand the restrictions of a voucher before pouncing on it. “I’d look at two things,” says Keyes. “The deadline or expiration date can be problematic for a lot of them.” If a voucher expires, say, at the end of the year, it leads to a bigger question: Do you anticipate traveling by then? Is it even possible for you to use this credit?
“Secondly, who can use the voucher?” says Keyes. “Usually you can use [a voucher] to buy a ticket for anyone—a kid, a spouse, whomever—but sometimes the voucher is only eligible for the person who received it. That’s another instance when a voucher becomes level valuable than cash.” Keyes also suggests considering the airline offering the voucher, how frequently you fly it, and if the voucher works on partner airlines.
Vouchers are always better than miles
Last but not least, Keyes cautions that you should understand what type of travel credit you’re getting—and be wary of accepting miles or points instead of a typical voucher. “There’s a difference between a voucher and frequent flier miles,” says Keyes. Some airlines, he warns, have been sending customers tempting deals to accept miles as refunds, or to convert vouchers into miles. But miles are even less tangible than vouchers and harder to use to your advantage. “When you purchase a flight with a voucher, it’s like purchasing with cash: You get the same status, and importantly, you earn miles,” says Keyes. The same can’t be said for flights purchased with miles. The only real benefit to miles as a form of refund, for the average traveler, is that they sometimes have a further out expiration date, but at that point, you’re probably safest asking for your money back.
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