Allegiant adds a “fee to pay”


Allegiant is second only to Spirit Air in the United States in their focus on ancillary fees as a source of revenue. Both now charge for carry-on bags and most other things you can think of as part of the purchase process. While Spirit has a "usage fee" for booking on its website Allegiant is choosing a different tack, adding a fee to use credit cards as a payment method.

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Technically this is a discount for using a debit card, a transaction type which is cheaper for them to process, and not a fee. Because of that it isn’t details on their fee schedule. But it is very much a requirement for customers who want to pay with a credit card, running $4-6 per passenger per segment. With 1.7mm passengers quarterly that adds up in a hurry to a lot of revenue.

The carrier, of course, maintains that customers are getting the lowest base fares possible and then choosing the "extra" benefits they need. In the case of buying with a debit versus credit card, however, there are some very real reasons customers should be cautious about using a debit card to save a few dollars. Purchases made with a credit card come with certain consumer protections which are not available via other means. Historically this has meant a free version of insurance against the company failing to deliver. Now Allegiant is going to have customers pay for that insurance. At least the company recognizes this shortcoming when a customer clicks for the details on the debit card discount:

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The move also raises an interesting question with respect to the DoT rules regarding full-fare advertising. Is the fare displayed on the search results really the all-in price if only certain customers using a specific payment method can actually realize that price? It will certainly be interesting to watch.

At the end of the day this move makes it harder for customers to easily compare total trip costs across carriers. That’s bad for passengers.

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Seth Miller

I'm Seth, also known as the Wandering Aramean. I was bit by the travel bug 30 years ago and there's no sign of a cure. I fly ~200,000 miles annually; these are my stories. You can connect with me on Twitter, Facebook, and LinkedIn.

5 Comments

  1. While I usually think people whine too much about fees, I have to concur here that this is very questionable indeed, essentially a way to make the fare look lower than it really is, and right on the edge of bait and switch. Frankly when I see an Allegiant or Spirit fare I assume it’s fake, and it has to be a LOT lower than the competition before I’ll take a closer look.

  2. Not that I trust every word the man says, but I’m a fairly frequent Dave Ramsey listener, and his radio show espouses that debit cards have the same protections as credit cards.

    1. Interesting information, Copa. I’ve done a bit more digging on the topic and, quite frankly, I have no idea where he’s getting that from. The information provided by the Feds (e.g. http://www.usa.gov/topics/money/banking/atm-debit.shtml) explicitly states that the protections are worse. The merchant is saying the same thing. I have no reason to believe that it isn’t true.

      Maybe a debit card transaction processed as a credit card (they can be run either way) would have the credit card protections, but Allegiant is definitely going to be processing them as debit cards to save the cash. That’s the whole point of this change. Given that I would caution against using a debit card for buying a plane ticket.

      Besides, most debit cards don’t earn points, either. 😉

  3. Ailines in Europe are implementng the OPC in full force, but still holding back in the US.

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