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About Those Hong Kong Tickets for 4 United Frequent Flyer Miles …

About Those Hong Kong Tickets for 4 United Frequent Flyer Miles …

Back in July, in what was obviously an example of a “mistake fare,” United offered MileagePlus award tickets to Hong Kong for four (count ‘em!) miles.

Naturally, legions of opportunistic shoppers jumped on the deal, knowing full well that the offer would be terminated as soon as United realized its mistake.

United indeed terminated the offer. More controversially, they contacted those who booked the low-cost tickets and offered to either rebook them at the correct price or cancel their bookings and redeposit their miles.

That raised the hackles of some, who took their displeasure to the Department of Transportation (DOT) in the form of a formal complaint, claiming that, once published, United was bound to honor the misstated prices.

The DOT has considered their complaint, and last week communicated its ruling, as follows:

We have completed our review of United’s conduct regarding its recent Frequent Flyer fare sale to Hong Kong from the United States on its website. Our review found that the actual price of the advertised fare was never clearly stated during the booking process, thereby creating ambiguous circumstances in which it could be reasonably interpreted that the actual price of the fare was significantly more than the amount consumers paid at the time they attempted to purchase the fare, e.g., $40 plus 4 frequent flyer miles. Therefore, we are not able to establish that consumers, in fact, paid the full amount of the offered fare at the time of purchase. Accordingly, the evidence does not support a finding that United engaged in an unfair and deceptive practice in violation of the relevant statute. Please note that, regardless of the outcome of our investigation, consumers are free to pursue claims (e.g., a breach of contract claim) against the airline in an appropriate civil court for monetary damages and other remedies particular to their situation.

The DOT ruling is a very narrow one. It turns on the fact that there was allegedly some ambiguity in United’s statement (or misstatement) of the award price and therefore would-be buyers should have recognized that the intended price was much higher.

Indeed, pretty much anyone who saw the four-mile price had to have known it was a mistake. But they knew it not because of any ambiguity in what United said, but because it was so preposterously at odds with the published price for a Hong Kong award ticket.

And while the DOT absolved United of engaging in “an unfair and deceptive practice,” it left open the possibility that lawsuits filed in civil court against United might be pursued successfully.

In the end, the DOT ruling strikes a blow for common sense, although it isn’t grounded in common sense reasoning.

Personally, I’d like to see a precedent set that says clearly and unambiguously that airlines cannot be required to honor fares, whether in dollars or miles, that are self-evidently mistakes.

This isn’t it.

Reader Reality Check

What say you: Should airlines be required to stand by fares that are obvious misprints or computer glitches?

  • j mat

    If a store advertises a very low price, and the price is a mistake, the store is required to provide the merchandise at that advertised price until the store posts notices that the advertisement was in error. While any sane person would recognize an extremely low cost and realize it was probably an error, the onus is not on the buyer but on the inability of the seller to adequately regulate itself. The DOT used a technicality to absolve United. Hmm, seems like the government is all for “big business” and not the middle class person. Now isn’t that a switch in these political days?!!

  • j mat

    If a store advertises a very low price, and the price is a mistake, the store is required to provide the merchandise at that advertised price until the store posts notices that the advertisement was in error. While any sane person would recognize an extremely low cost and realize it was probably an error, the onus is not on the buyer but on the inability of the seller to adequately regulate itself. The DOT used a technicality to absolve United. Hmm, seems like the government is all for “big business” and not the middle class person. Now isn’t that a switch in these political days?!!

  • http://www.facebook.com/gerry.crawford.3 Gerry Crawford

    When I read the teaser to the story, “…the DOT strikes a blow for common sense.”, I just took it for granted that they ruled in favor of the passengers, not the airline. I was about to post that the lead was in error when I realized that Tim actually thinks that United should not have to honor the price it advertised.

  • http://www.facebook.com/gerry.crawford.3 Gerry Crawford

    When I read the teaser to the story, “…the DOT strikes a blow for common sense.”, I just took it for granted that they ruled in favor of the passengers, not the airline. I was about to post that the lead was in error when I realized that Tim actually thinks that United should not have to honor the price it advertised.

  • BJP

    Airlines, like other businesses, sometimes run insane promotions — perhaps not often enough for the liking of travelers, but they do on occassion. (E.g. RyanAir flights for 1 Euro plus taxes.) Thus, it should not be the risk of the traveler to discern whether an especially low price (whether miles or cash) is intended to be a blow the doors off promotion or an error. The airline should be required to honor the offer it makes.

  • BJP

    Airlines, like other businesses, sometimes run insane promotions — perhaps not often enough for the liking of travelers, but they do on occassion. (E.g. RyanAir flights for 1 Euro plus taxes.) Thus, it should not be the risk of the traveler to discern whether an especially low price (whether miles or cash) is intended to be a blow the doors off promotion or an error. The airline should be required to honor the offer it makes.

  • Zeke

    Boo, DOT, and Double BOO, Tim Winship.

    As I’ve stated before, United, for YEARS advertised “low fares” that ended up being much more than actual prices (and competing fares) after “fees and taxes.” THAT particular loop hole was closed, finally.

    But apparently, the industry still thinks it’s okay to let a business with millions of dollars of profit made by coming up with new “fees” to gouge the public off the hook. What a load of apologist bullcrap.

    United has the resources to make sure their coding and advertisements are CORRECT before relasing them into the wild. They need to be told firmly and unequivocally to USE those resources instead of being allowed to claim “ignorance.”

  • Zeke

    Boo, DOT, and Double BOO, Tim Winship.

    As I’ve stated before, United, for YEARS advertised “low fares” that ended up being much more than actual prices (and competing fares) after “fees and taxes.” THAT particular loop hole was closed, finally.

    But apparently, the industry still thinks it’s okay to let a business with millions of dollars of profit made by coming up with new “fees” to gouge the public off the hook. What a load of apologist bullcrap.

    United has the resources to make sure their coding and advertisements are CORRECT before relasing them into the wild. They need to be told firmly and unequivocally to USE those resources instead of being allowed to claim “ignorance.”

  • Usahim

    Those people knew plain in simple it was a computer glitch and tried to take advantage of the situation, good for the DOT to step in and basically stop these individuals for committing fraud!

  • Usahim

    Those people knew plain in simple it was a computer glitch and tried to take advantage of the situation, good for the DOT to step in and basically stop these individuals for committing fraud!

  • lcpossum

     Actually, if a store mistakenly advertises something at a ridiculously low price it is NOT required to honor that price. In truth a store is not required to honor any of its advertised prices, even in obvious cases of bait-and-switch. You’re living in lala land.

  • lcpossum

     Actually, if a store mistakenly advertises something at a ridiculously low price it is NOT required to honor that price. In truth a store is not required to honor any of its advertised prices, even in obvious cases of bait-and-switch. You’re living in lala land.

  • lcpossum

     “Millions of dollars of profit…?” You certainly aren’t speaking of airlines, who routinely operate at a loss. Check to see how many of the legacy airlines have never declared bankruptcy. Most have done it more than once.

  • lcpossum

     “Millions of dollars of profit…?” You certainly aren’t speaking of airlines, who routinely operate at a loss. Check to see how many of the legacy airlines have never declared bankruptcy. Most have done it more than once.

  • ecaarch

    I agree that a store (or airline) is not obligated to honor an advertised mistake price or fare before the transaction occurs.  However, once the deal is consummated, ie the transaction is complete and paid for, it should be a done deal.  Should I worry now that Albertson’s will knock on my door claiming that they undercharged me $.30 for a gallon of milk that I bought and drank last week?

  • ecaarch

    I agree that a store (or airline) is not obligated to honor an advertised mistake price or fare before the transaction occurs.  However, once the deal is consummated, ie the transaction is complete and paid for, it should be a done deal.  Should I worry now that Albertson’s will knock on my door claiming that they undercharged me $.30 for a gallon of milk that I bought and drank last week?

  • lcpossum

     A purchase is a contract, a quid pro quo. The store accepts your payment and you accept the goods. Contracts of this sort may be cancelled by mutual consent, or in case of fraud or misrepresented goods. You pay the retailer and take the milk. Done deal, unless your payment is defective or the product is.

    In the United case the consumer doesn’t quite have a contract like a retail purchase. It all boils down to the carrier’s Contract of Carriage, which you agree to when you enter into the transaction.

  • lcpossum

     A purchase is a contract, a quid pro quo. The store accepts your payment and you accept the goods. Contracts of this sort may be cancelled by mutual consent, or in case of fraud or misrepresented goods. You pay the retailer and take the milk. Done deal, unless your payment is defective or the product is.

    In the United case the consumer doesn’t quite have a contract like a retail purchase. It all boils down to the carrier’s Contract of Carriage, which you agree to when you enter into the transaction.

  • http://profile.yahoo.com/KPU2YTEQKQUS4UNS5RAVSPEFO4 BOMBER

     Slightly different scenario with your consumed milk theory.  If United had sent them on the flight to Hong Kong first and then afterwards came back and said it was a mistake and tried to charge the passengers difference in money, it would be similar to your milk theory.  Since no flight was taken, deal wasn’t “done”. 

  • http://profile.yahoo.com/KPU2YTEQKQUS4UNS5RAVSPEFO4 BOMBER

     Slightly different scenario with your consumed milk theory.  If United had sent them on the flight to Hong Kong first and then afterwards came back and said it was a mistake and tried to charge the passengers difference in money, it would be similar to your milk theory.  Since no flight was taken, deal wasn’t “done”. 

  • dewhit 6959

    I’d like to see how many that think United should honor the obvious mistake would let their company honor such a mistake with their services or products.

    Quit crying and wanting something for nothing .

  • dewhit 6959

    I’d like to see how many that think United should honor the obvious mistake would let their company honor such a mistake with their services or products.

    Quit crying and wanting something for nothing .

  • ProfessorSabena

    OK – let me postulate for the “should be honoured” position. Unfortunately this sets a precedent. AND SADLY not the first time the DoT has ruled in this manner. Some of you may recall the infamous case of BA and the India fares. Much higher prices etc but same principle.
    http://t2impact.blogspot.co.uk/2009/12/when-is-guaranteed-fare-not-one-ask-ba.html

    I wrote at the time that I thought this was bad and that BA should have honoured its fares. Ditto with this case.

    If I can push back on the milk scenario, I think I join several others in correcting Mr Winship on this issue. The moment of contract is the minute they issue the ticket. If the tickets were issued then the contract took place. Ditto if you bought milk it is about when you made the purchase transaction (contract) not when you consume(d) the product.

    There are many cases of offers not being fulfilled or not even possibly being fulfilled. (I can wax lyrically on cached data for ages). In that case its possibly bait and switch but the courts have been lenient for “technical reasons”. But here the contract was fulfilled (as I understand it). IE the process went…

    Offer pushed out
    Offer seen and responded
    Reservation made
    Contract engaged.

    Actually I think the DoT does not necessarily have jurisdiction. And that the case should go to the DoJ on this one. They are MUCH better at dealing with this sort of problem.

    It is unclear whether the tickets were issued or not. That could be another out if it wasnt. If the ticket WAS issued then we have a clear case. A note to anyone booking online. The moment of contract is NOT when you push the purchase button. It is when the ticket is issued and the second email arrives telling you that the ticket was issued.

    BUT in my view UAL was clearly wrong and should be punished for its ineptitude. Just like Alitalia is being punished for their Japanese faux pas. http://www.tnooz.com/2012/10/29/news/alitalia-wanted-to-enjoy-its-biggest-promotion-ever-found-itself-on-the-end-of-a-facebook-calamity/

    Cheers

     

  • ProfessorSabena

    OK – let me postulate for the “should be honoured” position. Unfortunately this sets a precedent. AND SADLY not the first time the DoT has ruled in this manner. Some of you may recall the infamous case of BA and the India fares. Much higher prices etc but same principle.
    http://t2impact.blogspot.co.uk/2009/12/when-is-guaranteed-fare-not-one-ask-ba.html

    I wrote at the time that I thought this was bad and that BA should have honoured its fares. Ditto with this case.

    If I can push back on the milk scenario, I think I join several others in correcting Mr Winship on this issue. The moment of contract is the minute they issue the ticket. If the tickets were issued then the contract took place. Ditto if you bought milk it is about when you made the purchase transaction (contract) not when you consume(d) the product.

    There are many cases of offers not being fulfilled or not even possibly being fulfilled. (I can wax lyrically on cached data for ages). In that case its possibly bait and switch but the courts have been lenient for “technical reasons”. But here the contract was fulfilled (as I understand it). IE the process went…

    Offer pushed out
    Offer seen and responded
    Reservation made
    Contract engaged.

    Actually I think the DoT does not necessarily have jurisdiction. And that the case should go to the DoJ on this one. They are MUCH better at dealing with this sort of problem.

    It is unclear whether the tickets were issued or not. That could be another out if it wasnt. If the ticket WAS issued then we have a clear case. A note to anyone booking online. The moment of contract is NOT when you push the purchase button. It is when the ticket is issued and the second email arrives telling you that the ticket was issued.

    BUT in my view UAL was clearly wrong and should be punished for its ineptitude. Just like Alitalia is being punished for their Japanese faux pas. http://www.tnooz.com/2012/10/29/news/alitalia-wanted-to-enjoy-its-biggest-promotion-ever-found-itself-on-the-end-of-a-facebook-calamity/

    Cheers

     

  • http://profile.yahoo.com/H7HZJ2J5JOACEV5UDAPTYBT7VA steve

    Really? That happened to me at Rite Aid and I did not get the item for the misadvertised price no matter how hard I tried. They pointed to the fine print that says they are not responsible for misprints,etc. Not sure where you got this info, but I’d love a link to your information as it is being posited as the unmitigated truth.

  • http://profile.yahoo.com/H7HZJ2J5JOACEV5UDAPTYBT7VA steve

    Really? That happened to me at Rite Aid and I did not get the item for the misadvertised price no matter how hard I tried. They pointed to the fine print that says they are not responsible for misprints,etc. Not sure where you got this info, but I’d love a link to your information as it is being posited as the unmitigated truth.

  • wiseword

    Many years ago, B.Altman, one of New York’s greatest department stores, advertised in The New York times a sale of bicycles at a ridiculously low price. It was a mistake –either Altman’s or The New York Times’s. No matter, Altman’s honored the price. Their word (even if mistaken) was their bond. Now how do you say that in twinkie talk?

  • wiseword

    Many years ago, B.Altman, one of New York’s greatest department stores, advertised in The New York times a sale of bicycles at a ridiculously low price. It was a mistake –either Altman’s or The New York Times’s. No matter, Altman’s honored the price. Their word (even if mistaken) was their bond. Now how do you say that in twinkie talk?

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