Your flight has been cancelled. Your hotel loses your reservation. Your car rental company is out of vehicles.
So what does the company do? It reaches into your favor bag and provides you with a voucher or “Goodwill” credit that expires in a year.
It’s called coupon justice, and it’s a disturbing trend quietly plaguing the travel industry. Coupon Justice is a fast automated system for dealing with legitimate customer complaints.
And no, that’s not justice at all. It’s couched in corporate self-preservation and penny-pinching, customer-friendly language.
Coupon Justice is Everywhere
The practice has faltered since the pandemic, with companies turning to vouchers to raise cash. Now, years later, they’ve discovered another advantage: Travelers don’t always use scrip. And the company keeps the money without giving them anything.
“It’s kind of beautiful,” says Joe Cronin, president of International Citizen Insurance. “Airlines get interest-free financing. You get stuck in their ecosystem. Nobody is created perfect.”
But these partial measures are not compensation. They’re corporate faux pas in the form of business casual, and you don’t have to fall for them on your next trip.
Here’s why companies love vouchers (and why you should hate them)
Here’s how it works in practice: Let’s say something goes terribly wrong in your $180 hotel room, like constant construction noises or a broken shower. Instead of giving you a refund for the night, the hotel gives you a $50 voucher toward a future stay.
There are two problems: First, there aren’t $50 rooms, so you’ll have to pay more to cash in on this offer. Plus, the hotel knows that there’s a good chance your voucher will sit on your desk until it expires. It should have paid you $180, but instead, you have nothing of real value.
Let me be clear: Vouchers solve the company’s problem, not yours.
When you receive a voucher in lieu of a refund, the company keeps your money on its books. The value of the voucher does not immediately appear as a loss on the balance sheet. It becomes a liability, but the company doesn’t have to pay until (and unless) you cash it out.
And if you don’t spend it? The company wins twice: It keeps your money and avoids paying you at all.
“Coupons allow the wrongdoer to retain his or her ill-gotten gains,” explains Danny Caron, author of “Your Lovable Lawyer’s Guide to Legal Wellness: Fighting Back Against a World That’s Bent on Cheating You.” “Everyone knows how often gift cards go unused, which is the company’s exact goal. They drive extra business to wrongdoers, with victims often spending more than the value of the voucher.”
Can airlines force you to accept vouchers in lieu of a refund?
Under Department of Transportation (DOT) rules, when airlines cancel flights or make significant changes, they are required to provide a prompt refund to your original form of payment. But an airline may also offer a voucher, and if you say yes, it’s a done deal. Many passengers are not aware of this. So when an airline offers a flight credit, travelers assume it’s their only option.
it.
“Airlines offering only vouchers without an actual cash alternative violate these legal obligations,” says Eric Napoli, chief legal officer of AirHelp.
Hotels and booking sites operate in a legal gray zone. Some strict rules govern their refund practices. They will increase the credit unless you back out.
How to fight back – and win
Vouchers are not indispensable. You can get a real refund if you know what to do.
- Start with reliable documentation. Ari Sibari, who works with tour operators to resolve refund disputes, swears by a simple habit: Document everything. Note the dates and times of any delays or cancellations. Take photos of receipts, vouchers and anything else relevant. “Use clear language,” says Sibari, travel business consultant at Atlasspark. “Keep everything in writing rather than over a phone call. Take screenshots of the terms, note the date and time. Don’t aim for perfection, aim for immediacy.” Good documentation greatly increases the chances that your case will be protected.
- When a company offers you a voucher, refuse it in writing. Use the phrase “breach of contract” or “failure to provide service as promised.” Request a full refund on your original form of payment. Keep a copy of that email.
- If they insist on giving you a coupon, go ahead. Contact a manager. If that doesn’t work, file a complaint with the DOT (for airlines) or the Federal Trade Commission (for booking sites). If it is outside the US, check with the appropriate country’s aviation regulator or consumer protection agency.
- If that doesn’t work, dispute the charge with your credit card company. When you have a clean paper trail – emails, screenshots, receipts – you’re more likely to win.
what needs to change
I have been watching this trend since I started advocating consumer affairs in the 90s. And I am sure of this: Coupon justice will not end without regulatory pressure.
Here’s what might actually work:
- Limit voucher options. If governments required airlines to offer cash refunds and only give out vouchers upon request, this would stop some (but not all) fraud.
- Reveal everything. Consumers need to be aware that for many travel credits, the actual redemption rate for vouchers is low. Additionally, businesses should also communicate expiration dates or any other limitations in advance.
- Remove expiration dates. Also, eliminate any blackout dates and minimum spend requirements. Allow credits to be used together or divided into multiple purchases.
Most importantly, we have to enforce the existing rules. DOT’s refund requirements are clear. Europe is also like this. But enforcement is weak, so companies can sometimes ignore them.
Coupon justice is no justice at all. This is another term for “we’re keeping your money and hope you won’t fight back.” But you can’t win if you don’t try. And companies are betting you won’t.
Christopher Elliott is an author, consumer advocate and journalist. He founded Elliott Advocacy, a non-profit organization that helps solve consumer problems. He publishes Elliott Confidential, a travel newsletter, and Elliott Report, a news site about customer service.