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Delta Air Lines faces a multi-million-dollar class-action lawsuit over allegations that it uses deceptive techniques to stop passengers from getting full cash refunds on premium, fully refundable tickets. According to the lawsuit, Delta has designed its website to push electronic credits and make it more difficult for passengers to select full refunds.
The claim states that the airline’s website hides the option to receive cash refunds and instead pre-selects travel credits, which it says violates United States consumer protections set by the Department of Transportation (DoT).
The Five Million Dollar Lawsuit Against Delta
As per details of a class-action lawsuit filed in New York on May 1, the Plaintiff, Svetlana Sky, accuses Delta of breach of contract, violations of New York business law, negligent misrepresentation, and unjust enrichment. As first reported by Paddle Your Own Kanoo, Sky said the airline had steered her toward accepting expiring e-credits instead of clearly offering the full cash refunds she was entitled to after purchasing a fully refundable fare.
She stated that the airline forced her to accept “inferior e-credits” when she wanted to cancel her tickets, which limits the usage of these credits to only Delta and has a short expiration date (valid up to one year). Additionally, it states that the airline’s cancellation and refund page is designed to pre-select the e-credits option and make customers believe that it is the only refund option available, while hiding the cash-refund option elsewhere on the page.
In the suit filed, the Plaintiff has made clear that such practice by the airline constitutes what the Federal Trade Commission (FTC) defines as “illegal activity using tricks and traps to hide information”. It estimates that the value of this case could be worth $5 million in the state of New York alone. The complaint also identifies how the airline values travel credits compared to cash:
“Delta recognizes a substantial economic difference between cash-equivalent credits and carrier-limited travel credits. In fact, Delta values a cash refund at twice – 2x – the value of an e-credit on its own platform.”
Why Do Airlines Prefer To Refund E-credits Instead Of Cash?
While at first glance, a cash refund or an equivalent travel credit might appear to be of equal value, in most cases, it simply is not true. A cash refund, as the name states, will see the airline refund passengers in cash, in the original form of payment. But with travel credits, these are credits that the airline applies to your account, which can be used in the future.
Travel credits usually have an expiration date — if not used during this period, it is equivalent to the airline pocketing the cash, without providing the passengers with any flights or services equivalent to the credit. Another reason why airlines prefer to offer travel credits is to retain passengers, as credits can only be used in-house.
Considering the above factors, it is easy to understand why airlines would prefer to offer passengers travel credits. It is also why, in the above-mentioned lawsuit, the Plaintiff notes that Delta values cash refunds two times more than the travel credits it offers to passengers as alternate refunds.
“Is Anybody Working?”: Delta Passenger’s Gate Rant As Airline Cancels 400+ Flights
Delta’s record of operational excellence has been tested in recent months.
Better Consumer Protection Since 2024
While previously the airlines in the US were able to set their own refund policies, things changed, and airline refund policies became standardized in 2024, when the United States Department of Transportation announced the final rule on airline refund policies and set defined scenarios under which cash refunds had to be automatically issued to the passengers. This ruling made it easy for passengers and consumers to obtain a refund when airlines canceled flights or made changes to operations that resulted in significant delays to flights or services.
A key point in this ruling was that, for the first time among US airlines, there was a set definition for what could be considered a significant delay or change to service, with the DoT stating that, for domestic services, it is a change in flight times of three hours or more, while for international services, it would be a change exceeding six hours. Additionally, any changes in the departure, arrival, or connecting airports will also be considered significant changes, and passengers will be eligible for refunds.
Since then, the DoT has also set up a dashboard that includes details of the airline policies and commitments of all major US airlines when it comes to flight cancellations and significant changes to service. By doing so, the government has made it easier for passengers to refer to their rights in the event their travel is disrupted.
