New airline refund rule could get you money back for delayed flights: What to know

Airline customer satisfaction is at an all-time high, and with new airline regulations from the Department of Transportation, frequent flyers are going to be on cloud nine.

The DOT has issued a new rule to help air travel passengers get back money that an airline owes them when flights don't go according to plan, whether it's significant departure delays or just failing to provide the WiFi for which a customer paid. An Upgraded Points study estimates the new rule to drum up $71 million in refunds at Detroit Metro Airport (DTW) alone, and up to $5 billion in refunds nationwide.

While there are different implementation periods for airlines to adjust to the new regulations, they have until Oct. 28, 2024, to execute the changes.

Here's everything you'll want to know about the new regulations.

What is the new airline refund rule?

The Department of Transportation's new rule requires airlines to provide customers with automatic cash refunds promptly after an airline cancels or significantly changes a customer's flight, significantly delay their checked bag return or fail to provide them with any extra services they purchased.

Before the new rule, airlines were allowed to set their own standards for what flight changes warranted refunds, resulting in refund policies that differed between airlines and passengers that were unaware of their refund rights. According to the DOT, they even received complaints of some airlines revising their refund policies to be less consumer-friendly during spikes in flight cancellations and changes.

Flight delayed for hours? How to figure out when you get can a refund or rebooked.

The new rule explicitly defines the circumstances in which airlines must give a refund, so that customers are no longer left in the dark on their refund rights and guarantees that refunds are not returned as travel vouchers or credits. Additionally, airlines are required to notify customers of their right to a refund of the ticket and extra service fees promptly after a flight has been cancelled or significantly delayed.

More: New DTW loyalty program offers cash back, miles for airport spending

What does the new rule cover?

The DOT lists that, under the new rule, passengers are entitled to a refund for:

• Canceled or significantly changed flights: Passengers will be entitled to a refund if their flight is canceled or significantly changed. For the first time, the rule defines “significant change.” Significant changes to a flight include departure or arrival times that are more than 3 hours domestically and 6 hours internationally; departures or arrivals from a different airport; increases in the number of connections; instances where passengers are downgraded to a lower class of service; or connections at different airports or flights on different planes that are less accessible or accommodating to a person with a disability.

• Significantly delayed baggage return: Passengers who file a mishandled baggage report will be entitled to a refund of their checked bag fee if it is not delivered within 12 hours of their domestic flight arriving at the gate, or 15-30 hours of their international flight arriving at the gate, depending on the length of the flight.

• Extra services not provided: Passengers will be entitled to a refund for the fee they paid for an extra service — such as Wi-Fi, seat selection, or inflight entertainment — if an airline fails to provide this service.

More: Frontier launches nonstop flights to Baltimore, Dallas from DTW

How do you get the refund?

Oftentimes, acquiring a refund was also a hassle before, requiring customers to search through airline websites to figure out how make the request, fill out extra “digital paperwork,” or sometimes wait hours on the phone to talk to a customer service representative ? all for travel vouchers or credits that had the tendency to expire.

Now, the DOT says that airline refunds are required to be:

• Automatic: Airlines must automatically issue refunds without passengers having to explicitly request them or jump through hoops.

• Prompt: Airlines and ticket agents must issue refunds within seven business days of refunds becoming due for credit card purchases and 20 calendar days for other payment methods.

• Cash or original form of payment: Airlines and ticket agents must provide refunds in cash or whatever original payment method the individual used to make the purchase, such as credit card or airline miles. Airlines may not substitute vouchers, travel credits, or other forms of compensation unless the passenger affirmatively chooses to accept alternative compensation.

• Full amount: Airlines and ticket agents must provide full refunds of the ticket purchase price, minus the value of any portion of transportation already used. The refunds must include all government-imposed taxes and fees and airline-imposed fees, regardless of whether the taxes or fees are refundable to airlines.

More: DTW renovates McNamara Terminal restrooms

Are there any downsides to the new airline refund rule?

Upgraded Points says that there may be some backlash from airlines against the new rule, adjusting their operations, pricing strategies, or a combination of both to reduce the financial impact. Airlines for America says that the new rule could reduce competition and ultimately drive up prices for consumers.

What else is there to know about the new airline refund rule?

During the COVID-19 pandemic, the DOT received an elevated number of complaints against airlines and ticket agents for refusing to provide a refund or for delaying processing of refunds. Now, in instances where customers are restricted by a government or advised by a medical professional not to travel to, from, or within the United States due to a serious communicable disease, the rule requires that airlines must provide travel credits or vouchers that are transferrable and valid for at least five years from the date of issuance. Note that airlines may require customers to provide documentary evidence to support their request.

You can access the full rule here.

This article originally appeared on Detroit Free Press: Delayed flight? Airlines must give cash refund under new DOT rule