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It's not right. But Southwest allows it to happen.
The primary reason is this:
Southwest re-issues the positions of passengers who have been checked in, but then cancel or change their flight prior to departure. These are often A-Listers with great positions (A-16+), and those positions are then given to the next random person who checks in manually.
It's unfair to those who pay for EarlyBird Check-In, but that's how Southwest does it.
(Seat saving is also unfair, but Southwest allows that as well. But I digress...)
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Well if it makes you feel any better, I don't use early bird and since its implementation, even if I check in at exactly the second mark for 24 hours prior, I rarely see anything higher than mid Bs. Just got B24 for a split second check-in. Early bird takes a lot of early positions and you're still getting in in front of most non-EB people 😃
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