Are travel agencies about to make a money grab on refunds?

By | March 23rd, 2016

Remember that animated discussion about whether travel agencies should be able to impose their own cancellation penalties?

I suggested this act of keeping a refund — even when an airline had surrendered the money — was rare. But that was before I heard from Robin Mewoh.

She recently booked a Singapore Airlines ticket through a brick-and-mortar travel agency in order to attend her mother’s funeral.

“A few minutes later, I found a much cheaper fare with ANA,” says Mewoh. “When I called the travel agent to cancel, he informed me that I’d get an $800 penalty fee for cancellation.”

That’s odd. Under the Department of Transportation’s (DOT) 24-hour rule, Mewoh should have been able to receive a full refund.

“I checked Singapore Airlines’ cancellation policy and US DOT’s guidance on the 24 hour reservation requirement,” she says. “Both state that there is no penalty fee if canceled within 24 hours of purchase.”

So what’s with the $800 cancellation penalty?

Well, that would be the travel agency imposing its own cancellation fee, which Mewoh agreed to when she used the agent.

“I have emailed the travel agents a couple of times, but have not received any reply,” she says.

In order to avoid the $800 fee, she agreed to accept a credit on Singapore Air. That way, she’ll only pay $250 and reuse the credit, instead of losing $800.

But the problem goes far, far beyond one little agency socking a grief-stricken daughter with an unconscionable cancellation fee. Given that we’ve had two agency-cancellation penalties, it makes me wonder if we’re not looking at the beginning of a trend.

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I mean, imagine what would happen if one of the large online travel agencies got on board and started charging a nonrefundable $25 “cancellation” fee even when a full refund is issued under the 24-hour rule for cancellations, or for a death in the family? Think of all the money they could steal — uh, I mean, make.

Are you as disgusted by this as I am? To be clear, these are full refunds being given by suppliers, with middlemen essentially helping themselves to the money. They are doing nothing to earn it.

This is an area where the DOT can do real good by issuing guidance that clarifies who should get the refund, and how much. Consumers deserve to get all their money back. No fees should be charged for getting the refund. Full stop.

I’m still trying to understand the other side of this argument. What makes anyone think they are entitled to part of a refund? Why should an agent be able to charge Mewoh $800 for canceling her flight? There must be someone who can present the argument in a way that consumers can understand.

I’m still waiting.

Should travel agents charge cancellation fees even when a client gets a full refund?

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