Southwest Airlines Develops a Drinking Problem
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It didn’t take a law degree to predict the inevitable lawsuits when Dallas-based Southwest Airlines announced two years ago that it was changing the rules governing its free drink coupons. For years, the popular low-fare airline provided the coupons for a free alcoholic beverage in return for ticket purchases by age-appropriate customers. The coupons had no expiration date.
That model changed last summer, when Southwest began denying “old” coupons and instituted a policy that placed an expiration date on most of its new coupons, including many that were redeemable only on the day they were issued. Although the airline announced its intentions one year before the new policy went into place, Southwest made no other obvious effort to resolve complaints from customers who held hundreds of thousands of no-expiration coupons valued at $5 each.
The expected lawsuits followed in Illinois and Alabama federal courts, although Southwest recently won an important ruling in the Illinois case that dismissed the plaintiffs’ claims of unjust enrichment and violations of state consumer fraud laws. Both cases remain pending.
This is the kind of lawsuit that often hits the radar of legal critics, and one can almost imagine the silly headlines – “Plaintiffs Want Airline to Provide Free Drinks Forever.” But it’s worth pointing out that, in this instance, it was the airline itself that created the problem. Southwest could have ended the issuance of no-expiration coupons while continuing to honor the outstanding coupons as long as they were presented.
Instead, they decided to retroactively change the deal. And any time you unexpectedly and unilaterally try change a deal, lawsuits are a likely result. Regardless of the legal complications involved – airlines operate, after all, in a highly regulated environment – Americans have an innate sense of fairness that precludes them from easily accepting what they perceive as a company’s failure to keep its word to loyal customers.
The airline may win these lawsuits in the end, but only with the expense of multiple lawyers and tying up courtrooms in two different states, all because Southwest apparently decided that was cheaper than keeping their word.
Still, it seems like a lot of effort to spend just fighting over peanuts.
Posted: 3/15/2012 2:52:07 PM by
On the Merits Editor | with 0 comments