Tim in Hollywood

Hi all,

I have a company that will be paying for my long-haul flight. They will book the business class flight, which will be around $8,000.

Is it possible for me to "downgrade" to a coach seat and get the price difference given to me? While I enjoy C and F, I can take a little pain in coach for the price difference of $6,500. :-) Do you think it will be possible?

Thanks,
Tim in Hollywood

bfunkjeep

I believe refunds are only issued directly back to the source of payment. (i.e. same credit card) In your case, they probably would cut a check for the difference directly to your company.

If you're company allows you to keep the difference, then go for it.

wharvey

Tim,

Be very careful of this... and make sure your company agrees with this policy.

I have a feeling that your company might not like your pocketing their money.

If you are expensing the entire ticket, you need to use it... to take the money and put it in your own pocket - in my mind - would be stealing.

Certainly do not do this without asking your company about it first.

Not worth risking your job over this.

William

gabbysz

Here's what can be done:

1. Buy your FC ticket on your personal credit card as an E-ticket.
2. Buy your coach ticket on another personal credit card (E-ticket or otherwise, doesn't matter).
3. After receiving the receipt for your FC E-ticket, keep it for expensing.
4. Call the airline directly and have them refund the FC E-ticket directly to your credit card.

This will give you a receipt to use for expenses and the refund on your credit card, voila! This will only work if your company allows you to use any credit card for expenses.

FWAAA

Please ask your employer if this is ok with them before you do it, as wharvey cautioned you. Not only would acting otherwise be stealing, but the money you pocket is taxable income, and failure to report it is tax evasion.

Even if your employer says "go for it," taking the cash still makes the money taxable income to you (no different than wages).

A bunch of NBA refs did the very same thing you propose, and although I don't think any went to prison, they were convicted and fined heavily (plus paid tax, penalties and interest). The total they paid was much greater than the cash they pocketed.

The refs' contract with the NBA provided them with guaranteed F travel, and they got the bright idea to downgrade and pocket the loot (the NBA was cool with it - they had permission). Problem was, they were tax cheats.

cattle

Have to agree here. Now, if they let you keep the money and know about it, then have a really great flight. Just be careful that you don't set a precedent and they only buy you full Y or discounted Y after this.

Sometimes when you aren't out any money on something you don't need to go looking for ways to make money on it either. Golden rule for me don't cheat on expenses, it's not worth your job.

Wiirachay

My advice: The boss pays for it, you TAKE it! There are many people traveling in Y because that's all their company will pay for!!!

Bon apetit.

- Pat

CT-UK

I know a guy who got fired and then taken to court for such actions by his company.

He always booked and paid for F tickets on his CC and get reciept for them. He would then cancel and buy a Y ticket. At that time we did a lot of work in Korea/China so he got away with 20 UK-Asia trips claiming around 8k each on only spending around 1k.

He got away with it until he made a stupid mistake. When he split from his wife he had no permenant home so he had his mail sent to the office. One morning an accounts girl opened his FF statement by mistake and noticed the Y fares.

He had lost his wife( not connected ), his job and spent 12 months inside.

Do not do it!

FWAAA

Here's a Sports Illustrated article discussing the firing of a Major League ump for downgrading in violation of MLB contract provisions (plus it discusses the NBA refs' troubles):

Link to Article

Be careful.

Efrem

I did this once as a consultant: reimbursed by a client for business class travel (US to Europe), bought coach, upgraded one way with miles and got an entire middle section of four seats to stretch out across the other.

I did this with the client's prior knowledge and agreement. I documented the expense as what business class would have cost, not as what I paid (because I didn't).

I also paid income tax on the difference, because the business class fare came through on the 1099-MISC from that client and my only offsetting expense was a coach ticket.

I agree with those who say not to do this without prior OK. However, I don't think it can hurt to ask. If part of the reason for flying business class is to be fresh for work on arrival, you can say you'll upgrade with FF miles.

Tim in Hollywood

Hi all,

OK! I better set everything straight, before anyone thinks I am up to no good!

First, I was mostly curious if this were technically possible. I assumed that any refund would go back to the original form of payment, but I wasn't totally sure.

Second, it is my company, so my boss is pretty understanding about these things. However, the client will be paying for the flights. I'll have to determine two things:

#1: Whether they will simply pay me the ~$8,000 for the flight, or whether they actually purchase the ticket.

#2: If I purchase the ticket on my own (and the provide reimbursement = $8,000), if they care what class I actually fly.

Thanks a bunch for all of the replies. I really do appreciate them.

Thanks again,
Tim in Hollywood

ebell

Well, as long as the client knows where his expenses are going to and is fine with it, that's okay. Personally, as a client I wouldn't want to think that someone was pocketing an extra $7000 directly above and beyond the fees I was paying them. But if they agree to it, hey, go for it.

prncess674

You may want to check with the client about who and what airline they fly. I had a client who said we could fly F but they needed to book the tickets because they had a corporate discount with a designated airline. We didn't bill the client for the airfare they paid the bill.

JS

I would imagine the client would care what you do with the $8000. I sure wouldn't pay someone $7000 to sit in coach. That's a waste of money.

If your client is willing to pay for int'l F, and you're the boss, why do you care about a measly $7000? Surely the fees they're paying you are a lot more than that. Unless you got into this business just for the int'l F travel.

SkiAdcock

If I were the client or employer, I would be upset if I was paying for first or biz class, & the employee or contractor turned in the ticket & pocketed the dif.

In fact, I would potentially consider it a firable offense or sever the contract w/ consultant offense, as it is both unethical & stealing if it's done w/out the employer/client's knowledge or consent.

It's turning the expense into a profit area for them, and I'm not there to enrich them/increase their revenue. I'm paying for a legitimate expense. If by some chance I was agreeable to it (as was mentioned in one example above), I would include it as part of W2/1099, as it's clearly revenue/taxable income.

Presumably if I'm sending the person in biz or first, it's either to make sure they're comfortable/fresh/ready to go when they get there, or it's part of their contract & I don't have a choice.

If they're willing to give up the C or F ticket to sit in coach (and subsequent uncomfortableness), then that means they can sit in it all the time, and I can use the $$ elsewhere for something more worthwhile in my bizness.

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Sharon

[This message has been edited by SkiAdcock (edited 06-07-2003).]