Travel&Vacation

Most big U.S. airlines tell you even their nonrefundable tickets are reusable. This means that if you cancel your flight, you won’t get your money back, but you can use the value of your ticket toward a future ticket, less an exchange fee. Of course, you have to cancel before the departure date. But that promise has become a bit iffy lately. Some of those airlines charge what amount to punitive exchange fees—high enough to call into question the airlines’ basic honesty in advertising reusable fares.

Currently, if you cancel a nonrefundable ticket, only Southwest allows you to apply the full value of the ticket toward a future trip, with no fee at all. According to the most recent information I have, for domestic travel, you pay $75 on AirTran, Alaska, or Virgin America; $80 on Spirit; $100 on Delta, Frontier, JetBlue, Midwest, or Northwest; and $150 on American, Continental, Hawaiian ($30 for inter-island), United, or US Airways. You can get additional information by reading SmarterTravel.com’s Ultimate Guide to Airline Fees, updated regularly. Don’t be surprised to see further hikes in those fees as the airlines keep squeezing more and more extras out of their customers.

International exchanges are even more complicated. Depending on airline and destination, exchange fees can be as high as $250. Moreover, some airlines allow exchanges, even with a fee, on only the return portion of a round-trip ticket. And many low-price international tickets are totally nonrefundable. Also, some tickets have always been totally nonrefundable and not reusable, among them many consolidator discount tickets and those you buy through Hotwire or Priceline.

Ticket exchange has a spotty history. When nonrefundable tickets were first introduced, they were totally nonrefundable under ordinary circumstances, but refundable in the case of an emergency. However, the airlines rapidly found that savvy travelers could easily obtain or forge doctors’ notes or other emergency documentation, and ruling on individual cases got to be a major headache. Partly in response to this problem, the airlines decided to keep the cheap tickets nonrefundable (no money back), but make them reusable with a fee. Initially, most lines charged only $25, and, at that level, the system was fair and practical. But as the airlines became increasingly greedy, most hiked fees to reuse tickets to their current onerous levels.

As a partial offset to the fee increases, some lines still allow no-fee cancellation in the very limited case of the death of the traveler, a travel companion, or a close family member, with a death certificate required. In other cases, however, if you ask for a refund for what you believe is a reasonable reason and the airline refuses, the airline’s usual position is, “that’s what travel insurance is for.”

For now, Southwest is the obvious consumer-friendly champ. Not only does it still allow you to retain the full value of your ticket if you have to cancel, but it also sells fully refundable senior fares (for travelers 65 and older) that are usually pricier than the cheapest options, but less than refundable tickets for travelers of any age.

Clearly, you’re at some financial risk any time you buy any nonrefundable ticket (except on Southwest). If you have to cancel a trip, at best you’re on the hook for a fee that can easily represent more than half the price of the ticket. And at worst, you could be out the entire ticket price. For that reason, you should seriously consider trip-cancelation insurance any time you pay a lot up front.

Regular travel insurance, bought separately, usually starts at around 5 percent of your total payments, but the price increases for older travelers—sharply for travelers over 70. That premium typically pays for a bundled policy including cancellation, medical, baggage, and other coverages.

Many airlines sell a version of regular travel insurance, but in some cases rates may be lower. Through American, for example, the price of a bare bones policy is 5.5 percent of the ticket price, regardless of age.

As an alternative, some online ticket agencies sell more limited air ticket insurance, typically for a fixed price regardless of your age or the ticket price. It’s $15 on Expedia, for example, and $16 on Priceline.

(Editor’s Note: SmarterTravel.com is a member of the TripAdvisor Media Network, an operating company of Expedia, Inc. Expedia, Inc. also owns Expedia.com and Hotwire.)