A new Department of Transportation rule requires airline companies to refund customers for canceled flights as soon as possible.
The DOT’s final federal rule went into effect Monday and requires airlines to immediately process customer refunds after their flight has been canceled or significantly altered. The refunds cannot be in the form of vouchers and must be issued after a customer declines an altered flight or alternative form of payment.
However, the rule gives airlines seven days to process the refunds if the customer used a credit card and 20 days if the customer used a different payment method.
Transportation Secretary Pete Buttigieg proposed the rule in April, arguing that airlines need to accurately inform customers when they are entitled to a refund and make it easier for them to receive it.
“Today, our automatic refund rule goes into full effect. Passengers deserve to get their money back when an airline owes them,” Mr. Buttigieg posted Monday on X. “Without headaches or haggling.”
This week’s change comes ahead of the 2024 holiday season, with most major airlines expecting busy airports and high ticket prices.