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The COVID-19 pandemic introduced many casual travelers to the confusing world of refunds, vouchers and cancellation policies. Expecting to receive cash refunds for canceled flights, many were surprised to receive vouchers instead.
Although specific refund and voucher policies vary from situation to situation, some consistencies (and federal regulations) allow for a few broad generalizations:
Air travel canceled by the customer more than 24 hours after booking will almost always be compensated in the form of flight vouchers, which must be used within a certain period of time.
Air travel canceled by the airline is eligible for a full cash refund, though the airlines will often try to avoid this.
Hotel cancellations are often fully refundable if made more than 24 hours before check-in (except for prepaid/nonrefundable rates), but this varies by booking.
Car rental cancellations are almost always fully refundable, except for prepaid reservations.
Vacation rental (Airbnb, Vrbo) cancellations vary by property.
Air travel cancellation policies are complex but can be understood by separating two factors: when the cancellation is made and who is doing the canceling.
Cancellations made within 24 hours
All flights starting in the U.S. that are canceled within 24 hours of booking are eligible for a full cash refund under Department of Transportation regulations. It doesn’t matter if you book directly through the airline or through a third party booking service: You are eligible for a refund if your flight originates in the U.S. and you cancel it within 24 hours.
However, some airlines make the process of receiving these refunds cumbersome or confusing, sometimes suggesting you accept alternatives to the cash refund. If you are having trouble finding a way to get your cash back online, call the airline or travel booking service directly.
Cancellations made after 24 hours
If you want to cancel a flight more than 24 hours after booking, it is subject to the cancellation policy of that particular airline and fare:
Refundable fares are generally eligible for a full cash refund.
Some tickets, including many basic economy fares, simply cannot be canceled.
Some tickets can be canceled for a voucher refund, minus a cancellation fee.
Others can be canceled for free, but in voucher form.
Now that most U.S. airlines have removed cancellation fees, the most common situation is the last one. You will be able to get a full refund for your nonrefundable flight, but not a cash refund. Instead, you’ll get a voucher or credit for future flights booked within a certain time frame. This isn't ideal, but it’s better than nothing. Just remember to use your voucher before it expires.
Cancellation made by the airline
If the airline cancels or makes major changes to your flight, for any reason, you are eligible for a full refund under Department of Transportation regulations. The definition of "major changes" isn't totally clear, but in general, any schedule change of more than 24 hours should be eligible for a full refund.
However, airlines will often try to skirt this regulation by giving passengers the option to accept a modified itinerary, even if the changes are major. Here’s an email from Singapore Airlines, with our highlight in red:
Because “accept” looks like a default option and the alternative is less prominent, a passenger may not be fully aware of their rights. Don’t fall for it: Always request a refund if the proposed changes aren't ideal.
In many ways, hotel cancellation policies are more straightforward than airline policies. There are no federally enforced cancellation rules, for example. Hotel bookings generally fall into two categories:
Fully refundable rates, which can generally be canceled within 24 hours of check-in for a full refund.
Prepaid, nonrefundable rates.
Most hotel brands offer flexible rates as the default, but prepaid rates are often the choice of consumers, especially when it involves a lower rate. You should be able to see the cancellation policy for your booking during checkout.
Unlike airfare, the value of canceled flexible hotel bookings usually isn't offered in the form of credits or vouchers, but as a direct refund of the deposit amount to your credit card.
This one’s easy: Unless you specifically book a prepaid rate for a car rental reservation, you should be able to change, cancel or modify it without incurring a fee. The rules for cancellations on prepaid rates vary among companies and reservations, but they are often more flexible than nonrefundable airfare or hotel bookings.
Vacation rental brands like Airbnb and Vrbo take a slightly different approach: They offer a range of cancellation policies, from extremely flexible to nonrefundable, and let the hosts (property owners) choose from these policies.
So when booking, look for the specific policy on each property. Here’s an example of Airbnb’s flexible policy:
Refunds from cancellations should come directly to your card — no credits or vouchers are involved.
» Learn more: Cancel For Any Reason (CFAR) travel insurance explained
The bottom line
Canceling travel is never a fun experience, but it can be made all the more challenging when confronted with a host of different rules and conditions for each type of booking. Thankfully, most hotel cancellation policies are fairly straightforward: You can either cancel your booking or you can’t, and you’ll get a cash refund if you do.
However, airline cancellations are a world unto themselves and require a bit more patience and understanding. In general, you won’t get a cash refund unless you cancel within 24 hours of booking, cancel a refundable fare or have the booking canceled by the airline.
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