Another Reason Miles Are Better than Cash: Free Cancellations

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Using miles to book trips instead of using cash has tons of advantages:

  • Easier access to First Class and flat beds: An international First Class ticket can cost $10k or the amount of miles you can get from opening a pair of credit cards.
  • Better open jaw and stopover rules: Few revenue tickets allow you to stopover without increasing in price. Many mileage awards allow free stopovers and open jaws for no extra miles.
  • Some mileage awards can be cancelled for free or close to it.

This last advantage–free or very cheap cancellations–is an oft-overlooked benefit of certain mileage programs.

I can afford this seat with miles, but not cash.
I can afford this seat with miles, but not cash.
  • Which program allows completely free cancellations?
  • Which programs allow cheap cancellations, as cheap as $2.50?

Southwest Rapid Rewards Awards

As commenter UAPhil has pointed out numerous times on this blog, Southwest Rapid Rewards are the gold-standard when it comes to cancellations. Here’s his take:

Rapid Rewards points bookings are fully refundable, with no cancellation fees or penalties, and no availability hassles. (Southwest revenue bookings have no change fees, but they are non-refundable with some fairly strict rules on when they must be re-used, so points are actually a more valuable currency than dollars for making Southwest bookings.)

It’s true that if you book a Southwest award for 10k points + $5.60, and you later cancel it, you will get your 10k points back and the $5.60 will even be returned to you as a credit toward a future booking. (I think I’ve even succeeded in having Southwest refund the $5.60 to my credit card, but I can’t find a record of it.)

Since Southwest awards are fully refundable, you can speculatively book with impunity.

British Airways Avios Awards

Last year I booked two friends tickets to visit me in Hawaii from Los Angeles. For each friend, I booked two awards:

  • Los Angeles to Oahu for 12,500 Avios + $2.50 per person. (Domestic airfare taxes have since increased to $5.60 one way.)
  • Maui to Los Angeles for 12,500 Avios + $2.50 per person.

One friend had to cancel.

I called British Airways to cancel his awards. I got back my 12,500 Avios on each award and lost my $2.50 on each award. That’s an effective cancellation fee of $2.50 on each award!

The fee is “supposed to be” $40.

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If your taxes and fees are greater than $40 and you cancel, British Airways will refund your Avios and taxes and fees less the $40 fee. But if your taxes and fees are less than $40, you just forfeit whatever your taxes and fees were and get your Avios back.

Since I pretty much exclusively use Avios for direct domestic flights with $5.60 in tax per segment, my Avios cancellation fee is routinely $5.60.

Lufthansa Miles & More Awards

Miles & More awards have a $60 cancellation fee. That’s $140 cheaper than the cancellation fee on a United award with the same flights.

And it’s certainly much better than trying to cancel a non-refundable cash ticket.

Singapore KrisFlyer Awards

Singapore Airlines awards have a $20 change or cancellation fee. My friend booked one of those super cheap awards between South America and the United States with Singapore miles, and when he decided to change the dates of his stopover in Cancun, he paid just $20 to do so.

Try doing that with a cash ticket!

Recap

The main reason I use miles is to enter into otherwise inaccessible First Class cabins and stretch my travel further. I also love the lax routing rules on many awards that have let me see seven cities on one trip (although that loophole has now been closed.)

Beyond those big things, though, don’t forget to take advantage of the free or cheap cancellations that some types of miles offer. Speculative bookings have a lot of value when your plans aren’t fixed and great award space (or a cheap fare in the case of Southwest awards) is available.

As cash tickets have ever worse change and cancellation rules, award tickets hold extra value for their lax rules on the matter.

 


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15 COMMENTS

  1. Good discussion. Alaska has a $125 change/cancellation fee, but it is waived if the action occurs more than 60 days out, so this plan deserves honorable mention in the flexibility category. There’s not much risk in booking speculatively with Alaska as long as you cancel or change soon enough, if necessary. There is a $25 nonrefundable Partner Award Fee, though, if using a partner in the booking.

    I can understand change and cancellation fees in general. Too many people booking limited inventory speculatively creates diminishing value to the airline and frustration to others who may be seeking reward seats that are being held speculatively.

  2. With Avios, I was not able to cancel within 24 hours without paying $25 + $40 fee. This was a 12,500 avios flight so it was a questionable use of funds. I just let the ticket expire without canceling. Is there anyway to take advantage of that unused flight?

  3. The BA site doesn’t make it very clear what the penalty fees might be. (I think the fees listed are for BA flights departing US). “For non-British Airways bookings different fees will apply.”

    So, Scott are you sure you didn’t just get away with something or is this a quirk in the system? I guess I’ll have to call them and find out for sure (I don’t mind losing the 2.50 but 50 + 25 (although less than US fees) is still not worth it hold a ‘potential’ flight).

    • I’m not sure they’ll give you the right answer. Others have reported what I’ve reported. Deals We Like had the same experience.

    • One way to get around the AA cancellation fee is to re-book your flight for sometime waaaaay out in the future. Invariably, there will be a schedule change that will not fit your “schedule”. When that happens, call AA and say the new schedule won’t work for you. They will then let you cancel for no charge. This has worked for me on several occasions.

      • It’s a good plan since changes >21 days out to date only are free. Keep in mind you can only change the flight to up to 12 months from original booking date.

    • American: $150 fee for first ticket + $25 for each additional ticket cancelled at the same time
      Delta: $150 per ticket. No cancellations within 72 hours of departure

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