US traveller scams airline out of $240k with gift card glitch

American Airlines has been the target of a slew of recent scams. Photo / Ross Sokolovski

A wily traveller has pleaded guilty to abusing a glitch in American Airlines' computer booking system that allowed him to scam the airline out of $220,000 — while also scamming friends and relatives.

William Joseph Schwarze, from St Louis, Missouri, took advantage of an online booking loophole that let him buy gift cards from American Airlines, sell them on to others, and then get a refund back from the airline.

A US court heard the 27-year-old told people online that he was associated with a travel agency and planned to open his own travel business, the St Louis Post-Dispatch reported.

He claimed his expertise in the field meant he was able to "optimise airline and hotel customer experience programs" to secure travel deals for people.

But the court heard in reality, between January 2016 and October 2018, Schwarze bought hundreds of online gift cards from American Airlines — including 690 gift cards in 2018 alone and in amounts ranging from $50 to $150 — which he sold to others to use for booking flights.

Before or after the flight, Schwarze would ask for a refund and get the money returned to his credit card, even though it should have been refunded to the gift card.

Prosecutors told the court he stole $US160,000 ($240,000) from American Airlines with the scheme.

In his guilty plea, Schwarze said he accepted $US20,000 ($30,000) from friends, relatives and associates, who didn't know he was getting his purchase price back.

Schwarze pleaded guilty to one count of wire fraud and will be sentenced later this year, according to the Post-Dispatch. He will be ordered to repay about $US180,000 ($270,000).

The court heard Schwarze stole $240,000 from American Airlines. Photo / Belinda Fewigs, Unsplash

American Airlines has changed its systems to prevent a similar scheme from happening again, the paper reported.

The news comes days after a former airline worker admitted in court to creating fake airline IDs to get free flights for himself and others.

Hubbard Bell, 32, faces 20 years in a federal prison after he pleaded guilty to creating 34 free airline tickets for domestic flights for himself, even though he no longer worked for Arizona-based Mesa Airlines, and working with two others to make and sell fake employee ID cards between February 2016 and November 2017, according to the Orange County Breeze.