Earlier today, I wrote about my oversold United redeye flight, where passengers were offered $2000 to take a flight the following morning. I’m still not understanding why there were not more takers.
First, I do acknowledge we are talking about airline vouchers, not cash. While I consider the two interchangeable, those who may not travel as much as I do understandably may not.
United began by offering passengers a $600 voucher for the flight. There was only one taker out of almost 200 passengers.
Isn’t $600 a good haul for a day’s work? Multiply that by five working days per week and 52 weeks per year and that comes to $156,000. That’s a decent income.
How about $1,000? At $1,000 per day, that’s $260,000 per year.
$2,000 voucher? Making $2,000/day is $520,000/year.
Now I realize that $2,000 is nothing to some people…I see that all the time at Award Expert.
But median per capita income in the USA is $31,099. $2K pays for a lot of trips…
Do people simply not do the math? What can possibly be so important in New York that there would not be dozens of people clamoring to take this offer? Is everyone on the plane so well paid that missing a day or work or being late to an appointment is not worth $2,000? That can’t be the case.
CONCLUSION
Over dinner in New York last night, I told my colleagues about what happened. All of them agreed I should have taken the $2K had it been offered to me (remember, I was on standby). I would have postponed my meeting for it. Why not? I’m not making $2K/day in my other businesses. At least not yet. More importantly, people are flexible and the bump itself makes great conversation.
Can anyone explain why people are so hesitant to take a bump, especially when guaranteed a seat less than seven hours later? Everyone cannot be going to funerals or weddings.
When you are out of town for work all the time, time with family and young kids is priceless.
Family trumps all.
I would have thought there would be some takers to avoid a day with the family.
I would have taken the $2k voucher. Using the counter argument, one night not at home with the kids could have paid for most or all of the airfare for a family vacation.
Does UA still restrict the use of vouchers to higher fare classes? I seem to recall that used to be the case – so really, you ended up paying the same if not more with a voucher compared to outright purchasing the cheapest fare. Even if that’s not the case, you have to realize that a lot of people only fly once or twice a year. A voucher that expires in a year isn’t going to do any good for someone who’s taking their one vacation for the year.
The other is that an overnight bump is a significant inconvenience for a lot of people. Transportation has to be re-arranged ,you have to pay for an additional day of parking, if someone is on the front end of a vacation, they lose a day of it, etc. Those are real cash expenses that may or may not be defrayed by the airline, and funny money really isn’t an equivalent. Also, while I have a pretty flexible work schedule where an extra morning or day off wouldn’t really matter, that’s not the case for a lot of people. For some, you might have to take a sick day with no pay, use another day of vacation you need for something else, might face disciplinary action for an unscheduled day off, etc.
That’s a long-winded way of saying I understand why people are reluctant to take bump vouchers. It’s probably more favorable for many to just wait until it becomes an IDB situation where you get real money.
No restrictions.
BTW, you said something that I think you really need to think about.
“All of them agreed I should have taken the $2K had it been offered to me (remember, I was on standby). I would have postponed my meeting for it. Why not? I’m not making $2K/day in my other businesses. At least not yet. More importantly, people are flexible and the bump itself makes great conversation.”
If I were your client/prospective client, and you postponed a meeting with me to take a bump voucher, I would absolutely fire you or tell you not to bother rescheduling, because I will no longer consider your proposal. That’s not being very considerate of my valuable time, and I absolutely take that into account. I’d suggest being very, very careful before choosing to do that. At least be absolutely sure that the person you’re making wait would find it amusing and not rude.
I wonder what would you do if someone told you that you have to do a business on their schedule because they have a first class flight award booked and don’t want to lose that? 🙂
In the corporate world, where any money doesn’t really come from any single pocket that might trigger an ego reaction.
On the small business front however, this type of frugality might be considered a plus. I’d rather much rather trust a person in a business relation who took this bump then not. If they didn’t that would very well mean I’m overpaying for something that $2k…
Risk of getting fired from your job (or getting reduced bonus/raise next time) for being late when you sad you’ll be there.
That’s literally the only reason why I’ve refused a bump. In all other cases, take it. Because in those cases, you lose more money.
I feel sorry for the putz that took $600. Hold out…just watch for hands going up.
He eventually got $2K. United gives the highest bidding amount to every volunteer.
But if I were United I would not be so generous…
Really?! I by know that.
If more people did they would all hold out and really drive up the price.
If it was straight cash people would take it. Vouchers with expiration dates aren’t the same thing.
I recently got a $9k voucher on Delta for going from business class to economy. I also had the option of taking the voucher with a bus class seat the next day. The hard part is figuring out how to spend as it covers other people on my itinerary as long as i am traveling.
https://truptravels.com/2017/11/12/confirmed-paid-ticket-downgraded-on-deltaone/
I don’t understand why I’m never on these flights. I’m a corporate salaryman, $2K is a no-brainer as far as I’m concerned.
It’s vouchers, not cash. Bring cash into the equation, conversion will increase.
Its a United Airlines voucher. You need to a applty the correct discount to the value because its not cash and it means more travel on United. I value $2000 in vouchers at about $37
How do arrive at the $37.00 value?
I think the issue is that most people these days have come to the conclusion that you just can’t trust the airlines to do the right thing. The early takers might be the once a year holiday travelers – but I think most people figure the vouchers are riddled with restrictions or availability limited and just don’t see it worth the hassle to try to get those redeemed within the year.
Take the actual IDB cash, and that changes the dynamic.
I’d also understand why there are few if any takers. I have the Fortune of working in Germany; my boss lets me work when and where I want so coming into the office a day late isn’t a big deal. I can’t assume that could be said for most Americans..
How much does a $2,000 voucher really cost United. When you consider how much of the voucher amount is not used or not used at all, and tax deduction for United I wonder what the cost is to United. Also, if United had sold seats on the flight, say the day before, they may have received a very high price for those bumped seats. Maybe someone has the answers to these questions. Anyway, I would have been one of those to give up my seat, but I am retired and time is on my side.
Not a whole lot. I believe they acct for vouchers at 25% face value.