Airlines Aren’t Making It Easy to Use Covid Credits

United, a target of many customer complaints, has two types of credits: travel credits and flight credits. They may sound nearly identical, but they’re quite different.

Travel credits, officially called electronic travel certificates, can be used for multiple trips until you use up the full value. Not so with flight credits. Starting March 3, flight credits became one shot—if you rebook for a trip less expensive than your original ticket, United pockets the difference. And guess what happens with credits and certificates if your new trip is more expensive than the original: United charges you the difference.

Confused? Frequent flier Karen Moraghan was when she ended up with a $1,200 United flight credit and tried to use it on a $700 rebooking, only to learn she’d lose the remaining $500.

“I was just flabbergasted,” says Ms. Moraghan, a Hilton Head Island, S.C., resident who is in the elite 1K tier of United’s frequent-flier program. “That’s not right.”

She complained, and United made an exception for her so she could get a refund on residual value.

United says it has two kinds of credits because it tries to use travel certificates to compensate customers for disruptions, service failures or bumping passengers from flights. Flight credits are for passengers who change their plans on nonrefundable tickets. So the terms are different. Spokeswoman Maddie King says United will, under some circumstances, switch a customer’s flight credit to a travel certificate if requested. Certificates can be used by another person if the original passenger can’t use it or can be used for multiple trips.

Asked if it’s fair for the airline to pocket residual value if the new flight doesn’t cost as much as the original flight, Ms. King says: “Our goal is to give them an option. We hope they will use this whole flight credit that they are offered for another trip in the future.”

Airline credits are about to explode as a consumer issue, as grounded consumers start thinking about traveling in 2021 and using the vouchers that airlines forced them to take instead of refunds. U.S. regulations require that airlines offer refunds if the airline cancels a flight and the new itinerary is significantly different. Some airlines have ignored that. And for all, if passengers opt to cancel a nonrefundable trip, a credit or voucher is what they get.

Carriers like Southwest and Delta have relatively simple terms on credits, much like other merchants. You can apply the credit toward multiple trips, for example. But other airlines make their credits very hard to use and easy to shrink in value.

American says it has three types of travel credit, two launched this year. It will ultimately streamline to two once the pandemic is over. Flight credits are issued for pandemic-related cancellations; travel vouchers have been around for decades in paper and electronic form and will be phased out; and trip credits were launched this year as the ultimate replacement for travel vouchers.

Unlike United, American’s new flight credits don’t lose value if you rebook for a cheaper flight—you get the difference in a trip credit. But there are restrictions. Vouchers can be used to book trips for other people; flight credits can be only used for tickets for the original passenger. There are some benefits, too. If paper vouchers were lost and you didn’t have the number, you lost. Flight credits live electronically with your frequent-flier account.

Sunita Warrier, American’s director of customer-experience solutions, says trip credits will ultimately make it easier for customers to rebook. Vouchers had to be manually processed, she notes. “We want to make it easy to do business with us,” she says.

Other airlines make vouchers and credits hard to use in different ways. Denver-based Frontier Airlines imposes a 90-day rebooking expiration date on its credits. That drew so many complaints that Colorado’s attorney general appealed to the Transportation Department, since airlines are regulated federally and immune from state consumer laws.

One example of Frontier frustration: Every time Kristen Dori rebooked a trip to keep the credit from expiring, she was charged predeparture baggage fees again and again, even though she never left home. She bought a ticket in February for a March trip and paid $133 for luggage, then canceled and got a credit. When she rebooked for a September trip, she says she had to pay another $144 for her bags and her husband’s round trip. That trip had to be canceled because of a family illness, so to keep the credit from expiring, she booked a trip for next May.

“I’m into this for $250 for luggage that went nowhere,” she says.

Frontier says it actually refunded Ms. Dori’s original baggage charges as part of her credit, which was converted into frequent-flier miles. When booking the next flight using miles, customers must purchase baggage or seating separately again.

Regarding the Colorado AG, Frontier says it was in full compliance with federal rules. It has changed vouchers so they are good for one year rather than 90 days.

Stephanie Martin paid United $8,348 for two business-class seats from Orlando to Johannesburg via Frankfurt, but took a travel certificate for that value when she and her husband decided to cancel the June trip. All their flights were to be flown by Lufthansa, United’s joint-venture partner. She bought them through United.

When she went to use the voucher for a trip to Cairo, she was told it could be used only for flights on United’s planes, not its partners. When she accepted the travel certificate, she had specifically asked United’s agent if she could book the same trip she’d had, or other international trips, and was told either was fine. But it turned out no—United doesn’t fly its own planes to Johannesburg or Cairo. Flight credits can be used for partners, not travel certificates.

She thinks airlines are doing all they can to hang on to customer cash. “They were making money on my money,” she says.

Ms. Martin called United four times and four times filled out the airline’s customer-service form. Each time United rejected her request for a refund or a change to a flight credit. She wrote to the Florida attorney general, the Transportation Department and United CEO Scott Kirby. She complained on social media. A desperation call to the Federal Aviation Administration brought a suggestion to go to the airport and plead, since airport agents sometimes have more latitude to resolve disputes.

After three hours, a helpful supervisor contacted a friend inside United who, three weeks later, got Ms. Martin a refund.

“Having different types of travel vouchers does complicate it,” she says.

United says it isn’t sure how Ms. Martin received a travel certificate instead of a flight credit, which would have allowed her to book on partner airlines as she originally had done.

Write to Scott McCartney at [email protected]