What Travelers Need to Know About DOT’s New Automatic Refunds Policy
The new rule requires automatic cash refunds for passengers facing canceled flights, major delays, or lost baggage
Photo: Courtesy of Ricardo Cruz / Unsplash
Travelers in the U.S. now have powerful new protections when it comes to airline refunds. Effective this week, the Department of Transportation‘s (DOT) final rule on automatic airline refunds ensures passengers can receive prompt cash refunds for canceled or significantly altered flights, delayed baggage, and services that don’t deliver as promised.
Photo: Courtesy of by Suganth / Unsplash
“Passengers deserve to get their money back when an airline owes them—without headaches or haggling,” said U.S. Transportation Secretary Pete Buttigieg. “Today, our automatic refund rule goes into full effect. Airlines are required to provide prompt cash refunds without passengers having to ask.”
Initially announced in April, the rule is projected to save travelers over $500 million annually.
What is a “Significant Change”?
Under the new rule, passengers are entitled to a refund if a flight is canceled or significantly changed, provided they choose not to accept an alternative flight or credit.
Previously, refund policies varied widely, but now DOT clearly defines a “significant change” to include:
| Significant Changes: |
|---|
| A departure or arrival time change of over three hours for domestic flights or six hours for international flights. |
| Departures or arrivals from a different airport than originally scheduled. |
| An increase in the number of connections. |
| Downgraded seating. |
| For travelers with disabilities, connections at different airports or flights on less accessible aircraft. |
These adjustments offer travelers increased clarity and protection, especially when dealing with unexpected changes.
Before this ruling, passengers were left at the mercy of their airline’s refund policy, which would vary significantly regarding what sort of flight disruptions and changes warranted compensation.
This variation in each carrier’s policy often led to confusion among passengers as to what they were owed, and this new guidance is intended to make things clearer for consumers and put a stop to airlines using deceptive practices to refuse refunds after high levels of flight disruption.
Bag Delays Will Now Cost Airlines
If checked baggage is delayed beyond 12 hours after a domestic flight lands, passengers will automatically receive a refund on their baggage fee.
Photo: Courtesy of Calle Macarone / Unsplash
For international flights, passengers can expect refunds when their bags aren’t returned within 15 to 30 hours after arrival, depending on the trip’s duration.
By standardizing refund eligibility for delayed luggage, the DOT is offering much-needed assurance for travelers who rely on timely baggage return.
Ancillary Services Now Eligible for Refunds
The new rule also covers additional services purchased by passengers, such as Wi-Fi, inflight entertainment, or seat selection. If an airline fails to provide any paid service, passengers can request an immediate refund for the fee associated with that service.
Photo: Courtesy of Alaska Airlines
The DOT’s decision to cover ancillary services aims to prevent passengers from paying for amenities that don’t materialize during their journey.
Automatic Refunds
Importantly, the rule mandates that refunds must be prompt, automatic, and issued in full—within seven business days for credit card purchases and 20 calendar days for other forms of payment. This means passengers no longer need to formally request a refund; airlines must process refunds without passengers needing to follow up.
The new regulations will simplify the process for passengers to receive their owed compensation quickly and without hassle. Previously, travelers affected by disruptions often had to spend time navigating their airline’s website to find the refund process, fill out lengthy digital forms, or wait for hours on the phone for assistance. Furthermore, these new rules will ensure that airlines cannot issue refunds solely as travel credits or vouchers, which often limits passengers’ ability to book alternative travel arrangements with other carriers.
Photo: Virtual credit card. Courtesy of naipo.de / Unsplash
Airlines are also prohibited from issuing vouchers or travel credits as substitutes for cash refunds unless the passenger explicitly chooses this option.
Additionally, the DOT requires airlines to provide 24/7 customer service channels, including live chat and phone support, so travelers have easy access to assistance when needed.
For U.S. travelers, these changes set a higher standard for customer service and bring renewed transparency and accountability to air travel.
