Comment by mulmen | Hacker News Reader

Comment by mulmen | Hacker News Reader

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> How about: you must issue cash refunds PERIOD. No voucher nonsense.

From https://www.transportation.gov/briefing-room/biden-harris-ad... (linked in TFA):

The final rule improves the passenger experience by requiring refunds 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.

> Airlines and ticket agents must issue refunds within seven business days of refunds becoming due for credit card purchases

Always blows my mind that companies can take money _instantly_ from my credit card yet require 3-7 business days to refund it.

I know what you're doing you greedy fucks.

This doesn’t change the premise of your argument but to clear up your understanding - no one is able to instantly take payments from your credit card. Your credit card company records the transaction as having taken place long before any money actually moves.

They are far more cautious about giving leeway on the conduct of the consumer than that of the merchant.

3-7 business days gives the merchant’s bank long enough to debit the funds, ensure they exist, then send them back, with a buffer for errors.

Why does that require so many days? Banking is all digital, yet it is still being treated like it's the 1950s.

Well, the good news is that the Fed recently rolled out the first phase of a replacement ACH system (FedNow) that does instant transfers.

The bad news is that it will be decades before most major payment systems move to it.

I haven’t worked in fintech long enough to tell you why it was modeled to take so long, but I would hazard a guess that it’s because the primary method of moving money was paper checks and physical card impressions until the last couple decades.

I wonder how the taxes and fees refund works. Fees I can see airlines trying to say “we already paid these”, but taxes are only charged on services rendered, no? Is there a situation where the airlines have already paid sales tax to the local authority and don’t get a refund for canceled service?

There are also government-imposed taxes such as the U.S. Transportation Security Administration instituted Passenger Fee, which is charged as soon as the ticket is bought:

> "The fee is collected by air carriers from passengers at the time air transportation is purchased," according to TSA. "Air carriers then remit the fees to TSA."

(From https://thepointsguy.com/guide/taxes-and-fees-airline-award-...)

Of course it's charged as soon as the ticket is bought, no airline is selling a ticket then coming back later to collect taxes. The quote you provided only says "Air carriers then remit the fees to TSA.", it doesn't say when that happens.

Well, refund everything. A delay is them not doing their job right, as promised. There should be a cost to that, and if they are forced to refund 100%, maybe delays/cancellations will be fewer.

The cost to the customer is usually more than the price of the flight. Maybe they are late to another flight and since that will be their "fault" they will not be refunded. Maybe they miss a job interview, etc. Life isn't fair and what is owed is owed.

In fact, they have such great legal and accounting armies that I'm sure they can claw back those taxes from the IRS.

> A delay is them not doing their job right, as promised.

I am anti-airline here, I am loving where we are going with these things. But I don't agree with this: many delays happen precisely because they are doing their jobs right. This could be weather-related delays, observed mechanical issues, unexpected crew illnesses (note the plural), etc. And over the course of a day, these issues compound.

I think the government should refund the airlines the government taxes/fees for canceled/delayed flights due to weather or mechanical issues at least.

I’m with you. Telling airlines they need to refund due to weather or bad mechanics just invites them to take more risks.

I don't think they're paying taxes at the time the ticket is purchased. I'm very sure they're not paying taxes on cancelled flights, as long as they're refunding the principle.

How often do you think airlines are filing taxes?

I am responding to this:

> 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.

This is the provision I am responding to. If the airlines must refund the full value to the consumer, I do not see why the government should not also be refunding the airlines.

And I strongly contest the idea that any delay is a problem the airline themselves created. In fact, I believe the assertion is absolutely dead wrong. There are many externalities to on-time arrivals and departures that airlines cannot control. How could it possibly be an airline's fault if an airport hasn't cleared its runways of ice, or if a tornado is within 5 miles of the landing strip?

Of course I also believe airlines will disingenously attribute delayed departures to these externalities if able to, even if they are actually at fault, so I'm not sure what the "right" solution is here.

I don't think saying "They collected payment for a service they then did not provide" is necessarily blaming them, it's just saying that if you collect money for something they customer does not receive you have no grounds to hold on to the money.

> A delay is them not doing their job right, as promised.

This is the comment from the OP that motivated me to comment. I think that is a definitively incorrect conclusion.

I am willing to bet that their risk and pricing departments have accounted to losing some percentage of revenue in refunds to delays. Then they decided over time to start making it harder to refund customers, and then they started accounting for the perfentage of customers that actually fight for their rights, and maybe it's 10% of all affected customers. So they decided to account for the other 90% of suckers, as actual revenue, so that now if you threaten it, they will cry that you're going after their already low profits.

All of these costs should be part of doing business. You do not keep a dime form customers if they did not receive service, even if by an act of God.

If your business fails, then it failed. If others succeeded, then they were better then you or you got unlucky, and it's no one's job to make you lucky.

How often do you see businesses screwing over customers just because they can? You arrive late to a flight due to unforeseen circumstances, and the airline will not refund you, no matter what you do. Why should you accept this from them?

I feel very strongly about this because I have experienced how predatory these companies are. Last time I was on vacation, there was a natural disaster, and I could have let them keep my money just to support them. But after I landed there (having paid for the stay in full), I was presented with a resort fee of close to $500. They know I had nowhere else to go, so they took advantage. Well, it felt really great clawing all that money back after spending 2 days there. This feeling, they feel this every day when screwing customers.

What if those taxes and fees pay for ATC which helped get a diverted flight to an alternate airport? Or for all the navigational aids along the way?

> How could it possibly be an airline's fault if an airport hasn't cleared its runways of ice?

They've failed to manage supplier risk.

> I think the government should refund the airlines the government taxes/fees for canceled/delayed flights due to weather or mechanical issues at least.

It's my understanding that taxes aren't collected until well after the flight (service) has been fulfilled, and cannot be collected when it has not.

https://www.marketplace.org/2021/07/08/didnt-use-your-airlin...

Sounds complicated.

This is somehow not an issue for any other business, so they'll figure it out.

Nearly every government handles things like sales taxes quarterly. Each quarter the merchant submits a report to the government showing the sales and the tax collected in the previous quarter and sends that collected tax to the government.

The due date for submitting the previous quarter’s taxes will generally be late enough that the merchant can wait until most items or services sold at the end of the previous quarter have been delivered or performed.

If you have to refund a customer after you have submitted your taxes you can take the amount of tax that was included in the refund as a credit the next time you file with with the government.

> I wonder how the taxes and fees refund works. Fees I can see airlines trying to say “we already paid these”, but taxes are only charged on services rendered, no? Is there a situation where the airlines have already paid sales tax to the local authority and don’t get a refund for canceled service?

Whether or not the taxes or fees are eligible for a refund to the airline (or don't have to be paid; payment of those will often be delayed) depends on the specific law applicable to each tax or fee, but with the new rule, that's the airline’s issue—they have to refund it to the customer whether or not the airline is still on the hook for it.

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