Why are travel businesses offering credit vouchers instead of cash refunds?

Westin

Consumer body - Which? has it seems now picked up on this issue and acknowledged that people may not be able to rebook or are uneasy about accepting credit with so many travel providers facing uncertain futures.  The consumer group has announced that it will lobby for clarity and for consumer protection. Which? have said they will be “calling on the government to provide the necessary funding to bail out companies at risk of collapse. We also want them to underwrite any rescheduled holidays. That would ensure customers still receive a full refund even if their provider goes bust before they have a chance to redeem their holiday”.   So that’s ABTA and Which? now trying to find a solution.   Hopefully MSE can add weight.

 https://www.which.co.uk/news/2020/03/coronavirus-outbreak-advice-for-travellers/ - Which?

007tilly

I've had the same issue with Secret Escapes, as you say I wouldn't mind so much taking a credit for 12 months and I know its a bit of a catch 22 but I am worried that if we accept a credit, and they went out of business, my insurance or credit card wouldn't pay out?
 I know there are bigger issues going on but its not just my money to lose

bobblebob

Westin said:

Consumer body - Which? has it seems now picked up on this issue and acknowledged that people may not be able to rebook or are uneasy about accepting credit with so many travel providers facing uncertain futures.  The consumer group has announced that it will lobby for clarity and for consumer protection. Which? have said they will be “calling on the government to provide the necessary funding to bail out companies at risk of collapse. We also want them to underwrite any rescheduled holidays. That would ensure customers still receive a full refund even if their provider goes bust before they have a chance to redeem their holiday”.   So that’s ABTA and Which? now trying to find a solution.   Hopefully MSE can add weight.

 https://www.which.co.uk/news/2020/03/coronavirus-outbreak-advice-for-travellers/ - Which?

If you got offered credit, isnt it best just to book something asap, then if they do go under you have an active booking and can claim under ATOL?

Westin

@007tilly:   Let's hope the situation will be made clearer over coming days.  Those who booked a package holiday for the security and financial protection element should I feel be offered the same levels of protection if customers look to support travel operators and concede to accepting credit vouchers.  It needs to be a two way street.

misterspoon

I'm confused about this. We booked our flights to Thailand through lastminute - contacted our insurer today and they told us we would have to try to get a refund first. Our flights are with Thai airways, currently offering customers a one year voucher, so this is the offer lastminute will get back to us with. My question is, if I can't or don't want to travel in the next year then can't I just go back to my insurer now and tell them the voucher is not suitable and so want to claim on my insurance? When you book a flight or holiday it's for the time you set aside. Not everyone can just reschedule a big trip within a year.

ComicGeek

We've had to argue today for a refund for a package holiday from Virgin Holidays, never thought that we would have to fight for that! What was really worrying is that their operators seem to have been given statements to read out which are just a bunch of lies designed to delay paying out any refunds. I still won't relax until I see the refund appear on the credit card.

Westin

@comicgeek:

You are right and as you had a package holiday, and if this was cancelled by the tour operator, your expectations are perfectly valid.  The current rules and regulations cover for such eventualities.   That said, I can also see why travel businesses are trying to offer credit vouchers - they need to preserve cash to survive.  The credit voucher might work for some or even many, but I do feel some level of protection needs to be extended to customers if they take a voucher.  If worked fairly for both sides I am sure many customers would also wish to support the UK travel industry, British businesses and British workers.  

As for the poor experience on the phone - I very much suspect that literally every man and his dog have been asked to stop doing other jobs within their business and to work in the contact centre to answer calls and other customer correspondence.  They may not be trained on relevant systems or processes and quite possibly reading from FAQ statement sheets.   The calls may even be farmed out to third party call centre agencies.   Not great, not perfect but a way to support call centres and get calls answered.  

Westin

@misterspoon:  I think you are in a slightly different situation as you probably don't have a trip that falls under the Package and Linked Travel Arrangements Regulations.   That said airlines will be looking to protect cash and most if not all are it seems only offering credit vouchers or travel waivers on postponed trips.  I think you have a good plan of action with your travel insurers. It might be a push and poke battle but I think an argument could be made that you have tried to mitigate a loss, but the solution (of the credit voucher) does not work and therefore you will need to make a claim for the airfare cost from the insurer. Just be aware of any policy excess.

RichieB2

We had flights to London to LA with Air New Zealand booked for April 5th and then hotels and tours etc. booked. Tours have refunded no problem, Expedia and Booking.com were great with Booking.com even emailing us to tell us to request refunds all of which have arrived. So we’re left with the parking at Heathrow with NCP who are offering a credit note which I get as we could still park ! Now for the flights. Air New Zealand have cancelled the entire route until 30th June but are only offering a credit note which is of limited value as they cease the London to LA route in October and with the kids at school (in theory) we don’t have a window to go before then (summer committed already etc). I’m not sure if its covered by the EU protection but looking at the CAA is suggests so as the flight starts in the EU ie London. So what to do ? Battle the airline and ask for a refund ? Claim on the insurance, policy says we’re covered ? Or Chase the credit card company under the Section 75 cover ? 

AlexDJHill

We have  a substantial final payment to make on a package holiday that has now been cancelled. The payment is due by credit card and it will, at present automatically go through. They have already offered a credit note for the full value of our holiday. Will they still take the payment, should they do this? I have contacted them via their app to lodge my complaint that I want a refund and I do not want them to process the final payment next week. What more can I do?