Originally Posted by
dml105
Because that seat wasn't available to sell to another passenger until it was cancelled.
But it was. Airlines have long used overbooking algorithms, and these days those algorithms are quite good. Sadly, I think that better data analytics tools have made them *too* good: flights are always full, yet they seem to land closer to the "right" count, leading to much lower VDB offers than years ago. (If they're over by 1 or 2, a couple $250 vouchers gets the job done. When they were over by 20 pax on a 727, it took $500-750 per person to get it done.)
They expect some people to cancel refundable tickets: that's why they market them that way. The airline refunds your original capital only. They got your money for a few weeks or a few months. You got the ability to cancel the trip.
I can see where passengers would be confused by a "refund fee" as we tend to think of refundable tickets are Y/B fares that are totally refundable, no questions asked. But if there are markets where this is common and made extremely clear to passengers (beyond only in fine print that is hard to find), so be it.