What’s the difference between a cancellation penalty and an administrative fee?

By | March 29th, 2017

Mistakes happen — it’s a fact of life and of business. But when a mistake by two companies results in a customer losing $500, who should reimburse the client? That’s what Henry Vogt wants to know. His case raises some important questions about disclosure and ethics that could affect your next travel purchase.

Vogt made reservations on an American Cruise Lines cruise on the Mississippi River through Just Cruises Plus, a travel agency he had used before. When he requested information on ACL’s cancellation policy, the agent called the cruise line while Vogt was in the office. The cruise line’s representative told the agent that there is no cancellation penalty if the traveler cancels more than 90 days before departure. Vogt paid his deposit and started planning his vacation.

Of course, if Vogt had cruised on American Cruise Lines and had a wonderful time, we wouldn’t be here. So you know what’s coming next, don’t you? Vogt canceled the trip, but the entire deposit was not refunded — American Cruise Lines kept $500 of his money.

Vogt’s first request to be reimbursed was to his travel agent. Just Cruises Plus reiterated that it had been told by American Cruise Lines that there would be no cancellation penalty and began making calls to try to get the money reimbursed by the cruise line.

After not hearing back from Just Cruises Plus that he would receive a full refund, Vogt disputed the charge with American Express. In his letter to the credit card company, he noted:

“My wife and I feel that American Queen cancellation charge of $250 each is fraud,” he says. “They went out of their way in not disclosing this fee.”

He added,

We didn’t receive American Queen’s contract until after they had charged our American Express account, and were not told of any cancellation fee on the phone. We were advised by the phone call from Just Cruises that we could cancel up to 90 days before sailing. We canceled less than 24 hours after our phone call and as soon as we received the printed contract.

I believe this was a deception on the part of American Queen and purposely done.

American Express sided with American Cruise Lines.

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According to Vogt, Just Cruises Plus continued to maintain that the reimbursement should come from American Cruise Lines, not from the travel agency, but American Cruise Lines maintained it was entitled to keep the $500. Vogt certainly could have used the contacts we list on our site for American Cruise Lines, but he appealed to us instead, and we reached out to Just Cruises Plus.

When our advocate contacted the travel agency she was told American Cruise Lines had made the mistake, not the agency, and she questioned why the agency was “being targeted” by us. She suggested we should be targeting American Cruise Lines.

But should we?

Two of the things you should be getting when you use a travel agent are an expert and an advocate. You’re looking for assistance from someone more educated than you are about a complicated business, and you’re also hoping for an advocate who will go to bat for you, should something go wrong. Just Cruises Plus definitely seems to have failed the Vogts on the first point, and possibly on the second.

While Vogt doesn’t question that American Cruise Lines told the travel agent that there would be “no cancellation penalty,” one look at the passenger information on the ACL website would have told the agent (and Vogt) that, “All cancellations will incur a non-refundable $250 per person cancellation administrative charge.” The site also offers a Cruise Cancellation Protection Plan and lists a “refund schedule for any monies received without Cruise Cancellation Protection Plan.” If cancellation is made 91 days or more prior to the sailing date, the refund is 100%, but it’s important to note that there is an asterisk next to this number. This asterisk corresponds to a note that repeats, “All refunds will incur a $250 per person charge.”

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This information is also clearly stated under “Cancellation Terms” on the first page of the confirmation that American Cruise Lines emailed to the travel agency.

I believe American Cruise Lines’ claim that a customer receives a 100 percent refund while simultaneously stipulating that a $250 administrative fee is charged on every cancellation is intentionally misleading. But that’s why you hire a travel agent — to weed through confusing company rules and regulations.

The fact that I found the ACL policy in less than five minutes leads me to believe the agent should have been able to find the same information. If she asked the cruise line both if her clients would receive a 100 percent refund and if there would be any administrative fees, then I might feel differently about “targeting American Cruise Lines,” but this doesn’t seem to be the case.

One of our forum advocates suggested that since Vogt had requested his money back five months before contacting us, he should think about filing a complaint against Just Cruises Plus with the American Society of Travel Agents (ASTA) if the agency did not resolve the issue quickly. I wondered if this was an option for Vogt and checked its Code of Ethics. First on the list is accuracy:

ASTA members will be factual and accurate when providing information about their services and the services of any firm they represent. They will not use deceptive practices.

To be clear, I don’t believe Just Cruises Plus used deceptive practices in this case. But I do believe it failed to provide accurate information about American Cruise Lines.

The second item in the Code is disclosure, which includes “…other terms and conditions, of any travel service sold, including cancellation and service fee policies.” It’s clear that the full story of the cancellation penalties and fees was neither determined nor disclosed.

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Just Cruises Plus claims it was actively advocating for Vogt with American Cruise Lines, but after five months without resolution, it is reasonable for Vogt to question the agency’s responsiveness, which is the third responsibility in ASTA’s code of ethics.

In his correspondence to us Vogt has maintained that he does not believe that the agency was at fault for the loss of his money, and I while I may question its adherence to the letter of the Code of Ethics, Vogt clearly believes the agency at least abided by the spirit of the Code, and I seriously doubt he would ever file a complaint.

One of our forum advocates also mentioned that reputable travel agents have liability insurance that covers errors and omissions. While true, this insurance is usually activated in more catastrophic cases than a $500 administrative fee that the agent failed to uncover.

In the end, we’re left with a cruise line that set up misleading terms, a travel agent who did not uncover the cruise line’s fees and a consumer who lost both a vacation and $500.

The outcome of this latest game of “blame the other company” is that Just Cruises Plus chose to make this right for its client. While still claiming the problem is the fault of the cruise line, the agent issued a $500 “goodwill credit” to Vogt, which he can use on any future cruise — except American Cruise Lines. While Vogt would have preferred cash, after five months, he wants the entire ordeal to be over. When assured that the credit does not have an expiration date, Vogt accepted the offer and plans to book with Just Cruises Plus again soon.



  • sirwired

    Yeah, if they want to charge you $250 to receive any form of refund, then they should be advertising “no change penalty 90 days before sailing”, because there most certainly is a cancellation penalty.

  • LDVinVA

    Something is wrong here. If these folks were planning on traveling on the American Queen, they were NOT dealing with American Cruise Line. The American Queen is operated by American Queen Steamboat Company.

  • Alan Gore

    Travel agencies should be aware of the different names that can be used for given fees, and how to ask a cruise line for a disclosure that it can then interpret correctly. If the agency can prove in this case that ACL lied to it, it should be able to extract the refund from the cruise line.

  • PsyGuy

    First, hate the title, fees, are fees it doesn’t matter if you call them penalties or fees. We need to stop allowing business to use the richness of language to defraud us.

    So much of a mess here. Okay bad cruise line for saying one thing and playing the “Asterisk card”, they might as well have just promised everything and then asterisked it with a “Just kidding, we promise nothing”. Which is basically what their refund policy is.

    What a crummy TA, see having a real life TA doesn’t guarantee anything, you will find incompetence, negligence in the travel industry everywhere.

  • PsyGuy

    They are aware of them, this was just an incompetent agent.

  • PsyGuy

    Agreed

  • Extramail

    Agreed. That’s why the traveler went to a travel agency! Travel agency is supposed to know their business and shouldn’t have even had to call the cruise line to determine their refund policy, especially a travel agency named “Just Cruises Plus.” Its the travel agency who owed him the $500 because he was depending on getting his facts from the travel agency regardless of what the cruise line told the travel agency.

  • Sandra

    I didn’t see any place in the article that indicated these people planned to travel on the American Queen. You’re correct; the American Queen is owned by a different company. There are three very similarly-named Mississippi River cruise companies that all have “American” in their titles.

  • LDVinVA

    I quote from the article:
    “My wife and I feel that American Queen cancellation charge of $250 each is fraud,” he says. “They went out of their way in not disclosing this fee.”

    He added,

    We didn’t receive American Queen’s contract until after they had charged our American Express account, and were not told of any cancellation fee on the phone. We were advised by the phone call from Just Cruises that we could cancel up to 90 days before sailing. We canceled less than 24 hours after our phone call and as soon as we received the printed contract.

    I believe this was a deception on the part of American Queen and purposely done.

  • Sandra

    I stand corrected; don’t know how I missed that BIG paragraph. Thanks for updating me.

  • Bill___A

    When asked about cancellation, any financial implication should be mentioned.

  • Lindabator

    except they DID offer him a resolution, which he would not have had otherwise. But this was an obviously new agent or one unfamiliar with the cruise line, so would have asked for a different agent at least (we all have our specialties here, and have no problem giving a client to another agent who specializes in something I do not)

  • Maxwell Smart

    this sort of thing happens. Travel agents aren’t lawyers. The stupid thing is the cruise company is likely to lose business from this & other travel agents over $500.
    I sold some travel insurance once. Someone was driving 1500kms (about 942 miles – before we had cheap airfares) to an Australian ski resort(yes we have them-they are small by western U.S. standards).
    He hit a kangaroo twice. (a lesson for anyone driving in rural areas in Australia at night – car lights attract kangaroos & they often jump towards the lights) A big kangaroo hitting a car, can totally destroy it OR the roo might come through the windscreen. Not pretty, at 60 mph plus.
    Anyway … person wasn’t that far from home & rang us (it was a Saturday), so we rang the insurance company & asked if he was covered to fly (last minute airfares expensive as always). they said yes & we asked them to fax us something to that effect (this way before the internet). They did fax a very vague statement.
    We organised flights for the guy & his family. We said, pay for them & insurance company will reimburse you. He said he had no money, so we put airfares on our account.
    & guess what … insurance company refused to pay.
    So 2 things happened …
    1) we withheld all payments owing to insurance company
    2) we never used this insurance company again
    1) above was more than the claim & 2) above was 10 times the claim, per annum.
    Talk about dumber & dumber.

  • Maxwell Smart

    no. Many travel company contracts are written by dodgy lawyers who can’t even speak/write english or american.

  • Maxwell Smart

    so now you’re saying every travel agent should be a lawyer ? Ok, anyone can get a law degree, especially in USA, but still, it’s not necessary to have a lawyer on staff.

  • Maxwell Smart

    like all insurance, you can’t cover every single possibility in writing. If a client comes in & says I want to do this cruise, you cannot be familiar with every rule that cruise line has & some are written in such legal speak, no one understands them anyway.

  • Maxwell Smart

    who said they didn’t ? Did the client have a cruise brochure ?

  • Maxwell Smart

    yes & in law, medicine, accounting & don’t get me started on the worlds dodgiest bankers in the USA (can’t believe many weren’t shot dead after the dodgiest of all sub-prime lending scam). I think I would have happily shot a dozen bankers if I lost my house.

  • Maxwell Smart

    don’t be ridiculous Ann. Sometimes these t’s & c’s go to up to 6 pages of micro print. A travel agent is not a lawyer. The client should read them. Don’t think the agent was negligent at all. They called the dodgy cruise company, while client in front of them. The cruise company lied over the phone.

    Got to feel sorry for the agent. They got screwed.

  • Harvey-6-3.5

    I realize the “24 hour rule” doesn’t apply to cruise lines, but it should. This “American Queen” cruise line penalty is unreasonable if the purchaser doesn’t have the contract.

  • Annie M

    He said he didn’t get it until after his deposit was made:
    “We didn’t receive American Queen’s contract until after they had charged our American Express account, and were not told of any cancellation fee on the phone.”

  • Annie M

    As a travel agent, we can be sued if we do not provide the terms and conditions of the travel supplier before the client makes a deposit. We aren’t lawyers but our lawyers advise us everything we have to do to avoid being sued by a client and one of them is disclosing the terms BEFORE a deposit is made.

  • Annie M

    I AM a travel agent and I speak from experience. To avoid a chargeback and a lawsuit, we are required to disclose the terms before a deposit is made.

  • Rebecca

    Let’s hope this time it’s in writing. I sympathize with the OP. He sounds like a reasonable person and he sounds like a great customer. Apparently he’s also a repeat customer. Shame on the agency for passing the buck.

  • Rebecca

    “Just cruises” is in their name. The irony.

  • Rebecca

    But if it’s easy to find on their website, it’s not excusable. This wasn’t buried somewhere pages in. It was readily available if they just looked. Which begs the question – who are the people that call with an easy question when it’s online much faster and there’s a guarantee of accuracy?

  • Rebecca

    The strange thing to me is that the agent called and asked, rather than looking online. I would think best practice there is a no brainer.

  • PsyGuy

    I thought you did everything?

  • Chris_In_NC

    Vogt is the victim here. He entrusted the agent to do their job, and the agent didn’t do due diligence and frankly speaks poorly for the agency. The whole point of using a travel agency is because you are relying on their EXPERTISE and guidance. If the agency wasn’t clear on the cancellation “policy” then maybe the agency shouldn’t be selling cruises on that particular line. I understand the agency probably ate $500, but it should have been a cash refund. Vogt is more than being reasonable here.

  • Chris_In_NC

    @disqus_kr5jPU4LSK:disqus
    The agent got screwed, but the agent failed to do due diligence. The agent was negligent.

  • sirwired

    It’s the agent’s job to be familiar with these things; that is what they get paid for. And the cancellation charges are usually in an easy-to-read table.

  • BubbaJoe123

    If the agent doesn’t have familiarity with the product they’re selling, they shouldn’t be selling the product.

  • Michelle Bell

    The cruise company was definitely American Cruise Lines, and their ship is the Queen of the Mississippi. Vogt does refer to it as the “American Queen” which is why all his references are in quotes.

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