Being asked to return flight reimbursement after conference was cancelled and we received flight credit

Question

My wife was planning to attend a conference next week for work. She booked her travel herself and was reimbursed by her company. Because of COVID-19 the conference was cancelled. Her company says that she has to cancel her flight, and if she receives a credit then she is expected to return the cash reimbursement.

However, flight credits from the airline are non-transferable, expiring credits. The end result is we are out the cash price of the flight and we have a flight credit we may or may not have an opportunity to use.

Do we have any grounds to push back on this request and, if so, what is the best way to go about doing so? Note, if it's helpful, that there are at least two others in her company in the same circumstance that are also frustrated with this request.

Answer 1

Do we have any grounds to push back on this request, and if so what is the best way to go about doing so?

Your wife should talk with her company, explain the situation, and ask how she should proceed.

Clearly, your wife should not benefit from, nor lose money, because of this cancellation.

Perhaps the company will decide to forgo reimbursement until she either uses the credits, or they expire. Perhaps not.

Either way, she needs to discuss it with the appropriate parties at work. If the company is really this rigid, she should let the company book her travel in the future, so that they bear all the risk.

Note that some airlines today would be more forgiving about COVID-19 related cancellations than others. And perhaps in the future, business travelers need to pay for tickets that can be canceled for other than just a non-transferable credit.

Answer 2

There some missing details that make a huge difference. By 'credit', they might be credit on the payment card, in other words, a refund. In that case, of course, you would repay the reimbursement.

Being a road warrior for ~20 years, the companies have always born the cost of disruptions so it would be highly unusual to put the burden back on the traveler. On more than one occasion, I've had ticket value or vouchers basically given to me because the company has no ability or desire to figure out what to do with them.

Another point, every voucher I've received has been transferable. So if any 'credit' is in that form, just hand it over. Also, while a ticket is often not refundable, any unused value can be applied to other tickets and usually for other travelers. So she can 'return' the unused ticket and let them deal with it.

The cancellation should not cost you anything.

Answer 3

A reasonable outcome would be that you, as the employee, don't end up losing money, and don't end up making money. That's because you are just an employee. The company on the other hand has to carry all the risk.

Let's say the flights cost $1,000, and the refund is $1,000 credit that you can use for other flights with the same airline. Then what should reasonably happen is that you tell your company about it, if you go on another company flight then it would be paid out of the $1,000 credit, if you spent $200 on a private flight you pay it out of the credit and give $200 to the company instead of to the airline (but if you find a cheaper flight with another airline for say $150 you take the cheaper flight). If your credits can pay for the flight of another employee, that would make things easier.

But the main thing is: You should neither be out of pocket nor make money from this.

Answer 4

Last year my company made a similar request when I canceled a conference at the last minute when my daughter went to the hospital. It wasn't really expected that I would be able to get a refund on my air fare, especially since the company policy is to get the cheaper non-refundable fares, but they wanted me to try, and were perfectly okay when the attempt wasn't successful.

Interestingly, both the conference tickets and the hotel were also technically non-refundable at that point, but they both happily refunded me under the circumstances, so it was definitely worth the phone call.

I understand my company's policies may be different than yours, but I think you may have misunderstood the request, and it is worth clarifying and just saying, "I made the phone call, but I could only get a non-transferable credit, which I will use for business purposes if the opportunity arises."

Answer 5

This answer assumes the OP is correct in describing the credit as "non-transferable". If it is possible to do so, the OP's wife should simply transfer the credit to the employer.

If that is not possible, here is an argument your wife and colleagues may be able to use. Suppose the airline, instead of the non-transferable credit, had given her cash but only for 50% of the ticket price. I assume the employer would have only expected the 50% back, not the full cost of the ticket.

She should reimburse the employer the value of what she received from the airline. The value of a non-transferable expiring credit is the product of the credit amount and the probability of her using it before it expires. The fact that the value of the credit is significantly less than its face amount is the reason airlines prefer to give flight credits rather than cash payments.

Given conference and flight cancellations, and general travel avoidance, the probability she will use it is close to zero, making the value she received from the airline close to zero.

I think she should offer her employer the option of waiting until she either uses the credit or it expires, and paying the employer value of any flights she takes on the credit. That avoids the difficulty of estimating the probability of use to calculate the value now.

If they insist on payment now, she should insist on only paying the credit's current expected value, taking into account the low probability of use. That might be 1% of the face value of the credit, if she has a one-in-a-hundred chance of using it. If she is sure she won't use it the value is zero. The only case in which the value, today, of the credit would be equal to its face amount is if she has definite travel plans, using that airline, that will use the full amount, so the probability is 100%.