Mark Pestronk
Mark Pestronk

Q: In last week's Legal Briefs column, you focused on possible new refund-related terms and conditions for tour operators, wholesalers and consolidators. However, retailers have also had a terrible time dealing with clients who want refunds. Some clients blame the retailer for a supplier's failure to make refunds, and other clients take up hours and hours of the retailer's time to chase refunds from reluctant suppliers. What new refund-related terms and conditions could be added to retailers' disclaimers to avoid or ameliorate such problems?

A: Disclaimers have typically stated that the agency has no liability for suppliers' acts or omissions or for events beyond the agency's control. However, with the current crisis, it would probably help to add clauses such as these:

• Since so many clients have accepted future-trip credits in lieu of refunds, and since some suppliers will undoubtedly go out of business before clients can use the credits, retailers should provide that the agency has no liability for a supplier's failure to honor future trip credits.

• If the client had a choice between a refund and a credit, and if the retail advisor recommended the credit, I can see clients claiming that the advisor was negligent in recommending the credit. Therefore, disclaimers should provide that the agency has no special knowledge of any supplier's financial condition and no liability for recommending a credit.

Even though the disclaimer may provide that the retailer has no special knowledge of a supplier's financial condition, a client could still successfully sue for a negligent recommendation if the supplier's financial difficulty had been reported in the trade press but not in media of general circulation. So, in addition to adding the foregoing clauses to the disclaimer, advisors need to read the trade press and warn clients about what appear to shaky suppliers.

• Retailers could start to provide for service fees for processing tour, cruise and resort refunds, and those fees would need to be disclosed either in the disclaimer or in some other written communication between the parties, such as an invoice or email signature.

• Where the retail agency is the credit card merchant, disclaimers need to discourage chargebacks by explaining that: a) the retailer's role is to facilitate the sale, collect funds on clients' behalf and remit those funds to the supplier; and b) the client's only recourse would be against the supplier. It would probably also help to provide that the client agrees not to initiate a chargeback against the retailer.

A frequent issue is whether it is necessary to get the client's signature on the disclaimer or whether, instead, it is sufficient to include it on the invoice and itinerary. Signatures will discourage some sales and slow the sales process for others, outcomes that obviously need to be avoided if business is to recover.

If you are the credit card merchant, your disclaimer must be signed, but otherwise, it is probably sufficient to attach it to the invoice and call the client's attention to it. 

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