Mark Pestronk
Q: I know that if I buy an airline ticket on a carrier's website, there is a DOT rule that gives me the right to a full refund if I cancel within 24 hours. Does this rule require agencies to do the same? I also know that when our travel agency issues an airline ticket and charges a client's credit card, we can void the ticket up to midnight on the next business day. Does either rule mean that the client can insist on a refund if he cancels before the deadline? Are the two rules somehow related?
A: The two rules, which are unrelated, are sometimes confused. Neither of them imposes a legal duty on agencies to do anything.
The DOT rule, which was adopted in 2011, applies only to carriers. The regulation is found at 14 CFR 259.5, which requires "covered carriers" to adopt "Customer Service Plans." A covered carrier is "a certificated carrier, a commuter carrier or a foreign air carrier operating to, from or within the United States, conducting scheduled passenger service or public charter service with at least one aircraft having a designed seating capacity of 30 or more seats."
Under 259.5(b)(4), "each Customer Service Plan shall ... comply with the minimum standards set forth: ... Allowing reservations to be held at the quoted fare without payment, or canceled without penalty, for at least 24 hours after the reservation is made if the reservation is made one week or more prior to a flight's departure."
The DOT has no equivalent rule for travel agencies. So, in the absence of a contract with the client providing for a refund, the client cannot legally insist on one.
Any covered carrier can require that agencies follow the refund portion of the DOT rule, but none has done so, to my knowledge. For example, the 6,200-word American Airlines supplement to the ARC agency agreement does not even mention the 24-hour rule.
The ARC rule, which antedates the DOT rule by many years, is that, "the GDS void action must be performed in the GDS by 11:59 p.m. local time one business day following the date of issue. If a transaction is issued on a Friday, Saturday or Sunday, it must be voided in the GDS by 11:59 p.m. local time on Monday."
This rule gives agencies a right -- but not an obligation -- to void a sale within the time limit. Of course, you can comply with the client's wishes as a matter of good customer relations if you want to.
Many travel agencies, especially those that sell online and those that specialize in very high-end travel arrangements, have no-refund rules as part of their terms and conditions.
If your agency wants to adopt a similar rule, you are free to do so, but you should bring your rule to the client's attention in a prominent manner, as the client may know of the DOT rule and erroneously believe you must follow it.