Refundable v. Non-Refundable Tickets: When Do They Make Sense?

As the top salesperson in your firm, you’ve finally received a call back from a big prospect in Chicago you’ve been courting for months. She tells you that you’ve made the short list of potential suppliers for the next fiscal year and invites you come out and present your solution to their executive team next month. A combination of exhilaration tempered with cautious optimism washes over you as you begin the process of making the travel arrangements.

Flash forward to two days before you are scheduled to deliver your pitch. Your telephone rings.  The caller ID reveals it’s your prospect on the other end, so you hastily grab the handset with the assumption that she is calling to confirm the meeting and its attendees. Your mood changes instantly, however, when she tells you that there’s been a change. One of their key executives has been called away on more pressing business and they will need to push the meeting out by two weeks. There’s nothing to do except to contact the airline to make the appropriate changes. That’s when it hits you. The fantastic deal you found on your flight is non-refundable and, as such, is now subject to a $200 change fee.

This happens more often than one might think.  In fact, the change fees charge by airlines is big business, totaling nearly $3 billion across all major carriers annually. Why would consumers continue to pay these? The answer is simple. Very few travelers think that their itinerary is going to change and, if it does, the initial fare plus the change to their reservation is still less expensive than the fully refundable ticket alternative. The truth is that a fully refundable ticket can cost anywhere between two and four times the non-refundable option. There are times when this option makes sense, however.

When to Consider a Fully Refundable Ticket

When traveling for pleasure, we tend to have more control over our schedule and the need for changes is less likely than when our plans are subject to the likely changes imposed by business. In some instances, these aren’t simply flight changes, but the cancellation of a proposed meeting altogether. For these reasons, a refundable ticket may be the wisest course of action.

There are some things to consider when planning your next business trip.  First, shop your options thoroughly between air carriers. The carrier with least-cost, non-refundable airfare may not necessarily offer the least expensive refundable ticket. Be sure to compare the price of a fully refundable ticket across multiple carriers if you feel that there is a chance your plans could be changed or cancelled. The differences can be considerable.

You may want to book your trip through a carrier that won’t charge for altering your flight itinerary. Southwest Airlines, for example, does not impose a charge to do this. If you change destinations, however, you will be charged for the difference in fare, if there is one.

A Refund is Still a Refund

At the end of the day, a refund is still a refund. Whether a carrier charges you to make changes to your plans or not, they still will not refund your purchase except in the rarest of circumstances. If you need to indefinitely postpone your travel, you will receive a voucher for future travel that is generally redeemable within one year. A refundable ticket, however, is just that. You will receive a credit back to your method of payment within a day or two for the cost of the ticket even if your plans change after you check in for the flight.

The best bet is to make sure that you fully understand the policies outlined by your travel carrier and to explore costs across multiple airlines. There are circumstances where the flexibility and convenience of fully refundable reservations will outweigh the short-term savings of non-refundable bargain fares.

Still debating that non-refundable ticket? Call AmTrav to clarify at 1-800-795-8371.

By: Denise D.