Refunds & Compensation: What’s the Difference?
You’ve had a problem with your flight, and now you’re wondering if you’re owed a refund. To make matters even more confusing, you learn that you might also be eligible for airline compensation, depending on where you’re travelling.
If you’re trying to figure out refunds and compensation, keep reading, because in this article, we’re going to explain everything you need to know.
How is an Airline Refund Different from Compensation?
To explain in the most basic terms, a refund is when an airline repays you the money you spent on your ticket. You usually get a refund when the service you purchased is not delivered.
Compensation, on the other hand, is what an airline pays you in cash, vouchers, or credits for any inconvenience caused by avoidable flight disruptions.
Usually, you will only receive one or the other, but there are some situations where you could be entitled to both compensation and a refund, but more on that later.
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When are You Entitled to a Refund?
Most airlines will give you a full ticket refund for a flight if they were unable to deliver the service you paid for. So, anytime you book a flight, you are entitled to a refund in any of the following situations:
- Your flight is cancelled by the airline
- You have a delay that lasts more than 5 hours (in the UK and EU)
- Your departure or arrival airport changed from what you originally purchased.
- You were involuntarily denied boarding, and you choose not to continue travelling.
- You purchased a refundable ticket and decided to cancel your flight.
- Your seating class was downgraded from what you originally purchased.
You can also receive a refund for extras including baggage fees, in-flight meals, seat selection, or wifi.
Are Airline Refunds Always Paid in Cash?
Legally, refunds must be provided in cash, but airlines frequently offer passengers vouchers or travel credits instead. If you’re unfamiliar with passenger rights, you might feel pressured to accept a voucher, but you don’t have to. You have the right to demand cash.
When they make the refund request, Lufthansa explains that a travel voucher will be issued for future trips. However, the passenger doesn’t want to accept a voucher because they don’t think they will fly anytime soon. Because the passenger is aware of their passenger rights, they turn down the offer and ask for a cash refund instead.
PRO TIP: If you’re entitled to a refund, remember that you don’t have to accept vouchers or travel credits in place of cash. In the UK, EU, US, and Canada, airlines are required by law to repay passengers in cash. - Anton Radchenko, International Lawyer.
Is a Flight Refund the Same as Reimbursement?
Reimbursement is similar to a refund as both are forms of repayment, but a refund is literally repaying you for a service you purchased but did not receive. In contrast, reimbursement is a repayment, usually for out-of-pocket expenses incurred because of an avoidable flight disruption.
So, for example, if you had a flight delay, and you had to buy meals and hotel lodging, airlines in the UK and EU would reimburse you for these expenses.
When are You Entitled to Flight Compensation?
Cash compensation is paid to passengers following an avoidable flight disruption, but this differs widely depending on where you travel. In the European Union (EU261), the United Kingdom (UK261), and Canada, you can get cash compensation for the following situations:
- Flight delays of 3+ hours
- Flights cancelled less than 2 weeks prior to departure
- Involuntary denied boarding caused by overbooking
Other forms of compensation include meals, refreshments, and hotel accommodation. These are provided any time you are forced to wait at the airport for 2 or more hours, regardless of whether or not the airline was responsible for the cancellation or the delay.
In the United States, you can get cash compensation if you were denied boarding because of overbooking, but airlines are not compelled by law to compensate you for delays and cancellations. Also, airlines in the US are not required to provide care and assistance, but you might receive some help if you ask.
You can also get compensation for baggage loss, damage, and delays in varying amounts depending on which country you’re in and whether you had a domestic or international flight.
Can You Get a Refund Instead of Compensation?
No, flight refunds and compensation are completely different, so one cannot be substituted for the other. You might be owed compensation in addition to a refund, but one cannot replace the other.
For example, let’s say you paid $100 for an easyJet flight that was cancelled 2 days before departure because of an airline scheduling mishap.
You are given the option of a rebooking or a refund, so you choose the refund. Because of this, you will get your £100 back from easyJet, but you will also get cash compensation because a scheduling mishap is a controllable situation. The amount of compensation you get is based on the distance of your flight, but if you had a short flight, you would get roughly $250. So, in the end, you will receive a total of £350.
Can You Get Compensation in Addition to a Refund?
You can get compensation in addition to a refund if your flight was cancelled or severely delayed because of something the airline could have prevented. You could also get a refund and compensation if your flight was overbooked, and you were denied boarding as a result.
How AirAdvisor can Help
Having trouble getting the compensation or refund you’re owed? Let our legal team help you. Start by checking your flight’s eligibility in our compensation calculator, and if you’re eligible, you can start the claim process. It’s that easy.
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