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Fare avoidance, as distinct from fare evasion, is the lawful use of knowledge to travel using tickets which cost significantly less than the 'normal' fare for a given journey, which is what one might be expected to use. It is common in some parts of the world with complex travel networks, notably the National Rail network of Great Britain.
The term is sometimes used as a synonym of fare evasion.
Typical loopholes that lead to fare avoidance
Apart from mileage, some rail systems or airlines calculate fare based on an individual route's popularity and a host of other factors. Therefore, instead of a fare directly from A to B, a passenger may go from A to P and then P to B for less. This price advantage is more pronounced if P is en route between A and B.
Even if mileage is the sole factor in pricing apart from discounts, applicable to journeys exceeding a certain mileage, paradox may result for borderline cases. For example, a rail system practises a fare structure of $100 for the first 100 km and $6 for each additional 10 km. A ticket from A to B, 380 km apart, costs $268. If a discount of 15% applies to mileages exceeding 400 km only, a ticket from A to C, 420 km apart, would cost $292 × 85% = $248.2. A traveller may buy a ticket from A to C and alight at B, avoiding the $19.80.
Frequently, smart cards, as a convenience, allow the user to run a negative balance. If this balance is greater than the cost of the card, the user may profit by simply discarding the card and purchasing another.
One method is called scissoring, used for business air travel when return tickets are cheaper with a weekend between, assuming that tourists, not business people, travel like that. If two return journeys are done, A-B-B-A and once again a different week, two tickets can be purchased, A-B,B-A and B-A,A-B with weekends between in both tickets.
Another loophole is when tickets are cheaper when booked early. Business travellers often book late, but for bigger companies cheaper tickets could be booked early on frequent routes, and be given to travellers when needing them. Some people have bought early tickets for popular routes and sold them later over the net. This is avoided by airlines by requiring a correct name and claiming high fees for changing that name. This has affected tourists who have misspelt their names, or changed names by marriage.
In the MTR system of Hong Kong, Lo Wu and Lok Ma Chau Station of East Rail Line serve as checkpoints for rail passengers between Hong Kong and mainland China and vice versa. If a passenger travels to/from stations from urban area (on or before Kowloon Tong), it is possible to save money by splitting the journey into 2 legs. For example, travelling directly from Hung Hom to Lo Wu costs HK$34.40. If the passenger exits and enters again at Sheung Shui Station, the journey costs HK$30.70 (Hung Hom - Sheung Shui: HK$9.10, Sheung Shui - Lo Wu: $21.60), which is HK$3.70 lower than the direct journey.
The rail operator SJ had a loophole around 2010, where ticket prices were calculated the shortest way, even if going a detour with a train change. It was possible to book a short distance ticket with an extreme detour, and end the journey halfway. This loophole has been tightened.
The Privatisation of British Rail has resulted in a complex fare structure, with passengers regularly mis-sold tickets, or not aware of the full entitlement a ticket gives them. Enthusiasts, and those with connections to the industry, use the Great Britain railway technical manuals to identify which fares offer best value. This often involves purchasing tickets for stations which one has no intention of actually visiting, for a number of reasons. Since rail journeys in Great Britain are not always priced on mileage, often it is cheaper to buy a ticket from A to D via B and C, solely to travel from B to C (in some cases A = B or C = D). UK train operators have responded by often levying stiff penalty fares on passengers who attempt to leave the train before their ticketed destination when using an 'Advance Ticket' which does not allow a Break Of Journey. When splitting a journey it is important that the entire journey is covered by tickets and that where you transfer from one ticket to another the train must stop at that station. It is even possible for two or more legs to involve the same train with no need to alight, this is called a "tickety split".
On the Amtrak system, state-sponsored trains such as the Pennsylvanian can sometimes carry much lower fares than Northeast Corridor trains. Travellers between New York and Philadelphia could purchase a ticket from New York to one of the branch line stations on the Harrisburg branch of the Northeast Corridor, and disembark in Philadelphia leaving the feeder portion of the ticket unused. Although the traveller would travel over the same physical line infrastructure, the cheaper ticket would only be valid on trains that were continuing beyond Philadelphia onto the feeder route, such as the Keystone Service trains.
BART has several fares where the sum of the fares A–P + P–B is less than the direct fare A–B. The most dramatic is Fremont to Dublin/Pleasanton. The direct fare (paid by Clipper card, effective January 1, 2018 thru December 31, 2019) is $4.95; however if one exits and re-enters at Bay Fair (where a transfer is required anyway), the fare is $2.00 for each leg, for a total of $4.00.
The Washington Metro sells a 7-day Short Trip Pass good for any trip during peak hours (when fares, effective 2014, can range up to $5.90) up to the maximum off-peak fare of $3.60, clearly under the assumption that it would not be worth people’s time to exit and re-board. However, since someone traveling from West Falls Church to Eisenhower Avenue would have to transfer at Rosslyn station, rather than paying the $1.40 fee for the $5.00 peak fare they could exit and re-enter the paid area easily (as Rosslyn is one of 3 Metro stations with on-platform faregates), and have each of the two segments of their journey covered by their pass.