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At 5:28 pm on Friday, Jan 28 I paid US$298.60 for a flight (business class) from San Diego to Los Angeles via Expedia. At 8:53 pm that same day I got an email - United had cancelled the flight. That's less than 24 hours after my purchase. I now have US$253.60 in credit on Expedia that expires on Jan 9, 2023. That's US$45 less than what I paid.

As I understand it, if I had cancelled the flight within 24 hours I would be getting a full refund to my credit card. As I understand it this isn't an Expedia policy, but a US Department of Transportation policy.

Maybe that policy doesn't apply when they cancel the flight, but either way I intend to fight this. I do not want expiring credit in lieu of a full refund. If they want to give me credit and a full refund, that's fine, but I won't accept just credit.

The charge is still pending on my credit card, so there is a possibility it won't go through but I have no way of knowing that. If it does go through I figure I'll talk to a United representative over the phone or via their online chat. Or maybe an Expedia representative would be better?

I'm prepared to dispute the charge on my credit card. If the credit card issuer refuses to rule in my favor I'm prepared to cancel the credit card.

I guess ultimately what I'm wondering is... what's the most effective way to deal with this?

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    You say "I now have $253.60 in credit on Expedia that expires on Jan 9, 2023." Why haven't you contacted Expedia yet? Jan 31 at 10:26
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    Just a note on your statement "If the credit card issuer refuses to rule in my favor I'm prepared to cancel the credit card" - cancelling the card won't relieve you of the debt obligation from any unpaid balance on the account.
    – brhans
    Jan 31 at 16:10
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    @brhans - I'm aware of that but if the credit card issuer won't rule in my favor over a black and white case then one has to wonder what it would take for them to rule in my favor. Like I want a credit card that has my back and if they don't then they won't earn any profit from me henceforth. Compared to the money they make from all their customers, combined, it's a pittance, but it's the least I can do.
    – neubert
    Jan 31 at 16:36
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    @Acccumulation - if it's not the issuers decision then who's decision is it? My own company charges CC's and when customers dispute the charge it's not our decision that matters - it's the issuers decision that stands. An issue we often have is... the customer requests a refund and we'll grand it but, simultaneously, they'll dispute the charge on their CC without telling us. So we eat the charge twice if the issuer doesn't decide in our favor. So either my company the exception rather than the norm, my accounting department is staffed by a bunch of idiots or else your analysis is incorrect..
    – neubert
    Jan 31 at 17:46
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    It's the network's decision. If a customer submits a chargeback for your company's charge, you can submit a representment to the network, the issuer can choose to reject the representment, at which point you can appeal to the network. If the network rules against the issuer, the issuer has to pay your company back; it's up to them whether to pay back from their own money or bill the cardholder. Jan 31 at 17:52

2 Answers 2

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Reluctant as I am to edit an answer after it's been upvoted, some parts of this were not entirely correct and I've changed them. If you voted this up and now don't want to, feel free to retract your vote.

Dealing with an airline.

If an airline cancels a flight they have to give you a full refund. That's not just airline law, it's basic contract law. If you buy something, and the person you are buying from doesn't give it to you, they have to give you money back.

However airlines love to pretend that they don't have to do this. They send you a message saying that you have been given credit, and do their best to sound like that's the normal, or even the only, way it should work. They don't explicitly say you can't have the refund, they just try to steer you down the path of airline credit.

The way to handle this is to call them up and tell them that you want a full refund. Make it clear that you won't take anything else. Tell them you know you are legally entitled to one. They are unlikely to tell you outright that you can't have one (because that would be a lie and leave them open to a lawsuit) but they will try to persuade you to not take it.

You would also be entirely justified in getting the charge reversed on your credit card.

Dealing with Expedia

This question on the Law stack exchange talks about Expedia's US contract with its customers, which is both complicated and unclear, in the sense that it is both vague and hard to find. The contract fails to mention things like "Expedia credit", for example.

The contract states that you are paying Expedia some money (probably $45 in your case) to make a booking with the airline using the rest of the money you sent them. Since they made the booking you are probably not getting it back whatever happens. When the cancellation happens, the airline sends the refund money to Expedia, who sent it to them. The question is what should then happen to it. Contract law, and the Expedia contract, are vague on the matter.

On the face of it Expedia should refund the money to you. However Expedia - like the airlines - really, really wants to keep your money. They have very similar tactics in preferring to simply tell you that this is what has happened (they keep your money and give you 'credit') in the hope that you won't challenge this. Unfortunately it's much less clear that Expedia must refund your money if asked than that the airline must.

Having said that, experience seems to be that Expedia is not ready to push that point legally. There are plenty of stories of people who called Expedia and explicitly demanded their money back, and got it. Expedia probably isn't sure of its own legal ground and doesn't want to put it to the test, in case they are ordered to offer everybody a refund by default.

Calling Expedia and demanding a refund would seem to be the way to go. Some people also report success in getting credit card chargebacks, especially if that fails.

If I may editorialize a bit, all of the above would indicate to me that it is almost never worth actually booking through Expedia. Use them to find flights, but the flights are almost always available direct from the airline at a similar price, and can be booked directly without all the contract and refund hassle.

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    The problem here is Expedia not United. Expedia there own set of rules and the DOT regulations do not specifically cover the case of an third party booker. Expedia has unfortunately has a reputation for dragging their feet, but often can be persuaded on the phone. Lesson learned: book with the airline whenever possible
    – Hilmar
    Jan 30 at 21:00
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    @Hilmar we are not dealing with DOT rules here. We are dealing with basic contract law. The contract has been cancelled by the seller (whether they outsource it to the airline or not is not the customer’s problem), a full refund is owed, no ifs not buts.
    – jcaron
    Jan 30 at 21:43
  • Comments are not for extended discussion; this conversation has been moved to chat. The full string is in that chatroom, I just kept the two most upvoted comments here.
    – Willeke
    Feb 2 at 19:36
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What should happen here is that, once you ask the airline for a refund, they will refund Expedia, and then Expedia should refund you. That may happen automatically once you call the airline.

One thing you do not want to do is dispute the charge, unless you've tried everything else first. Expedia will probably refuse to do business with you after that, and it will actually make it harder to resolve the issue - particularly since Expedia may win the dispute (not saying they should, but I've seen that happen many times - they show you initiated the card transaction, the bank says "okay, we agree with you" and you're out of luck.)

See this article (if it bothers you about your ad blocker, reader mode works on this site) for example. Someone had the same thing happen as you, and what messed things up for them was the dispute: once they disputed it, Expedia could not refund them to the card because it was marked as a disputed charge.

This one is a little complicated. An Expedia representative initially told you that it didn’t have your money but that the airline had approved a refund. But when I asked Expedia about your case, it appears the airline only approved a flight credit, which was issued to you. Then, a few months later, the airline approved the refund request and processed the refund.

Expedia suggested that you check with your credit card. But the money wasn’t there.

So what happened? Well, it turns out that when you asked your credit card about the refund, it initiated a dispute of the charges. So when the airline tried to return the money, it found that the original purchase had been disputed. That gummed up the works on your refund.

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    "Expedia could not refund them to the card because it was marked as a disputed charge." That's nonsense, probably from Expedia. It is completely normal for refunds to be issued during dispute periods (on American credit cards at least, I'm not sure about elsewhere.) I've had it happen myself multiple times. Nothing whatsoever prevents the refund from going through and the issuance of the refund will typically automatically mark the dispute as resolved. Indeed, I've had a vendor or two that suddenly seemed to accelerate the issuance of a refund when a dispute was filed.
    – reirab
    Feb 1 at 17:06
  • @reirab Not sure on that side as I’ve not disputed much in the past, just relaying what the linked post indicated (which was, at least, someone who regularly assisted consumers with disputes like this). Perhaps it is Expedia’s policy?
    – Joe
    Feb 1 at 17:07
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    Yeah, that wouldn't surprise me if it was some Expedia policy (though it would be kind of a stupid policy.) It's certainly not a limitation of the card issuer or the dispute process, though. I would note that it is important to make sure you do file a dispute if you think you may need to do so and you are nearing the time limit. I would still try to work it out with the vendor (i.e. Expedia) first, but definitely file the dispute before paying your CC statement on which the charge appears if it hasn't been handled before then. Otherwise, it may be too late to dispute.
    – reirab
    Feb 1 at 17:10
  • If there was actually a problem processing the refund due to the dispute, it would not surprise me if it was a technical issue rather than policy. A little missing validation here, some poor support for concurrency there. Some call center rep and and their supervisor both go to add comments to the record at the same time and oops you get into a broken state. One off problem, could not repeat it if you tried, but still broken. Then when the perfectly normal refund process gets kicked off, the happy path code doesn't know what to do with it...
    – Mr.Mindor
    Feb 2 at 23:05
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    This is nonsense. " once you ask the airline for a refund, they will refund Expedia, " absolutely not, the airline will basically refuse to talk to you since you didn't book with them. The airline signed a contract with Expedia to transport you. You have zero legal standing here so the airline won't talk to you, it can't.
    – chx
    Feb 3 at 2:19

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