Fees, Refunds and Cancellations
Latest consumer questions and complaints received by TICO's complaints team
Consumers are increasingly choosing to travel once again, however the current economic environment with high inflation, rising fuel costs and increasing interest rates is at times impacting the delivery of those travel services.
TICO has seen an increase in consumer questions and complaints related to price increases, refunds, and travel vouchers.
We’ve received questions and complaints about price increases, such as fuel surcharges, that were added after a booking took place. Consumers are unsure about whether these increases are allowed and what their options are if they don’t want to proceed after the price has increased.
Here’s what you need to know:
- Your invoice to the consumer must indicate whether the contract allows price increases.
- If the contract does not state that increases are allowed, no further fees may be added.
- If the contract does permit price increases, the two following statements must be included:
- No price increases are permitted after the customer has paid in full; and
- If the total price of the travel services is increased by more than 7%, the customer has the right to cancel the contract and obtain a full refund. The only exception to this is if the increase is due to an increase in the government sales tax.
Bottom line: if the invoice does not include a statement allowing the price to be increased, it can’t be done.
In the current travel environment, where we are seeing significant flight cancellations by airlines, you may be processing airline refunds for your customers. TICO has received questions and complaints from consumers where travel agencies are holding back part of the refund.
For example, we’ve seen situations where a consumer is owed a full refund due to an airline flight cancellation. The travel agency refunds the cost of the ticket back to the consumer, but they hold back their own mark-up from the total refund.
As these flight cancellations are being triggered by the airlines, and not by consumers, consumers are entitled to their complete refunds without penalties or fees not disclosed or included on the invoice at the time of booking.
It’s certainly a challenging environment for both consumers and travel agencies as the entire travel ecosystem is adjusting to the new normal.
Cancellations and travel vouchers
TICO has seen an increase in travel agencies that are creating their own packages or tours. By acquiring the rights to various travel services and selling custom packages, the travel agency (or the tour operator) takes on a risk. We have seen scenarios where the agency cancels the tour/package due to low passenger numbers and offers the customers who were booked future travel vouchers. The regulatory amendment that allows registrants to offer a credit voucher is only relevant when there is a failure of a supplier to provide services due to COVID-19. This amendment does not permit credit vouchers to be issued for cancellations due to low sales; a full refund must be offered to the customer.
The Mediterranean Travel Company, a travel agency that specializes in trips to Greece, decides to create a custom package that they think will be popular for their customers.
They acquire the rights to several travel services and create a package that includes airfare, accommodations, ground transfers and a series of sailing outings on the Mediterranean Sea.
However, interest in this trip is not as high as The Mediterranean Travel Company expected and they are unable to secure the numbers needed to proceed. They cancel the trip and provide each customer with a future travel voucher. These customers contact TICO to complain that they have been given future travel vouchers rather than full refunds.
As the cancellation was due to The Mediterranean Travel Company not selling as many trips as expected, and not because of the failure of a supplier to provide services due to COVID-19, the company must issue refunds to the customers who were impacted.
For more information about the regulatory amendment relating to travel vouchers, click here.