THE issue of refunds has plagued the travel industry amidst the coronavirus pandemic, as clients demand their money back in full, while agents frantically chase suppliers around the world.
The Australian Competition and Consumer Commission (ACCC) and Australian Consumer Law (ACL) regulators stepped in, issuing a “best practice guidance” for the travel industry in relation to COVID-19 travel cancellations.
Just one week after the guidance was released, engagement with the ACCC’s COVID-19 taskforce saw Etihad switch its stance and agree to offer refunds to all consumers who purchased EY tickets in Australia which were then cancelled due to the COVID-19 pandemic.
But what does this document, which seemed to slide by without a great deal of media attention, mean for agents and suppliers?
The guidance calls out the struggles many businesses face to manage the cancellations and financial impact of the pandemic but emphasises the need to balance this with the concerns of consumers, many of whom are also facing financial hardship.
It lays out a broad expectation that consumers will be provided with free-of-charge refunds where they are entitled to one — such as cases of fully refundable tickets, rights under state or territory legislation or where terms and conditions of a purchase specify refunds.
Terms and Conditions
A key element of the document is Terms and Conditions (T&Cs), with businesses expected to honour the fine print of their contracts.
This means that payment of a refund may be contingent on the recovery of funds from a supplier, but only if this was specified in the T&Cs. This extends to expenses incurred, with businesses able to retain amounts, and the remedy for a customer may be a “credit note or similar” rather than a refund, if this was called out in the T&Cs. However, the ACCC also urged businesses to “still consider providing refunds in cases or hardship or other exceptional circumstances”.
In the case of travel purchases through agents or other intermediaries, businesses must take “active steps” to seek to recover funds from suppliers which must be remitted to consumers as soon as possible.
In the case of primary suppliers, customers must be offered the choice of either a refund or an “attractive remedy in lieu of a refund” such as a value-added credit note.
In cases where travel services have not yet been cancelled but there is a reasonable possibility they will not go ahead because of ongoing travel restrictions, the guidance says businesses should advise clients of the approximate date when they will be able to confirm if the service will proceed or not.
Australian Federation of Travel Agents CEO Darren Rudd confirmed the final document reflected significant changes made to the initial draft from the ACCC and ACL regulators, after submissions made by AFTA.
He noted the final “best practice guidance” document was in line with information AFTA had previously shared with members.