Mark Pestronk
Q: For two years now, I have been keeping track of our clients' future travel credits (FTC) for flights and cruises that were canceled in 2020 and 2021. This has been a nerve-wracking experience because so many clients are unhappy with the terms of their FTCs and want refunds. Is this unhappiness a common experience, and if so, what can be done to force the suppliers to offer to turn the credits into cash, even if their rules don't allow for it?
A: Traveler dissatisfaction is widespread because FTCs have so many problems associated with them. Here is the catalog of issues that I have collected so far:
• FTCs were often unilaterally imposed and not wanted. Clients wanted refunds and have been upset because they could not get them, even in cases where the supplier canceled the trip.
• They often had unreasonable deadlines. In the most extreme case, Frontier Airlines' credits had to be used within 90 days or they would be forfeited. However, even a one- or two-year deadline has been unreasonable in some cases.
• Credits often couldn't be used because personal circumstances changed. For example, a graduation or senior class trip became pointless a year or two into the pandemic.
• FTCs often can't be used because there are no good trips left. Flights are full and cruises are sold out these days, so there is often nothing to book.
• Prices have often increased beyond the value of the credit. Cruise lines especially have been increasing prices lately, so even a 125% credit won't be enough to cover the price of the same or a similar cruise.
• Insurance companies may consider them equivalent to a refund. At least one insurer has taken the position that it won't provide a refund after the FTC is accepted, even if the policyholder had no choice.
• Credit card companies may consider them equivalent to a refund. Some card issuers have refused to reverse the charge because the cardholder had no loss or because too much time has passed after the FTC was accepted.
• Some FTCs have probably become worthless because the supplier has gone out of business, such as Crystal Cruises and some tour operators.
I know of nothing that can be done to force a supplier to issue a refund. The DOT has shown no inclination to regulate FTCs. Except in the case of Air Canada, it hasn't instituted formal proceedings against any air carriers that have refused to make refunds for flights that the carrier canceled or substantially delayed.
The Federal Maritime Commission, which has the power to order cruise lines to provide refunds for cruises that they cancel, has not taken any action against any cruise line. It has issued a proposed rule, but by the time it finalizes it later this year, it will certainly be too late to have any effect on cruises canceled because of the pandemic.
More Legal Briefs columns on FTCs: