Hey Royal Caribbean, where’s my refund?

Ruth Peterkin / Shutterstock.com

Today’s story of corporate intransigence comes to us courtesy of Royal Caribbean. At least it does if Kara McMonagle is to be believed.

And based on what I’ve seen, and my own experience of dealing with cruise lines, I believe her.

In 2012, she booked a cruise to Alaska for her, her husband and her parents. But shortly before her cruise, her mother shattered her femur and couldn’t go. The family rescheduled the cruise for last year. “But she is still unable to go,” she says.

Now what? McMonagle asked RCCL for a refund, and a cruise line representative suggested to her in writing that she’d get her $14,000 back. But then she received some bad news: Since she’d canceled her American Express card, the money would remain in limbo.

We can only refund the original form of payment reflected on reservation regardless of the status of the cards and can only issue check refunds if and when the card issuer has returned the processed refunds to us.

Additionally, American Express does not return processed refunds, thus, the credit card issuer would need to issue the refunds received to the card holder’s new credit card / account or at their discretion.

In other words, RCCL sent the money back to her card, but her card may do what it wants to with the money. Whatever that something is, it’s not the cruise line’s problem.

That was unacceptable, of course. McMonagle spoke with an RCCL representative by phone, who told her the cruise line would figure out another way of getting the money to them.

“She specifically stated it would not go back to that card,” she says.

McMonagle asked her credit card about the refund. Here’s what a representative told her:

Refunds should NOT be issued to the cards once they are terminated. The way our system works is that refunds issued go to a general account and then get moved to the appropriate cardholder.

Since you no longer have the cards, this money will just sit in the general account. It can easily take over a year for the funds to then be returned to the merchant once we determine that you are no longer a cardholder.

It is quite a mess and ultimately we do not issue checks to you; we return the funds to the merchant to handle, which can add even more months to the process.

But that hasn’t happened — at least not yet.

After a series of follow-up calls, RCCL canceled the new cruise and issued her refund to the closed card anyway.

“We actually had asked that nothing be canceled until we could guarantee the refund would not go to that card,” says McMonagle. “So now we have a canceled trip and no refund.”

RCCL’s policy, which is in line with that of most other companies, is that “all monies paid will automatically be processed back to the original form of payment.” But that assumes the customer wants to cancel, and it also assumes there will be provisions made for customers whose cards are canceled.

Apparently not.

RCCL stopped responding to McMonagle’s queries, at which point she reached out to me in exasperation. I reviewed the correspondence and I agreed with her — RCCL was jerking her around and it remained unclear who, exactly, had the $14,000.

One thing that was unclear to me — and this might actually explain the missing refund — is that someone at RCCL recognized that, in the end, she wasn’t entitled to any refund at all. The timeline on the request was a little unclear. Was she within the cancellation window? It’s possible that, upon further review, RCCL determined she wasn’t, and then simply shut down its correspondence.

I contacted RCCL on McMonagle’s behalf. The cruise line did not respond to me.

I’m reluctantly closing this case.

Should McMonagle have purchased travel insurance? Sure. Should she have kept her card active while she was seeking a refund? Absolutely.

It’s been a year since the McMonagles were supposed to take their cruise, and I’m holding out hope that the money may be moved from the general fund into their correct account. But then, I’m an optimist.

In the end, this may be about a big cruise line keeping your money just because it can.

I expected better from RCCL. Much better.

Did Royal Caribbean handle this case correctly?

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Christopher Elliott

Christopher Elliott is an author, journalist and consumer advocate. You can read more about him on his personal website or contact him at chris@elliott.org. Got a question or comment? You can post it on the new forum.

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  • TonyA_says

    I don’t get the part that the credit card company won’t process it. Sure they do. They will cut you a check for any money left in a closed account. I got one many years ago. The vendor stills owes you a refund and it can cut the check itself.

  • sirwired

    Both RCCL and AmEx screwed up here.

    The AmEx rep should have known that they CAN, in fact, issue refunds on closed accounts; they simply cut a check upon request when that happens.

    RCCL, of course, should not have issued a refund to the credit card when they said they wouldn’t.

  • JenniferFinger

    I agree. RCCL was told not to issue a refund to that credit card and promised it wouldn’t, and then reneged. Then Amex decided to keep the money that was clearly not intended for it. Big customer service fail.

  • TonyA_says

    14 grand on a cruise to Alaska? WTF. People must be crazy.


    Chris is right in saying that the timeline is a bit muddled. We know from reading here that cruise lines seldom, if ever, refund late cancellations or allow re-scheduling with no penalties. However, if RCCL said they would be refunded and put it in writing then a prompt refund is what is required. Credit card companies regularly refund overpayments as well as issue checks for refunds made to closed credit cards. It may take a bit longer (I had one last year that took 45 days) for all the paperwork to be processed but it can and should be done. This is not rocket science after all, it is simply rather basic accounting.

  • sharpasice

    About 4 yrs ago I had the exact same thing happen with RCCL ..I had closed the acct where I made my original payment and a few months later, had to cancel the cruise…luckily I did not make other cruise payments to that card. All other payments were returned within days except the initial $200 ..to date, I have STILL not received that payment and have given up. I think the rule sucks and think Royal (and the other cruise lines, since they all pretty much do the same) should send the person a check not refund cc.

  • Richard Smith

    If the bill is not paid off, that’s a back door to a cash advance — usually more expensive. Or worse, suppose I was expecting that $14k refund, but defaulted on the credit card in the interim. Free money!

    That;s why the refunds go back to the original means of payment.

  • Kathryn Carver Binau

    RCCL refunded the money to the original form of payment – that is SOP for purchases whether that is a $7 purchase at Target or a $14,000 cruise. If she put that much money on a credit card – she should have kept the card until after the vacation or in the event she had to cancel. It is also not American Express’s problem to find her money after her card was cancelled. It is unfortunate for her because it is a lot of money and maybe Amex will eventually get it to her.

  • Alan Gore

    I’m fluent in spoken and written corpspeak. RCCL’s statements here translate as “We spent too much this year on norovirus lawyers to be able to honor our contractual commitments.”

    And no, travel insurance should not be used as a screw-you-and-get-away-with-it card for providers.

  • jerryatric


  • emanon256

    I have had refunds issued to closed credit cards before, and in most cases, the credit card issued a check to me. It took a few extra days, but I got my money back. In fact, AmEx has been the best about this. I did have a refund recently go to a Chase card that I closed, and Chase returned it to the merchant, who then cut me a check. That process took an extra month.

  • emanon256

    It’s an industry practice to issue a refund to the form of payment in which it was made, in fact, it’s required in most merchant agreements. Also, AmEx is very good about cutting someone a check on a closed account, and they do it very quickly in my experience.

    Yes, RCCL can cut the OP a check, but then they have two separate transactions in two separate ledgers and that opens up a whole can of accounting worms. First off, they have to move the money form their credit cleaning account to their separate A/P account. Sounds easy, but imagine doing that on a regular bases and reconciling it? It’s not as easy as it sounds, so it’s an industry no-no. Also, imagine if the OP closed her card because she maxed it out, and is making the minimum payment every month. You can close a card, or have it closed on you, and still pay it off over time. Suddenly she gets a check for money she owes to the credit card company, that just defeated the integrity of the credit card system, this it’s why it’s forbidden in merchant agreements. If the card is till open, she just got a cash advance at the purchase rate, which is also why its forbidding in merchant agreements. Now, the crazy scenario, which I have seen too many times. OP gets a note that she is getting a refund in writing, and gets a check for the refund. She can then go dispute the charge on her credit card and win, because she has it in writing, and the credit card shows no refund has been processed. She will then win, get a refund on her credit card, and also have been paid. She will have gotten double her money back. Because the merchant is required to refund via the credit card, and didn’t, they loose and are out $14,000 actual cash, in addition to the refund. Sadly, this happens a lot when people do favors and refund cash or check to a credit card payment.

    I am not saying the OP would have done any of these things, just explaining why the refund must go to the form of payment. I think RCCL needs to provide the OP with the actual refund transaction information and her real complain is with AmEx. AmEx is being ridiculous here.

  • Mel65

    It seems like a lot, but when my hubby and I cruised to Alaska, the cruise plus airfare package was 5K for us, so for 2 couples, 7K per couple if they upgraded cabins, etc… isn’t as horrible as it looks at first blush.

  • Joe_D_Messina

    Not understanding this one, either from the credit card company side or the cruise line. What if her card had been stolen and a new account had been started? She’d be totally out of luck regarding a refund on the old card? That makes no sense at all and I’m not seeing a significant difference between that scenario and what actually happened. Seems like either the card company or the cruise line should have been able to make this right.

  • Joe Julio

    What if the card was canceled because the cardholder was the victim of fraud? Merchants need to figure out a better way to handle refunds when the original card has been closed as I think everyone I know has had a card closed for fraud.

  • Mel65

    If her card were closed due to fraud, they would have issued her a new card/number but linked them for just such situations. Sadly enough, that’s happened to me more than once. There is something a little odd about putting 14K on a card, rescheduling the cruise once and then cancelling both the card and the cruise a year later and insisting that RCCL NOT put the credit back on that card. Just something fishy to me about the whole thing.

  • bodega3

    When they close an account due to fraud, they provide you with a new account number. Been there a few times.

  • bodega3

    Yes, it is to prevent money laundering.

  • $16635417

    Timeline questions. When the OP originally had to postpone the cruise, was a refund an option? The reason I ask, is because if she was not able to cancel, but RCCL agreed to reschedule the cruise, the original amount paid should still be non-refundable.

    If the refund was indeed due, then RCCL should process that back to her card, becuase, as others have pointed out there may be circumstances with AMEX that RCCL may not be aware of, outstanding balance, fraudulent activity..etc.

    At that point it becomes between her and AMEX to make arrangements to get the money back.

  • emanon256

    The CC merchant system also links the old and new account so its completely seamless.

  • Lindabator

    Unfortunately, vendors do this due to the amount of fraud they’ve experienced in the past – this way ensures they are not in violation – my problem is with the credit card company – they know it is a cancelled card, so why not just send on the payment refunded? I had cancelled an old Visa, and although it took another billing cycle, they did refund to my new card.

  • Lindabator

    That’s why I question AMEX here.

  • Lindabator

    Why – they refunded something after 2 years – not their fault AMEX isn’t cooperating with the client – it is due to fraud practices (money laudering, etc) that is at the root of refunding to form of payment.

  • Lindabator

    And one reason why it always goes back to same form of payment

  • Lindabator

    AMEN! RCCL really was generous in refunding this at all — not THEIR fault EX is not cooperating.

  • TonyA_says

    I’m cheap so it still looks horrible :-)

    You mean the cruise line refunded ALL of them because they could not re-do? (Even for the able-bodied passengers?) What a miracle! No wonder they haven’t seen any money yet.

  • TonyA_says

    This is not typical of AMEX (I mean the problem).
    Note the original transaction was 2012. They were (I assume) given a year to re-do. But in 2013 they still could not make it. So are they now just trying to get a refund? When did she close her AMEX account -2012?
    I find it very difficult to believe the whole story, sorry.

  • TonyA_says

    +1 happened to us many times.

  • TonyA_says

    It is really hard to believe AMEX is rejecting to receive $14k from RCCL.
    I would like to hear from AMEX what is really going on here (but I know that is confidential).

  • TonyA_says

    I always thought that if AMEX was rejecting the refund transaction, the “money” goes back to the merchant and the merchant has the right to settle it with customer in cash/check.

  • Joe_D_Messina

    Sounds like a big mess. I’ve never really considered the details of how things work until now, but I routinely get credit card offers trying to get me to transfer balances. If that had happened here, I wonder if this is what would have occurred? That would leave a dead account like this. And people must take those offers all the time because some of the deals they offer are quite enticing.

    Just seems odd to me that both the cruise line and the card company seem to be acting like this is a highly unusual situation when it seems to me it must be relatively common.

  • bodega3

    I have never encountered any vendor, in travel, that wouldn’t stand by the policy of refund to original form of payment. I had one that took months to get settled.

  • TonyA_says

    This transaction might be more than 1 year of the sale. Look at the dates mentioned in the article.

  • bodega3

    Also worth noting, is that not all AX cards are the same. There is only one true AX card, the rest are aligned with another card company.

  • bodega3

    I am not sure time is a factor. The times I have had to request refunds, the policy was very clear. It could vary, but it seems pretty clear cut in the travel industry.

  • ORguest

    Taking an extra month to process a canceled-card credit seems not completely unreasonable. How would it take a year to clear up the McMonagles’? That sounds like they’re hoping the customer forgets.

  • TonyA_says

    Here’s what the AMEX Merchant Manual has:
    If the Card Member indicates that the Card on which the purchase was originally made is no longer active or available, do the following:
    – For all Cards except Prepaid Cards, advise the Card Member that Merchant must issue the Credit to that Card. If the Card Member has questions, advise him or her to call the customer service number on the back of the Card in question.
    – If the inactive or unavailable Card is a Prepaid Card, apply Merchant’s usual refund policy for returns.

    Looks like catch 22 for the OP.

  • TonyA_says

    Emanon, can you please figure this out for me.
    I know Reg Z has the rules, so I looked it up. It says this …

    §1026.11 Treatment of credit balances; account termination.

    (a) Credit balances.
    When a credit balance in excess of $1 is created on a credit account
    (through transmittal of funds to a creditor in excess of the total
    balance due on an account, through rebates of unearned finance charges
    or insurance premiums, or through amounts otherwise owed to or held for
    the benefit of the consumer), the creditor shall:

    (1) Credit the amount of the credit balance to the consumer’s account;

    (2) Refund any part of the remaining credit balance within seven business
    days from receipt of a written request from the consumer;

    (3) Make a good faith effort to refund to the consumer by cash, check, or money order, or credit to a deposit account of the consumer, any part of the
    credit balance remaining in the account for more than six months. No further action is required if the consumer’s current location is not known to the creditor and cannot be traced through the consumer’s last known address or telephone number.

    (b) Account termination.
    (1) A creditor shall not terminate an account prior to its expiration
    date solely because the consumer does not incur a finance charge.

    (2) Nothing in paragraph (b)(1) of this section prohibits a creditor from
    terminating an account that is inactive for three or more consecutive
    months. An account is inactive for purposes of this paragraph if no
    credit has been extended (such as by purchase, cash advance or balance
    transfer) and if the account has no outstanding balance….

    Am I right to say that AMEX is off the hook after 6 months of the account closing?

  • emanon256

    I interpret it as stating that they can hold the money for up to 6 months if they do not receive notice, after 6 months they have to make a good faith effort to refund it using all know information on that consumer. However, (2) it stating that they have to refund it it within 7 business days if the consumer requests it.

    So in the OPs case, they need to refund it within 7 days from her request. If the OP didn’t request it, AmEx could hold her money for 6 months, and then must return it unless they exhaust all efforts in trying to contact her. While not documented here, after 6 months if they were unable to contact her, I assume the states abandoned property law would apply in and the credit would have to be turned over to the state treasury.

  • TonyA_says

    What do you mean there is only ONE true AX card?
    Are the others not true?
    Whether AXP issues a charge card or a credit card, they are both coming from American Express – which became a bank holding company during the 2008 Financial Crisis so they can suck the golden t*ts of the Federal Reserve and get TARP money.

  • TonyA_says

    Yeah but do they have the obligation to do so if the account is closed?

    Do they have to process the refund request at all after some length of time?

    Can they simply reject the refund transaction coming from RCCL after the card account is closed?

  • TonyA_says

    I have often read advice not to close an account if you are expecting credits on that account. I guess that was, is good advice.

  • bodega3

    My AX card is part of Macy’s. I know there is a term for these type of accounts but I can’t think of it at the moment. When the AX part of my card was recently fraudulently used, it was hell dealing with Macy’s. I actually called AX directly and was told they had no access to the AX side of my card, that it is all with Macy’s and not a part of them.
    Since AX is not widely accepted in our area, I have no need to get a true AX card, but I do know that a true AX card has great benefits for customers in need.

  • emanon256

    Most of the merchant processors I worked with were responsible for accepting the refund and returning the balance to the customer, as it is a refund on a transaction that occurred while the account was open. However, some merchants had a 6 month transactional data purge clause, so if an account was closed, and the customer didn’t have a balance, the specific transaction data was purged after 6 months. Therefore only a general credit could be processed (not tied to the transaction), and in those cases the merchant bank would attempt to identify the customer and return the funds, if they couldn’t, they would return the funds to the vendor and mail a letter documenting the specific transaction, stating that the account had been closed and the customer can’t be refunded, and they would authorize the vendor to refund the customer by check or cash. I did have the ladder scenario happen a few times.

  • emanon256

    My wife has the same card, and its really annoying because the sometimes accidentally apply her payment to the AmEx side, rather than the Macy’s side, and then charge her late fees on the Macy’s side.

  • TonyA_says

    Thank you very much for explaining this.
    Added: looks like the OP has more months of waiting.

  • TonyA_says

    OMG! That’s horrible. I think we had a case here about that same issue. So when you buy at Macy’s the Macy account gets charged?
    But when you buy anywhere else, the AMEX account gets charged?
    Very confusing.

  • emanon256

    My pleasure, I used to work with systems that automated most of this for many years as a consultant and do miss it.

    I am still shocked by AmEx’s answer, it should not take that long, most of this is automated.

  • whatexit

    American Express cannot process the refund because the account used to make the purchase no longer exists. In fact, it is as though the account never existed at all. I am unaware as to why companies are inflexible as to the destination of refunds. I would imagine their are legal reasons for this policy.
    In my estimation this is a case of a customer performing due diligence. As anyone knows, and as Mr Elliott points out, most merchants will only refund back to the account from which the funds were originally paid. With that said, if one makes a large purchase, keep the account OPEN.

  • whatexit

    One of our dream trips is an Alaskan cruise. Given the high cost, It will remain a dream.

  • Charles B

    That’s not always an option. At the current rate of credit card fraud in the US, I have my VISA replaced for me every 6-9 months. (Thanks so much, Target, for the last one!) How exactly am I supposed to keep an account open after it’s used for fraud?

  • bodega3

    Having dealt with this many times, they can process it but it takes the owner of the closed account to contact AX and let them know the situation. If the account was just a general close, they temporarily reopen it. If it was closed due to fraud, then they link the closed account to the new one, as they reopen you a new account when they close the one due to fraud, and the credit gets posted there. The cruise line doesn’t not handle the contact with the travelers credit card company, the traveler must do that themselves.

  • TonyA_says

    I absolutely cannot figure out AMEX’s possible logic here.
    It’s like they never want to have anything to do with the OP ever again. Very strange.

  • bodega3

    If you have a new card with the same company, they can do it.

  • TonyA_says

    Well that is the question. Did she get in touch with Amex to get this done? If not, why not? If I had 14k coming to me, I’d call Amex every day.

  • bodega3

    A lot of store cards are an inhouse card and either a VI, MC or AX, too. So, yes, for in store purchases, the revolving account is charged, for charges at any other location, their VI, MC or AX side gets charged. Until our AX side of the Macy’s card was fraudulently used, I thought it was a true AX card and I had the AX protection. WRONG!

  • emanon256

    Their response is also downright inappropriate. First of all, its partially wrong, and its telling the customer to get lost. When I was supervising a call center (My staff also e-mailed), if anyone wrote something like that they woudl be in serious trouble. That is not how you talk to a customer.

    I think its a rookie agent who sort of knows what goes on, and is trying to help the company and sound important.

  • Lindabator

    AMEX is partners with a lot of companies (like the Delta Skymiles AMEX) – but the bennies are different, and you do NOT get everything the same as if it was issued as a straight AMEX

  • whatexit

    yes, that’s correct. The difference is that is still the same account. Just a different number.
    In the case of the person who purchased the cruise, she cancelled her account. There’s a difference.

  • whatexit

    And that is where one must perform due diligence.

  • bodega3

    But with both, you can get a refund to the card. One would be to a new numbered account and just linked. The other would be reopened which a card company will do.

  • Alan Gore

    If RCCL did hand over the money to Amex, why didn’t they forthrightly state this to the OP and to Chris. and give the date when it did so? It would have been clear at that point that the problem lies with Amex.

    When a company clams up and refuses to talk to anyone, to me that means GUILTY.

  • Rebecca

    If it’s closed for fraud, it can easily be moved over in their system. If you call, its there in a day ir two. If you let it sit, it will move over within 30 days.

  • TonyA_says

    I think the OP is very lucky that RCCL is giving them a refund after they did not want a redo (I suppose after a year).
    Does it take this long to recover from a shattered femur?

  • TonyA_says

    It seems to me they could be violating this section of Reg Z.
    All the OP has to do is write them and call them to ask for her money.

  • emanon256

    I couldn’t agree more. The title should be, “Hey AmEx, where’s my money?”

  • TonyA_says

    Sounds like Elliott should help her draft a letter to Amex.

  • bodega3

    I hope you get to take an Alaskan cruise! For cruises, they do tend to be higher, but it is a short season, so they make hay while they can.

  • omgstfualready

    I’m confused. The article states at the onset “And based on what I’ve seen, and my own experience of dealing with cruise lines, I believe her” indicating cruise lines are painted with a broad brush of stubbornness. Yet it concludes with “I expected better from RCCL. Much better”. Why would expectations be high when clearly the author is stating out of the gate the OP was treated as expected?

  • omgstfualready

    I’ve not ever had a single problem with AMEX (personal or Corporate accounts) so I still think RCCL is messing with the transactions. The one year AMEX would refer to is likely due to State escheatment laws if the ‘general’ account is being treated as funds due to a lost customer. Escheatment is expensive and messy for financial institutions and they are glad to have the customer come to them for the money. It still smells of RCCL.

  • omgstfualready

    Probably got a branded card for points or whatever to help pay for the trip and when the year was up and the annual fee due canceled the card. AMEX probably not involved at all.

  • TonyA_says

    If AMEX knows here name, address, phone number, etc. then she is not a LOST person. All she needs to do is tell Amex RCCL is refunding her old credit card and she wants Amex to cut her a check within 7 days of receipt.

  • omgstfualready

    Accounts are not closed for fraud, you simply have a new card number. The account underlying the activity remains open.

  • commentfromme

    I suspect she has a balance and defaulted on the card. Do you know why the account is closed? This is a key element of this story.

  • Guest

    No such thing as ‘free money’ (and never use ‘free’ here please, :-) ). All unclaimed funds are escheated to each State per their own laws. If you hear on the news to look on your State’s website as you may have money due to you, it is the law to have that published. And the States audit this hard, they want that money and most states have gone from forcing the money to go to them from 5 years to 1 year and some are considering 6 months (hello California). AMEX and RCCL cannot keep it indefinitely.

  • omgstfualready

    I don’t think the money is really at AMEX. If it is a branded card (which is what it smells like, open it for the credits to help pay for the trip and cancel when the 1 year fee is due) the company that has the brand deals with it. I really would be surprised if AMEX had that money.

  • Toni Ziffer Schultz

    I know there is a term for these type of accounts but I can’t think of it at the moment.
    The term on the tip of your tongue is ‘branded’.

  • bodega3

    Thank you Toni!

  • http://www.jetsetterscruises.com JetSetters

    Royal did what they were supposed to do. Cruise lines always refund money in the original form of payment. The fact that Amex is saying they can’t refund the money is bogus. Any major credit card company issues refunded money by check or to the new credit card account. Amex dropped the ball on this one, not Royal.

  • DChamp56

    Only the OP screwed up. #1, get travel insurance on such an expensive vacation. That’s common sense. #2, NEVER close a credit card until EVERYTHING is cleared on it. No exceptions. #3, If RCI is right, and she was past the refund date, it was fully within it’s rights to keep her money. After the refund date, that’s when the travel insurance kicks in. So, in the end, RCI and AMEX did nothing wrong. It’s their policies. JMHO

  • Joe Farrell

    There is a huge difference between a credit back to you and new charge when it comes to a closed credit card account. Not too many fraudsters out there giving money TO people . . . .

    It always astonishes me when I have to go through 15 levels to identify myself on the phone when I want to PAY a bill. I give you an account number and a name – thats prob good enough. Not too many folks actually pay other people’s bills . . . .

  • IGoEverywhere

    Chris, I would not close this case, but try again with RCCL….contact Vickie Freid and she will get you to the proper person. Rccl can exactly track where the money was ans where the money is now. That way you can evaluate if it in RCCL’s or AX’s hands.

  • k lincoln

    Google Kara, she scammed many people including myself. Dont believe anything she says. Her mother was part of the scams as well. She took peoples money and forged documents. She is a scam artist