AA sent refund to credit card not voucher

 
Old Oct 11, 15, 8:28 pm
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AA sent refund to credit card not voucher

A few weeks ago I took advantage of a schedule change to cancel the return portion of a ticket (I flew FCO-LHR-JFK, canceled JFK-LHR after arrival in NY)

AA promised me $192.XX per pax to be delivered on a paper voucher. I called AA today as I haven't received the voucher only to be told that $157.XX is going to be refunded to my original form of payment (hasn't shown on my card statement yet). I am not super concerned about the missing money (although I would like the amount I was promised!) but I am very concerned about the way they deliver the refund as returning it to the original form of payment will cause a major headache in my accounting and expensing reports this year.

Has anyone had any luck either getting the correct amount fixed or getting the process reversed so the refund comes as a voucher?
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Old Oct 12, 15, 3:09 am
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Just curious, was this a ticket paid for by an employer?
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Old Oct 12, 15, 3:20 am
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I expect that there was a cancellation penalty and the airline properly repriced correctly as a one way ticket and refunded accordingly. Seems like a good thing to get cash back rather than play money

I am curious how this would impact accounting - just need to properly account for the airfare as a one way price and would have thought a voucher would be at least as difficult to account for

Last edited by Dave Noble; Oct 12, 15 at 3:27 am
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Old Oct 12, 15, 10:13 am
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Originally Posted by Dave Noble View Post
I am curious how this would impact accounting - just need to properly account for the airfare as a one way price and would have thought a voucher would be at least as difficult to account for
One way it could affect accounting is that a credit back to the original form of payment of the card's account owner. If this was paid on a company card and expense reports were involved, I'm sure there would be some additional paperwork involved to account for the unexpected additional funds.

If the refund was issued in the form of a voucher, then no need to rebalance the books. Also, the voucher would happen to be in the name of the flying passenger.

I'm not saying it's happening here of course, that would be speculation. But that is one possible and reasonable scenario to answer your question.
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Old Oct 12, 15, 12:37 pm
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Basically had to go to Europe for a client but wasn't sure exactly when or where from I would be returning so had to book it as two one way tickets. For the flight back from Europe it was only $100 more to book a EU-US-EU ticket than it was to fly one way. Client agreed to front the round trip ticket if I left off an equal amount of other expenses.

That was fine by me as I knew I would use the ticket back to EU and come home on miles or a cheap ticket but I ended up having to cancel that trip. If it goes back on the original card it just creates much more of a headache than it really needs to.
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Old Oct 12, 15, 2:22 pm
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Originally Posted by IceTrojan View Post
One way it could affect accounting is that a credit back to the original form of payment of the card's account owner. If this was paid on a company card and expense reports were involved, I'm sure there would be some additional paperwork involved to account for the unexpected additional funds.

If the refund was issued in the form of a voucher, then no need to rebalance the books. Also, the voucher would happen to be in the name of the flying passenger.
Of course the books would still need balancing - just that it would need balancing based on a voucher rather than cash

In either case , there would be discrepency between amount incurred and amount expensed

In this case though, it seems that it was balanced by only charging the one way cost up front

Originally Posted by PbodyPhoto View Post
That was fine by me as I knew I would use the ticket back to EU and come home on miles or a cheap ticket but I ended up having to cancel that trip. If it goes back on the original card it just creates much more of a headache than it really needs to.
Was the schedule change on the outbound journey or the inbound which allowed you to avoid the change fee?

It would seem reasonable that if the schedule change allowed a cancellation of the inbound without penalty , that the fare difference be refunded

if the Europe-USA flight was impacted by enough to trigger entitlements under EC261, then definitely would be a cash refund.

Last edited by Dave Noble; Oct 12, 15 at 2:38 pm
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Old Oct 12, 15, 3:30 pm
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Client flew me JFK-FCO one way then the return ended up being booked as FCO-LHR-JFK-LHR as it was only about $100 more than the one way fare would be. Booked on client credit card and I was out about $100 of my expenses in order to balance the books.

The schedule change was relatively minor so didn't go in to the realm of EC261 but did allow me to cancel the JFK-LHR flight with no penalty.

Now the refund is going to the client credit card I am effectively out of pocket as I forfeited expenses and it will only stand to confuse them when I try to correct the issue. It would have been much easier if I got the voucher.
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Old Oct 12, 15, 3:43 pm
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Originally Posted by PbodyPhoto View Post
The schedule change was relatively minor so didn't go in to the realm of EC261 but did allow me to cancel the JFK-LHR flight with no penalty.
I may be missing something about AA's arcane policies, but if there was a change which permitted cancellation, then I cannot think why the refund should be anything other than to original form of payment
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Old Oct 12, 15, 4:01 pm
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Originally Posted by Dave Noble View Post
I may be missing something about AA's arcane policies, but if there was a change which permitted cancellation, then I cannot think why the refund should be anything other than to original form of payment
Twice in this situation I have received vouchers and two agents and a supervisor confirmed it would come as a voucher.
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Old Oct 12, 15, 4:31 pm
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If the schedule change is sufficient so as to permit a cancellation and refund, the COC expressly require AA to refund to the CC used to purchase the ticket. If you read the entire lengthy provision relating to refunds (International COC, Rule 90), you will see that the refund provisions are specifically written to prevent value from being paid to anyone other than the purchaser when other than cash is used.

This should not cause any accounting headaches so long as OP advises his client that it will be receiving, as it should, a refund of whatever the amount is. The client will reflect that amount as reducing its cost of doing business, e.g., paying OP's travel and the client is fine.

OP on the other hand is out approx. $100, but can deduct the unreimbursed expenses (presuming that he is a US taxpayer), so he is really only out the $100 less marginal tax rate. Alternatively, he might simply advise the client that it will see the refund and that he will now submit full expenses.

Not to chastise OP, but this is all far from best business practices. Things go wrong all the time. Far better to let the tickets cost what they cost and to expense whatever expenses are.
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Old Oct 12, 15, 5:20 pm
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Originally Posted by Often1 View Post
...Alternatively, he might simply advise the client that it will see the refund and that he will now submit full expenses.

Not to chastise OP, but this is all far from best business practices. Things go wrong all the time. Far better to let the tickets cost what they cost and to expense whatever expenses are.
That is probably exactly what I will do. Just annoying that in past situations I have received vouchers (in the past it has been leisure travel booked and paid for by me) and I was told over the phone I would receive vouchers again this time around.

Whilst it is far from ideal practice it is common in my industry to book return tickets when they are cheaper or only marginally more than the one way ticket and it is always with approval or even at the suggestion of the client (when a r/t is cheaper than a o/w).
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Old Oct 12, 15, 5:43 pm
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Originally Posted by PbodyPhoto View Post
Whilst it is far from ideal practice it is common in my industry to book return tickets when they are cheaper or only marginally more than the one way ticket and it is always with approval or even at the suggestion of the client (when a r/t is cheaper than a o/w).

Once you cancelled the return leg due to a airline schedule change allowing a free cacelleation, then it became just a one way ticket again though surely?

If it had been done as a voluntary change and penalties paid, if that fare allowed for a voucher in case of such a modification, then would have expected a voucher

Just in case there was a mistake by the agent, have you tried calling back and seeing that another agent confirms the same ?

Last edited by Dave Noble; Oct 12, 15 at 6:00 pm
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Old Oct 12, 15, 5:58 pm
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Originally Posted by PbodyPhoto View Post
Whilst it is far from ideal practice it is common in my industry to book return tickets when they are cheaper or only marginally more than the one way ticket and it is always with approval or even at the suggestion of the client (when a r/t is cheaper than a o/w).
I think this:
Originally Posted by PbodyPhoto View Post
...if I left off an equal amount of other expenses.
is what some may consider not best accounting practices. Not buying two one ways instead of a r/t or vice-versa.

To the question, if anything, it was at the time of the call that you should have made sure you would get a voucher. I know the agent said so, but I guess the agent was not being thorough and just agreed with you on voucher without knowing what the system was really doing? Don't the agents over the phone generate the voucher order instantly so they can give you a reference number or something?
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Old Oct 13, 15, 11:14 am
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Originally Posted by IceTrojan View Post
One way it could affect accounting is that a credit back to the original form of payment of the card's account owner. If this was paid on a company card and expense reports were involved, I'm sure there would be some additional paperwork involved to account for the unexpected additional funds.

If the refund was issued in the form of a voucher, then no need to rebalance the books. Also, the voucher would happen to be in the name of the flying passenger.

I'm not saying it's happening here of course, that would be speculation. But that is one possible and reasonable scenario to answer your question.
THIS! If I purchase airfare, I expense that amount, and we're good to go. If a refund then comes along back to my corporate card, I not only have to expense that amount as a negative, but then I have a balance on my corporate card. This means that further expenses have to be marked as DO NOT PAY which takes significant work until the balance is used - and then there's that one pesky expense at the end where you have to split it between do not pay and to be paid.
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Old Oct 13, 15, 11:25 am
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Originally Posted by bchandler02 View Post
THIS! If I purchase airfare, I expense that amount, and we're good to go. If a refund then comes along back to my corporate card, I not only have to expense that amount as a negative, but then I have a balance on my corporate card. This means that further expenses have to be marked as DO NOT PAY which takes significant work until the balance is used - and then there's that one pesky expense at the end where you have to split it between do not pay and to be paid.
That is expressly what the COC contemplate as a best practice. Here it is one step further because the client paid for the ticket with its card and will also receive the refund. It is OP who agreed not to expense certain items.

But, even if paid for on your own card and then invoiced to the client:
1. Purchase ticket for $1,000.
2. Cancel segment and receive refund of $100.
3. Stay in hotel billable to client for $500.

The client statement would show all three transactions and net out at $1,400 due from client. If the refund comes after the invoice is issued, the client would run a credit balance with the vendor for some period of time and would ultimately receive the cash back from the vendor if the contract is ended.
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