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

Westin

It would seem that the Transport Secretary, Grant Shapps is reportedly set to approve the use of credit instead of refunds.

The European Commission (EC)  has already relaxed regulations around customer claim refunds amid the corona covid-19 virus pandemic. 

Customers are being encouraged to accept credit notes as long as they can ask for a full refund at a later date – if it is not used towards a new booking.

The Independent reports  ABTA as saying that "this new guidance will give customers the essential assurance that they will either get a holiday or their money back, as well as providing a much-needed helping hand to travel companies through these difficult and unprecedented times."

Also, according to The Independent, the Transport Secretary will agree to the same change in the UK, with any customer not redeeming their voucher able to claim the sum in cash. If a company were to fail before the credit note is cashed, financial protection will be provided by the Atol scheme.

Seems a very sensible move for all parties.

AgentOso1

This kind of ties up with what I have encountered. I asked for a refund for my tui holiday of a lifetime that I booked via another agent. The first 2 people I spoke to at the agent were adamant there was no refund and only a re-booking or a credit note. The manager at the store was unbelievable, essentially saying if I got a refund people would lose their jobs and would I want this to happen. He didn't seem to care about the risk to thousands of my pounds via a travel store credit note (we all know what happened to Thomas Cook vouchers). This manager did say the government were encouraging people to keep their cash in the travel companies to assist with cash flow.

While I understand the anguish of the industry is it my personal responsibility to leave my thousands tied up there? Moreover, I wont have the ability to re-book another holiday of this style for many reasons so I would need my cash back to make alternative arrangements.

I have since been told I would get a refund but that was a while ago and I am still waiting.

RichieB2

Westin - I’ve just read the Independent article and another on the EU relaxation re refund rules. Am I right in thinking this is for package holidays only ? I assume then that the flight only rules are unchanged ? I’m about to start engaging with Air New Zealand over our flights. The CAA says the flights are part of the EU flight refund rules as the flight originated in London so in theory I should get a refund. I sympathise with the travel industry re credit notes but the London to LA Air New Zealand route ceases in October. It’s not due to start again until June 30th and even if world travel is back on by then we cannot go in the summer (already away) and then we will have no other available time off work / school before the route ceases in October so a credit note is not much use to us. You heard anything around none flight only rule changes ? 

Westin

@RichieB2 : Yes - package holidays, or those covered under the Package and Linked Travel Arrangements Regulations 2018 (which could also be two holiday elements purchased at the same time like air+car rental).    For your situation with NZ my understanding is same as the CAA seem to be telling you.  If the airline cancel the flight and the flight either originates from the EU/UK, or is on an EU/UK carrier then a cash refund should be given if requested.  I suspect NZ will concede once this initial challenge of cancellations recedes. You might need to re-approach them in a few weeks.   If that fails perhaps a S75 claim will be necessary if you paid by credit card.

larkim

My frustration with this is that if I could persuade my accomodation provider (Pierre & Vacances) to actually refuse and allow me to cancel, I could leave the money in with them and the body that would be paying out would be the travel insurance company (which includes cancellation cover and will cover this scenario).  But until P&V budge from offering me a full credit note (that I don't want) the insurance company will say I've got no loss.
I'd much rather avoid a refund from P&V either directly or via a chargeback process and get the insurers to pick up the cost, but at the moment it feels like I might not be able to position myself into that place.  The call handlers at P&V didn't seem to recognise that this might be a benefit to them!

RichieB2

Westin said:

@RichieB2 : Yes - package holidays, or those covered under the Package and Linked Travel Arrangements Regulations 2018 (which could also be two holiday elements purchased at the same time like air+car rental).    For your situation with NZ my understanding is same as the CAA seem to be telling you.  If the airline cancel the flight and the flight either originates from the EU/UK, or is on an EU/UK carrier then a cash refund should be given if requested.  I suspect NZ will concede once this initial challenge of cancellations recedes. You might need to re-approach them in a few weeks.   If that fails perhaps a S75 claim will be necessary if you paid by credit card.

Thanks Westin. Yes paid on credit card so that’s an option and so is the travel insurance which has specific cover for cancellation. I’ve never claimed on travel insurance so have limited experience of how they operate. Is there an order ie approach the airline first and when who next. Travel insurance or Credit Card provider ? The travel insurer recorded message says have you tried asking for a refund or spoken to your credit card company first so I guess we know who’d they prefer pays. 

Westin

@RichieB2 :  I fear the pass the buck scenario will be a game played between all the parties.  It might be something that MSE staffers update in the general guide on the current situation.    Personally, I would probably let things calm until next week, then try NZ again.  The fact that they have curtailed early a previously announced route being dropped, I would like to think they will understand credit vouchers will not be acceptable to many and a cash refund is the only option.  This being an ex UK flight also means you have some fall back on Eu261 provisions.    At the same time I would ask my travel insurer for a claims form and start to diarise your efforts in sorting out a refund, and where this has failed.   No harm in also speaking to your credit card provider but they will I expect be very busy at the moment.  They will also want to ultimately know what steps you have taken and how you have exhausted other avenues. Perhaps one to also defer until next week. Good luck. 

bobblebob

"ask for a full refund eventually" seems very vague. What defines eventually?

fifeken

pinkpiglit said:

I made a booking at the Bellagio on 28 March which I booked through AlphaRooms.  Been patiently waiting for them to contact me which they finally did today.

Straight away they talked about the credit note they would be issuing, to which I replied I was  not interested and can they please refund the full amount to my credit card.

They had the cheek to say they can process a refund but would be withholding 10% of the amount as the booking is being cancelled within 10 days of my stay!   (As if it was my fault I was cancelling!)  This got my back up straight away.  I told them I strongly objected and wanted time to investigate my legal rights.  Then they tell me, in that case they are  marking by booking down as a 'No Show 'and to take it up through my insurer.  I hit the roof!  

After a rather heated discussion the booking remains 'as is' and I’m to email them.  Which I now have done.  In my email I pointed out that the Bellagio is refunding all bookings up to 16 April IN FULL and I expect them to do the same.

I know 10% isn’t the end of the world, but it’s the principle.

Alpharooms need paying for their work in making the booking and now handling your request to cancel.  I understand you want your money back but how will Alpharooms pay their staff if you don't pay for their services?  Anything you are out of pocket is a matter for your insurance.

lizbef

Brittany Ferries: I booked ferry crossings to Normandy for myself and husband, son, DiL and grandson, and other son and fiancee to travel on 7 April and return on 12 April.  I don't have any travel insurance.  Brittany emailed today to say that they have cancelled our crossings, but are only offering vouchers for use within 12 months.  I have paid them about  £850.  I don't know when we may be able to go, or if we'll be able to find dates when are all available.  Am I able to refuse the vouchers and ask for a refund?  ThanksI booked ferry crossings to Normandy for myself and husband, son, DiL and grandson, and other son and fiancee to travel on 7 April and return on 12 April.  I don't have any travel insurance.  Brittany emailed today to say that they have cancelled our crossings, but are only offering vouchers for use within 12 months.  I have paid them about  £850.  I don't know when we may be able to go, or if we'll be able to find dates when are all available.  Am I able to refuse the vouchers and ask for a refund?  Thanks