A debit memo debacle

by Christopher Elliott on September 30, 2004

Q: Last year I flew on American Airlines from Dallas to Greenville-Spartanburg International Airport. Six months later my travel agent called me to say American had billed her $404 more for the flight. She explained that there were certain fare rules in effect that she wasn’t aware of, and that we had no choice but to pay up.

I think it’s outrageous to raise the fare by an additional 40 percent half a year later without a warning. But my agent said if I didn’t make up the difference, the money would come out of her paycheck. So I paid the $404. Can you help me get that money back?

– Leslie Read

A: This is one of the most agonizing cases I’ve ever had to troubleshoot. It’s painful because everyone involved in it is right – and wrong.

American Airlines, like other network carriers, has a set of extremely complicated fare rules meant to separate business travelers from leisure travelers. For example, if you don’t stay over a Saturday night, American’s computers assume you’re traveling on your company’s dime and they charge you more.

Your ticket violated American’s rules. When that happens, the carrier normally doesn’t do anything to the traveler. But it does punish travel agents by issuing a so-called debit memo, which is a request for the difference between the cheaper, illegal fare and an unrestricted economy class fare. If they don’t pay up, American takes away their ability to book future tickets.

American debited your agent. Then your agent billed you.

So why am I so conflicted about this case? Well, for starters, I’ve been trying to mediate a resolution for months. But I’m also troubled because there’s no clear culprit. Everyone screwed up.

Let me explain. American was correct to issue the debit memo. Your agent violated its rules. Period. But the rules don’t make sense, they aren’t fair, and they weren’t clearly spelled out through the travel agent’s computer reservations system. And why did it take six months to send the invoice? Are they using carrier pigeons to deliver the mail?

Same thing goes for your agent. She did the best she could to find you the lowest fare, which was good. But she was incorrect to book your ticket, because it violated American’s rules. She also shouldn’t have asked you to pay for her mistake, even though it was obviously an honest mistake.

You were right to use a travel agent – a competent agent, after all, is your advocate when you’re on the road. But pay her fine? That was her responsibility, not yours.

The travel agent told me her agency “routinely” passes debit memos along to customers. I find that very disturbing. (Even my source at American calls it “out of the ordinary.”) The only reason you should ever pay your travel agent’s fine is when you’ve asked him or her to knowingly book an illegal itinerary – say, a back-to-back or a hidden city ticket.

Here’s how I see it: You hired an agent to be your travel adviser. You paid her a ticketing fee for professional services rendered. The buck stops with her.

End of story.

I conferred with my American Airlines contacts, and they promised an airline representative would call your agent to explain what happened and to offer a resolution. Basically, the deal would involve an appeal of the debit memo. Your agent declined, fearing American would retaliate against her agency if she appealed.

I think your agent should refund the money you paid for her debit memo, but you aren’t willing to ask for your money back, in part because she is a family friend. And so in the end, unfortunately, you’ll have to take this loss. I’m sorry.

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