Mark Pestronk
Mark Pestronk

Q: With the latest wave of omicron-related cruise cancellations, there must be tens or even hundreds of thousands of travel agency clients who have been trying to apply their future cruise credits (FCCs) again and again, without success. Either the cruise line cancels the rebooked sailing, sometimes more than once, or the client wants to cancel it. Further, in some cases, clients have not been able even to find a suitable cabin on a suitable future cruise because the cabins are sold out using FCCs. Finally, there are many clients holding credits who will never be able to use them, such as elderly people who are now too infirm to travel, honeymooners who are now long-married, and students who have already graduated. Is there any way for our agency's clients to force the cruise lines to make cash refunds at this point?

A: The problem you cite is fairly new and has received no media coverage that I have seen: Some agency clients have been, and probably will continue to be, simply unable to use their FCCs.

As you know, what one can do with an FCC depends on the terms of the client's agreement with the cruise line when he or she accepted the FCC. In most cases, those terms provided that the FCCs were not convertible to cash.

So, even if the rebooked cruise gets canceled, there is no right to a refund, unless the original terms so provided. As far as I know, no cruise line has such terms.

More on FCCs

Here is what Norwegian Cruise Line's (NCL) FAQ on FCCs states, in response to the question, "What happens if the canceled booking had a previous FCC applied?"

"Bookings under this circumstance are not eligible for a cash refund and will receive the original value of the FCC back to the guests' profile. ... Note FCCs have no cash value and cannot be redeemed for cash."

However, NCL then offers a way out: "To offer our guests even more flexibility for future vacation planning, some under some circumstances who hold outstanding future cruise credits may submit a request to convert their FCC to a monetary refund .... Any guest wishing to request a monetary refund (of their original cruise fare paid and in lieu of their active FCC, including bonus amounts) must submit a refund request via the Guest Relations Case Submission page ...."

So, NCL is saying that, notwithstanding the FCC terms and conditions, it may provide a refund at its discretion, and other cruise lines probably have similar terms on their websites. However, such terms do not give your client any legal rights.

Nevertheless, I believe that a client (or a class of clients) could develop a sound legal case for a refund under the doctrine of "frustration of purpose." This doctrine invalidates an agreement if a basic assumption on which the contract was based proves to be wrong.

Here, the basic assumption of both parties was that the FCCs could actually be used, and mostly due to unforeseen circumstances, that assumption has turned out to be wrong. 

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