An American Airlines customer bought a $1,000 ticket and later refunded it. American returned $100,000 instead.
The ticket had been purchased outside the United States and American made a currency conversion error, returning funds to the American Express card that had been used.
Windfall, right? Not so fast. The customer knew the money wasn’t theirs. They tried to get American to see their error. They were told everything was correct.
They escalated things up to American’s Revenue Protection group, and even emailed top executives. They filed a ‘dispute’ about the refund with American Express.
- The refund gave them a negative Membership Rewards balance of 500,000 points when Amex deducted the $100,000 charge at 5x on airfare for the refund.
- They worried about having to send a check to American, and getting stuck losing half a million Amex points because of American’s mistake. On the other hand, if they were hit with a new charge to reverse the refund, they would be excused to a huge currency conversion risk.
If exchange rates moved against him, he’d lose thousands of dollars based on the difference between when the $100,000 refund was processed and changed value of the currency when the funds were taken back. (He could also gain from the foreign currency spread, but he shouldn’t be stuck with foreign currency risk because of American’s mistake.)
- And the customer was concerned about having his account closed, or being subject to a financial review because of the massive credit balance.
On the one hand, withdrawing the $100,000 (asking American Express for a check for the balance) and sticking the money into a high yield savings account would at least earn them interest during the time it takes for this to be resolved.
On the other hand, it’s not his money and he feared taking the money out would look suspicious.
Initially, American was dismissive saying that the refund was processed correctly. Then they understood that the refund should have been $1,000 – blissfully unaware that $100,000 had been processed.
The customer was proactively honest, trying to return the money against a wall of frustrating incompetence.
At what point do you give up? And if you simply say “I’ve done my best” you still have to worry about American coming back on this months or even years later.
Eventually, the customer reported succeeding in getting this escalated. They’ve received acknowledgment of the error, though it’s not clear how long it will take to get this fixed.
Ultimately proactive honesty was the best strategy, but the time, effort, and stress that went into this seems unlikely to be compensated.
It was a lot of work for the customer to make American Airlines whole with little reward other than removing the cloud of stress from the airline’s mistake.
All things equal, this mistake seems pretty small compared to what American’s banking partner Citi did, crediting a customer with $81 trillion instead of $280.
Given the amount, at least Citi caught it 90 minutes later. That would have generated a nice return in a high yield savings account.
