Addicted to fees (interim $100 international cancelation fee Sep 2020)
Sep 22, 2020, 7:59 am
#1
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Addicted to fees (interim $100 international cancelation fee Sep 2020)
AA's marketing email today included the following:
For a limited time, book refundable fares to select destinations in Europe, Asia and South America and travel anytime. If your travel plans change and you wish to cancel, your fare is refundable minus a $100 administrative fee.
I understand the desperate dilemma that airlines are experiencing, but it seems as though the idea of the "fee" — a tacked-on "administrative," destination," "whatever" fee remains deeply and unfortunately embedded in the culture, despite the fact that consumers despise them, that they are inherently unfair, and that this moment seemed to be an opportunity for more transparent pricing approaches to take hold.
For a limited time, book refundable fares to select destinations in Europe, Asia and South America and travel anytime. If your travel plans change and you wish to cancel, your fare is refundable minus a $100 administrative fee.
I understand the desperate dilemma that airlines are experiencing, but it seems as though the idea of the "fee" — a tacked-on "administrative," destination," "whatever" fee remains deeply and unfortunately embedded in the culture, despite the fact that consumers despise them, that they are inherently unfair, and that this moment seemed to be an opportunity for more transparent pricing approaches to take hold.
Sep 22, 2020, 8:06 am
#3
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This seems pretty transparent to me. Consumers have grown accustomed to non-refundable fares and change fees. Change fees have largely gone away. This is another step in the right direction.
Sep 22, 2020, 8:55 am
#4
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It is entirely transperent.
What matters is whether the refundable fare represents good value to you. It may be that you are better off booking a non-refundable fare and then paying a $300+ change fee if the need arises, while taking only a credit and not a refund.
AA does not charge a fee which equates to the specific cost of the specific task any more than it charges an airfare per mile flown.
If the fare and its rules do not suit you, the solution is to either pick another fare or another carrier which does suit.
What matters is whether the refundable fare represents good value to you. It may be that you are better off booking a non-refundable fare and then paying a $300+ change fee if the need arises, while taking only a credit and not a refund.
AA does not charge a fee which equates to the specific cost of the specific task any more than it charges an airfare per mile flown.
If the fare and its rules do not suit you, the solution is to either pick another fare or another carrier which does suit.
Sep 22, 2020, 9:03 am
#5
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I think the point is that it is somewhat disingenuous to call something 'refundable' which is then associated with a refund processing fee. When I return something to the shop unused, because I wish to reverse the purchase decision, I don't generally get hit up with a processing fee, even though someone at Best Buy is going to have to spend five minutes making it happen.
Sep 22, 2020, 9:10 am
#6
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I think the point is that it is somewhat disingenuous to call something 'refundable' which is then associated with a refund processing fee. When I return something to the shop unused, because I wish to reverse the purchase decision, I don't generally get hit up with a processing fee, even though someone at Best Buy is going to have to spend five minutes making it happen.
This differs than returning a product at Best Buy, which can be put back on the shelf and resold, whereas the value of the airline seat immediately goes to zero once it flies empty.
Sep 22, 2020, 9:11 am
#8
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I think the point is that it is somewhat disingenuous to call something 'refundable' which is then associated with a refund processing fee. When I return something to the shop unused, because I wish to reverse the purchase decision, I don't generally get hit up with a processing fee, even though someone at Best Buy is going to have to spend five minutes making it happen.
Sep 22, 2020, 9:13 am
#9
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Of course it does. A business must factor in its costs when setting its prices. That said, as I indicated in my last post, this fee is about the optionality the airline is selling you much more so than the cost of the telephone agent.
Sep 22, 2020, 9:13 am
#10
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Sep 22, 2020, 9:17 am
#11
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I can understand the objection to the phrase “administrative fee.” AA is charging the fee not because of the cost of administration, but rather it’s part of the cost of the product. Essentially one is paying $100 for optionality, which any economist will tell you has real economic value. If you opt not to take the flight, you can get the rest of the fare refunded, but not what you paid for the optionality.
This differs than returning a product at Best Buy, which can be put back on the shelf and resold, whereas the value of the airline seat immediately goes to zero once it flies empty.
This differs than returning a product at Best Buy, which can be put back on the shelf and resold, whereas the value of the airline seat immediately goes to zero once it flies empty.
Sep 22, 2020, 9:20 am
#12
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How so? It's fully disclosed. You have the option to buy the advertised ticket with the advertised fees and restrictions. How is this, in any way, inherently "unfair"? Sounds more to me like you want what you want, you want it cheap, and you're going to cry about it if you don't get it.
Sep 22, 2020, 9:24 am
#13
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Right, but that's why refundable 'full' fares are so much more expensive in the first place; the optionality is, or should have been, priced in already. It's like resort fees, just bundle the whole thing in one package at the outset, rather than coming after fees later on.
Resort fees, on the other hand, are entirely unjustifiable IMHO. They are nothing more than masked price increases. They are anti-competitive and anti-consumer.
Sep 22, 2020, 9:34 am
#15
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According to GlassDoor, the typical AA call center employee makes $14 an hour. If I spend 3 minutes canceling a reservation, that works out to 70 cents of expense for the employee's time.