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While traveling for work, I was downgraded from business class to economy class. The airline will have to compensate me for this change, in cash, vouchers, or miles. Am I personally entitled to this refund, or should it go to my employer?

On the one hand, my employer paid for the flight and should only pay for what was actually received, so perhaps the company should get the refund. On the other hand, the company had already paid for the business class seat, and I was the one who had to personally deal with the lower-class fare, so perhaps I should get the refund myself. If it makes any difference, I was traveling on the weekend, so the company didn't lose any productivity in terms of me not being able to work on the flight, or even the next day from me being less rested.

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    @JoeStrazzere - what you're implying is a intentionally defrauding the company: the OP was inconvienced by the airline. His company might let him keep the refund in return for the inconvenience. – HorusKol Mar 27 '17 at 2:22
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    @HorusKol I think JoeStrazzere was just trying to make the ethical issue in the original question clearer – Ernest Friedman-Hill Mar 27 '17 at 2:48
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    @HorusKol, It's not fraud if you have explicitly informed the company, and gotten it approved at the appropriate level. Fraud, is a legal term. What actually qualifies as fraud will vary by jurisdiction. However, most require that you have given false information, made a false representation, etc. and have received some value to which you would not otherwise be entitled. Accurately disclosing all pertinent facts, of which you are aware, to all parties is generally sufficient for something not to be fraud. The actual requirements are something for which you should consult a lawyer. – Makyen Mar 27 '17 at 3:34
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    @HorusKol You misparsed Joe's sentence (it had an ambiguous then and possible lack of comma, if you're down with serial commas). "... you get the company to pay for business class, then downgrade yourself and pocket the difference" was all one clause. He meant to ask your boss that entire thing, as in "Hey boss, is it OK if you pay for business class and then I downgrade myself and pocket the difference?" – Jason C Mar 27 '17 at 8:03
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    @jasonc I know what Joe meant and did not misparse the comment - I may have been terse in my response though. There is a difference between taking an action to deliberately pocket money the company has spent to provide you with some service and taking compensation for being disserviced. Either way ask your boss, but one will be viewed more favourably than the other. – HorusKol Mar 27 '17 at 9:43
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It would come down to company policy I suppose (consult your employee handbook, direct supervisor, the person who coordinated your travel, HR, etc); but I'd be shocked if there were any that let you pocket the difference.

  • I have seen some that do, but have never worked for a place that does. I thought it was a loophole in their process in that they just paid the first projected amount and never went back for the final amount...although that backfires when there is an unforeseen expense. – mutt Mar 26 '17 at 22:30
  • @mutt broken process seems a lot more likely than intentional. OTOH them not fixing it after a screwup gives an employee a windfall strikes me as rather surprising. – Dan Neely Mar 26 '17 at 22:43
  • yes...it was suprising to me to and not a company I wanted to work for due to other "off" policy and information...whoever was paying the bill wasn't setting the policy and didn't look... – mutt Mar 26 '17 at 22:48
  • @DanNeely - I was once bumped from an overbooked flight and ended up on a different flight home on a business trip - my company let me keep the compensation payment from the airline - partly because the airline refunds the named person on the ticket with a cheque, and partly because it was me that was inconvenienced. All that the OP can do is ask... – HorusKol Mar 27 '17 at 2:21
  • On the other hand; OP might have refused to fly economy in the first place. I would decline anything less than coach long for sure. – Joshua Mar 27 '17 at 3:06
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If you want to be in the clear here, I would strongly recommend you check with your manager. Some general rules of thumb:

Accepting cold hard cash is likely a no-no, it's essentially a refund of the company's money to you personally and that's a very slippery slope ethically if you don't tell them and for accounting, taxes, etc if you do tell them.

Accepting miles, on the other hand, is likely fine. Most (but not all!) companies let employees keep theirs as a perk of business travel, and if you lost your company-paid biz seat this time, you can use them for a points-paid biz seat next time, so the karma balances out. They're also off the company balance sheet and don't cause the same kind of accounting headaches.

The vouchers are somewhere between the two: much more fungible than points, but not quite cash either. Most bosses would not object to you taking them and using them for an upgrade the next time the company only pays for economy class, or (points-like) for leisure travel, but selling them on eBay would be pushing it though.

  • I've seen train services refund where they recredit the online user account (not bank account). This feels like between voucher and and cold hard cash.This is a grey area... – josh Mar 27 '17 at 10:03
7

I gather that you don't have clear instructions available. That means that you should ask about it before doing anything else. People who write company policy can't come up with every possible scenario at once (or even in a few years). Give them the chance to clarify it if they feel that this event warrants it.

The company might not receive information about the refund, but think about what happened if they did. I doubt they'd be pleased to learn that you pocketed that money without telling them anything. It may affect the whole impression they have of you as their employee. Small things like this might escalate to unknown proportions depending on how your superiors perceive the situation.

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If you work for a large company, then it is very likely that the company's procurement team negotiates with several airlines on an annual basis for discounted rates. I'm pretty sure terms would allow for flexible booking, so the change of ticket to economy is probably invoiced after the fact. In terms of invoicing, it may not negotiate on a ticket-by-ticket basis.

Your case sounds like a gray area. I would say that if you feel comfortable talking to your manager about your line of reasoning, then go for it. If there is a company booking team you can ask, I would try that also to get clear on the rules. I do not think it is worth it to be flagged for something like this.

1

It would depend on what kind of compensation. I wouldn't be surprised if there is no company policy because nobody thought this could happen.

Let's say the company could have booked you on a cheap flight, but was nice enough to book a nicer, more expensive flight, except that didn't work out. They are still buying for the normal flight, which they could have booked in the first place. I don't think they would pass the compensation for this on to you.

On the other hand, if they run out of food, or worse you get food poisoning, or the heating breaks down, or something similar, that compensation should go straight to you. Extreme case, steward spills red wine on your $1,000 jacket, or the airline loses your luggage: Of course that compensation should be solely yours.

And then there is the possibility that you booked the flight your self, got your expenses paid, and the compensation arrives later in your bank account (because your bank account booked the flight) and nobody in the company knows about it. That would make it possible to keep the money, but that's a risky move if someone finds out.

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    But they booked that business class seat for me - they felt I was worthy of receiving a nicer seat, then the airline took it away. The company didn't lose the value, I did. I checked my company policy, and though they don't specifically address this situation, they do say that I can accept voluntary denied boarding compensation (if it doesn't affect my work schedule) and it's mine to keep. – Johnny Mar 27 '17 at 4:16
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    @Johnny: If, when your company booked your seat, business class were full up and only economy seats available, would the company have booked an economy seat then sent you the difference in cost as cash? My point is that, in fact, nothing was "taken away" from you at all. – Lightness Races in Orbit Mar 27 '17 at 14:54
  • @BoundaryImposition - They would presumably tell me that they couldn't find a business-class seat for me, and presumably give me the option of rescheduling that morning meeting at my destination after I fly an uncomfortable 12 hours to get there in economy. While if the airline takes away that seat, I may not have that option, the meeting is already scheduled and I need to be there. – Johnny Mar 27 '17 at 18:01
  • @Johnny: You work for a very accommodating employer! They'll shuffle around your actual work just so they can spend more to send you in luxury? Blimey. FWIW I fly 12 hours in economy all the time and it's not like living a life as a battery hen. I think maybe lose the privilege a little!! – Lightness Races in Orbit Mar 27 '17 at 18:14
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I work in Sweden and one of our largest companies has the following travel policy: If the trip is > 12 hours in total, then business class is the default option. Any employee that wants to down-grade the ticket and keep the difference in terms of cash/miles/whatever is free to do so. So, to answer your question, to me, the money belongs to you. Your employer has already paid for the business class so why should they get Money in return when you had to pick a less comfortable flight?

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    That would be a perfectly legitimate answer if the OP worked for the same company as you. – Dmitry Grigoryev Mar 27 '17 at 10:29
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    Of course, the point is that there ARE companies with policies like the one I mentioned, so suggesting a solution like "keeping the Money", is not totally crazy. That's what I meant. – Niclas Mar 27 '17 at 10:40
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    That's not what you have written in the answer: "the money belongs to you". – Dmitry Grigoryev Mar 27 '17 at 10:44
  • Presumably you have to pay tax on this? – Neuromancer Mar 27 '17 at 23:37
  • I wrote "to me, the Money ...", as in "according to me" – Niclas Apr 5 '17 at 11:01
0

It's usually fine to take the cashout, but be clear about it to your boss and the (more importantly,) taxman.

A lot of discussion here is regarding whether or not it is ethical/legal to take the cashout on the business' purchase. While it is true that in some countries this is considered a "fringe benefit" because the cash gained probably isn't any longer used for work... This in itself certainly isnt fraud.

If you were a politician in Australia booking business flights all over the country when you never intended on taking them - then getting credits later on, this has been proven as Fraud... however the other general idea that "it's already paid for, if YOU choose to cash-out your loss" is perfectly acceptible in most countries - so long as you are chalking it up to taxable fringe-benefits.

Subject example: Any popular international speaker will have a good idea of prices to travel to each country (usually business class) so when they are offered expenses to speak at a conference, they ask for the cash - and then can get there however they want. I know several University-level lecturers who are experts in their field who do this, and often downgrade so they can bring their spouse etc. The key is being clear in your tax, so that if the company gets investigated for transferring cash, it is documented that you have taken it as pay, instead. No money is being "scrubbed off the books", and you are not an Australian politician.

recent example: Speaker Troy Hunt gives many examples of why it's easier to "leave it to the speaker" to arrange their travel (etc) and most experienced event organisers are familiar with these costs also... so if it's paid to the speaker, it's what is agreed as fair, and they won't care how the cash is used so long as the speaker performs to their expectation.

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