United $10,000, Delta $9,950: Why not $10,000? (transaction, amex, status, buying)

[nielloeb]

When Delta Air Lines announced it was raising its bumped passenger compensation limit to $9,950, I thought it wasn't $10,000 because there must a legal reason and the fact that a passenger can ask that the money be paid in cash on the spot. But then United announced their limit of $10,000. Is United going to be breaking some sort of law? If not, why is Delta stopping $50 short?

[Aredhel]

Delta gives out AmEx gift cards (a cash equivalent), not just vouchers, and $10,000 is the limit that triggers mandatory reporting of a cash transaction to the Feds. So I think Delta is just being cautious.

[ncole1]

The feds should increase the $10k limit with inflation, IMO...

[Malloric]

Mandatory reporting isn't really a big deal anyway. It's just a simple form that takes about 15 seconds. Probably less. Most banks probably have it automated so it doesn't take any effort.

[jean_ji]

Those amounts are not likely to be ever be seen for domestic flights. Bumped compensation is given when they ask for volunteers before an overbooked flight. They usually start around $400 or less and go up until someone volunteers. They will get volunteers long before they ever reach the max. This is a feel good public relations move.

[NickofDiamonds]

Since their business practices seem like it's run by the Mafia, maybe it's their way of laundering money ?

[PacoMartin]

The Bank Secrecy Act of 1970 was passed when the circulation of $100 banknotes was less than 1 banknote per capita and the phrase "It's all about the Benjamins" was unknown. Now the c-note is circulating at over 34 banknotes per capita.

Inflation means that the $100 banknote today has the same buying power as the $20 banknote in 1970.

Originally Posted by ncole1

The feds should increase the $10k limit with inflation, IMO...

Advocates of cash believe that the $10K limit should be increased, and that the federal government should re-institute production of the $500 banknote and possibly the $1000 banknote.

Canada circulated their $1000 banknote for their entire history up until the year 2000. While European countries have a history of declaring old money "invalid", the USA and Canada simply stop producing currency, and destroy banknotes that come into their possession. So Canada has almost 4 million $1000 banknotes in circulation in the year 2000, and has managed to reduce that number to 765,274 banknotes as of 2016. While it is popularly believed that the remaining banknotes are held by gangsters, about 30,000 banknotes were destroyed in the previous years, and eventually they will all become collectibles like the pre WWII high value banknotes produced in the USA.

The USA produced $5.57 billion in banknotes worth $500, $1000, $5000, and $10000 prior to WWII. While that seems like a small amount of money today, total banknotes in circulation in 1936 were $4 billion. The high value banknotes were put into circulation all through the war as the value of circulating banknotes ballooned to $23 billion in 1945. Despite the increase, it was still possible to say that the federal reserve notes were backed by the gold held by the government.

High value banknotes were no longer added to the circulating stock after 1945, but the federal government did not have a policy of destroying them until 1969. Total circulation of federal banknotes has increased modestly to roughly $45 billion in 1969 for a population that was passing 200 million. After the USA formally removed themselves from the gold standard in 1971, the number of c-notes produced increased at a much higher rate. Cash in circulation was about $850 billion at the beginning of the Obama presidency and is roughly $1500 billion today.

Circulation of remaining USA high value banknotes in 2016 are estimated to be:
284,000 - $500 banknotes
165,000 - $1000 banknotes
350 - $5,000 banknotes
340 - $10,000 banknotes
As these banknotes have been in circulation so many decades, it is believed that all are being held by collectors instead of gangsters.

Originally Posted by nielloeb

But then United announced their limit of $10,000. Is United going to be breaking some sort of law? If not, why is Delta stopping $50 short?

It is perfectly legal to pay $10,000 in cash, but you must provide the appropriate form to notify the IRS. It is illegal to make a $10,000 cash transaction and not fill out the form.

Also you need to fill out the form if carrying $10,000 in cash instruments on a foreign flight.

[LeavingMA]

Originally Posted by jean_ji

Those amounts are not likely to be ever be seen for domestic flights. Bumped compensation is given when they ask for volunteers before an overbooked flight. They usually start around $400 or less and go up until someone volunteers. They will get volunteers long before they ever reach the max. This is a feel good public relations move.

Completely agree with the above assessment. I fly about 5 to 6 times a year with the flights always full, and still have yet to see them even offer any money at all. I doubt it would get higher then $800 to $1,000.

[jean_ji]

The highest I've seen recently was a Delta voucher for $800, being put up in a hotel for the night and on the first flight out in the morning. This was an Atlanta to Sarasota flight in season, which are always packed. DH has a Delta platinum membership and will get upgraded to first class on different flights sometimes but never on the Sarasota flights. There are usually 12-15 people with Diamond status ahead of him.

[cisco kid]

Are the airlines paying you in cash or worthless flight vouchers?