Hey, where’s that refund on my all-inclusive vacation?

cancunQuestion: I’ve read your columns frequently over the past several years and always wondered if I’d ever need your help. Well that day has come. I need assistance in obtaining a refund from Palace Resorts. I paid $2,785 for a seven-day, all-inclusive vacation at their Aventura Spa Palace resort in Cancun, Mexico a few months ago. I had no problems whatsoever with that reservation.

But last fall, the Palace had a sale, and I was able to cancel that initial reservation and book a new reservation for a cheaper rate, saving me $278. I was told by the agent that my refund would be processed in six to eight weeks.

It didn’t happen. The credit card with which I made the original reservation was lost, so I had to send additional information to the company. Since then, I have not received any communication from anyone at Palace Resorts regarding my refund. I have sent multiple emails, and have been told each time that someone else who can help with refunds would contact me. I’ve tried everything, including contacting their public relations manager on Twitter and using “live” chat.

I’ve been promised that “someone” will get back to me very soon, but instead there has been zero communication in any form back from the personnel at Palace Resorts. Can you help? — Matthew Del Bontago, Berkeley, Calif.

Answer: Your refund should have been processed promptly. Not in six to eight week or six to eight months. The process should have taken about as long as it took Palace to remove the money from your credit card — that would be roughly six to eight seconds.

I’m willing to allow a little time for the credit card switch. Most travel companies have a policy that any refund must go back the same way it came. So in your case, they were trying to send it back to the credit card through which you made your purchase. But even the strictest policy must allow for credit card theft or loss. This can’t be the first time Palace had to refund to another card.

You went to great lengths to get your refund, and you did all the right things, keeping a paper trail, always appealing to someone higher up — and still nothing happened. By the time I got involved, almost three months had passed.

As an additional measure, you might have contacted your credit card company and disputed the first charge. The emails from Palace promising a refund might have been sufficient to push through a refund.

I contacted Palace Resorts on your behalf. It credited your card immediately.

As a postscript, Palace Resorts no longer owns the property you stayed in.

Should a travel company be allowed to keep your money if it can't process a refund to the original credit card?

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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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  • bodega3

    I understand the reason behind the refund to the original credit card due to security reasons, but it does become an issue when a card is closed out for protection reasons. If a card is just closed, I have had to have clients get their accounts reactivated in order for their due credit to be received. The poll is a bit unfair in that a company isn’t keeping their money because they want to, their policy has been set up to protect the purchaser. There usually is a way to work with them and sadly this one seems to have been hung up and it was good that Chris was able to assist.

  • TonyA_says

    When Chase changed my account number because they spotted fraud, they still linked the old number with the new one. So any credits or refunds on the old number were also credited to my new account. Of course I don’t expect the same if I switched banks.

  • TonyA_says

    Bodega, does CA SOT law require prompt refunds? The guy’s from Berkeley.

  • sirwired

    There is NO reason to simply utterly fail to process the refund one way or another. I could understand a delay while further verification was done, but that should not take months.

    And in any case, since the refund was processed promptly once Chris contacted them, apparently the issue was either laziness, incompetence, or the desire to hold on to the money as long as possible.

  • Nikki

    I’ve done that with quite a few guests… not sure how the hotel could have missed doing that, especially if all they had to do was verify the loss with the issuing bank and the last 4 of the new number. -smh- Any friggin’ excuse, eh.

  • http://elliott.org Christopher Elliott

    Wow, a “yes” vote. I love it when the industry apologists come over to play.

  • Jack

    The new and old numbers *are* always linked in the issuers’ systems. A refund would go through if done to the closed card.

  • William_Leeper

    Ah…not so always! I have had to do this before, and when the card was reported lost, my system declines the card completely! No charges, no refunds, no voids, no nothing! At the same time it is as easy as keying the new card number in. An expiration date and CCV2 are not even required for a refund. I can see both sides of this argument, but I wish I knew who the yes vote was.

  • backprop

    oh crud. I think because of the messed up layout (at least on my PC this morning) I just added another.

  • emanon256

    The same thing happened with me. Also Chase.

  • emanon256

    7 now. Thats crazy!

  • EdB

    Maybe if the card processor is using antiquated systems. I had an instance where I lost a card and called to report it immediately and it was cancelled right then. However, I had made a purchase with it that included a deposit. When I went to get the deposit back that day, there was no problem. In fact, the clerk said this was actually a common occurrence for them and there was never any issue with it.

  • EdB

    “it was good that Chris was able to assist.”

    This is another one of those amazing instances where when the customer can’t get the refund they are due because of some “technical” reason. Yet when Chris gets in contact with them the technical reasons suddenly disappear and, “It credited your card immediately.” Why weren’t they able to do that in the first place?

  • bodega3

    Since the OP didn’t go through a ‘seller of travel’ I dont’ believe the 30 day rule applies here.

  • William_Leeper

    Ok, as a policy maker for a business, I look at it this way. If I or an employee were put in this situation, I would NEVER refund to a different card. The exception is corporate purchase cards. A business is opening itself up to the possibility of fraud by doing this. With that said, it is 100% wrong for a business to keep the money. I would personally refund this by check sent to the address on the reservation. I never said I agree with them keeping the money, just that I see why they would be reluctant to refund to a different card!

  • Paul Higgins

    Chris, you wrote that “Most travel companies have a policy that any refund must go back the same way it came.” That’s true, but leaves out part of the story.

    I used to run the finance operations for a conference center. I actually took the time to read our contracts with Visa and the other credit card companies. (It’s not just consumers that need to read the fine print!) THEY were the ones who required that we make refunds back to the original card. THEY were the ones who told us it didn’t matter if the original card was lost, stolen or closed. We were to put the refund back to the original card and leave the rest to the cardholder and their bank.

    I suppose you could argue that we could have pushed back against that part of the contact, but what leverage does a 200-room facility have against these behemoths?

  • john4868

    Actually no I’m a merchant and my processor checks every refund against past charges. I can refund to any card I’ve processed in the past even ones that are now closed but can’t process a refund against a card I haven’t charged in the past. So you would get the refund against your closed account.

  • William_Leeper

    You obviously do not use Park Central Merchant Processing. If you did you would know that you are incorrect. I despise people who do not know what they are talking about, but insist on opening their mouth. I do not have to process a card to issue a credit to a card. If I issue it, it will apply. If the account is closed, it will decline. Sorry to bust your bubble, but when you use an old fashioned swipe terminal, it does not work the same way that the computerized processing does.

  • john4868

    @walhon you obviously aren’t the person who handles things in your office. I do it for mine. One to two times a month I get a call on a card refund on a charge that’s over 90 days old so it doesnt auto match in the system. Swipe terminals might let the refund go through initially but it gets stopped at the processor. We use both.

    Read below and you find out that I’m not the only one who is prohibited from the practice. Like you I’m not a fan of people who flap their gums without having a clue.

  • William_Leeper

    I process EVERY card that comes through our office, and I personally signed up for processing with Park Central. That said, I have had the occasion to issue 3 refunds, and 1 void. Only one of those refunds was issued to a different card, and I did “eventually” wind up calling my processor to clear the “pending” status of the authorization. I DO NOT deal with the general public, I deal with other corporations. Primarily I deal with American Express single use corporate purchase cards, and with the single use cards, that number is valid for 1 use for a set amount. That is the difference between what we do.

  • http://twitter.com/cydonia13 Jennifer

    Darn! My cat bumped me and I accidentally voted “yes.” I absolutely meant no!

  • http://elliott.org Christopher Elliott

    Thanks for filling in that detail. But what would stop you from refund to the customer via a check?

  • john4868

    It has to do with the credit cards fees (2 – 3.5%+). Most of the time the vendor gets those back on a refund. Nothing on a check. They should have just refunded the original card. The bank will get the money back to the OP.

  • Rachel

    I work in a hotel and I know from experience, on our system is it possible to process a refund to a card that is not the original one. However, it is not a function that we use very often and I know a lot of other people working here may not be aware of it. Most of the time in this situation, we would just cut the guest a check.

  • BobChi

    By check is probably the best solution, though imperfect. There are certainly people out there who look for ways to make purchases by credit card, then get refunded by check or some other cash equivalent. It can be quite a profitable game when you consider the benefits some credit cards offer. I’m pretty confident Chris’s correspondent here was a legitimate case, but companies do have to be careful, and I can certainly understand it taking more than seven or eight seconds.

  • AUSSIEtraveller

    are you sure that the 1st booking was refundable ? (it’s not was someone says, it’s wha’s in writing in your contract, that counts)
    If not, why would you have any claim at all ?
    Most holidays these days are completey non-refundable, unless you’re paying stupidly high rates.

  • TiaMa

    I recently discovered a fraudulent transaction on one of my credit cards. I reported it to the credit card company and they canceled my account and issued a new one. The representative verified all pending transactions and I verified which ones I had authorized.

  • http://rb-builders.net/index.php?option=com_k2&view=itemlist&layout=category&task=category&id=3&Itemid=116 Virginia Beach Builders

    That was really inconvenient. They should find another way to return your money. Is the refund already processed?

  • William_Leeper

    Absolutely correct. I must apologize for being clear as mud.

  • patseacruiser

    I have had my cards hacked so many times yet even when there is a refund needed to be made the bank somehow finds the right place to credit it. I don’t think the hotel really took care of it in the first place. That’s probably why so many travel agents work with tour vendors we can trust.

  • Paul Higgins

    Sorry, Chris. I wasn’t clear enough on that. Our contracts with the credit card companies said that refunds of credit card charges always had to be made by credit card, using the original card info. To issue a check would have violated those contracts.

    As John Baker pointed out, the merchant would have the credit card fees refunded. But that’s not the main reason for requiring that the refund go back to the card. Rather, it’s fraud prevention. If someone requests a refund and the merchant sends a refund by check, there’s always the risk that the customer could then dispute the original charge. The card companies won’t accept “but we sent them a refund by check” as a valid defense against a dispute.

    And as John also pointed out, it’s the responsibility of the bank issuing the original card to get the refund back to the customer, even if the account has been closed.

    If Palace Resorts had refunded Matthew’s original reservation back to his original card, the issue would be with Matthew’s bank, not the resort. From what you’ve written, though, it sounds like they didn’t do that.

  • TonyA_says

    Isn’t this case simply (stink) more about a vendor wanting to keep the money for the longest possible time?

  • Lindabator

    No – we have to have the refunds go back to the original card, and THAT bank needs to refund to the client – that’s per the contract with the credit card company. (Have had to do it myself when closed an old account).

  • Victoria

    I’m in the same boat. I booked a vacation for a girlfriend through our membership to the toon of over $5k. We cancelled after she broke up with her fiance, and it’s been 3 months. I’m stumped with what to do. No one will speak to me on the phone. I’ve sent emails to the address provided. Replies to the emails promise a phone call in three days that don’t happen. To whom did you speak? Please help.

  • Grant Ritchie

    Hi Victoria,

    I’m one of Chris’ moderators. I’d suggest that you go to the top of this page and click on the “Company Contacts” link. Often, you can find contact info for company executives who will help you cut through the red tape. If you don’t find anyone who can help you, click on the “Connect” link. That will allow you to make your case directly to Chris, and he can’t help you, no one can. Good luck!