Mark Pestronk
Q: Because of the recent multihour wait times at security checkpoints at some major U.S. airports, some of our clients missed their flights and just went home. I strongly suspect that, within a few weeks or a month, we will get some debit memos from airlines because the clients charged back nonrefundable fares. For cruises, resorts and tours, I also suspect we will be hearing from the suppliers after the client initiated a chargeback. Finally, for clients for whom we acted as the credit card merchant of record, we will probably get chargebacks notices from the credit card company. Obviously, we shouldn't have to pay for these client losses, but how do we defend ourselves?
A: Of the three chargeback scenarios -- airline debit memos, reimbursement claims by other travel suppliers and chargeback notices where you are the merchant of record -- the hardest to defend will probably be airline debit memos. Since you have no direct relationship with the credit card company that charged back to the airline, you have to deal only with the airline to respond to its debit memos, which are usually sent through ARC's Memo Manager.
You obviously have no liability to the airline, but it is often hard to persuade the airline of this fact. In Memo Manager, you would point out that the fare was nonrefundable and provide proof by citing the fare basis. However, this is sometimes not enough to make the airline desist from collection efforts, as some airlines appear to have policies requiring you to pay regardless of fault.
If, like many travel advisors, you are an independent contractor of a host agency, defending is probably even harder because you do not have access to Memo Manager, and your host agency may simply deduct the debit memo from your compensation.
In the worst case, your host agency may have its own upline host for airline ticketing, in which case you may never even get to find out what the deduction was for.
The second scenario -- claims by cruise lines, resorts and tour operators -- should be easier to defend. The supplier's own terms and conditions probably state that no-shows will be treated as cancellations subject to a 100% penalty.
Writing a business letter to the supplier pointing out its own relevant terms and conditions should be enough. If it isn't, then check to see whether you have an agreement with the supplier, stating that you are responsible for chargebacks. If you don't have one, the supplier should not be making any claim against you.
In the third scenario, your response to the credit card issuer should have: a) a very concise statement of the facts, b) a copy of the terms and conditions stating that payments are nonrefundable, c) proof of the cardholder's agreement to the terms by a signature or check box and d) proof that the refund and cancellation clauses were brought to the cardholder's attention before acceptance.
In my experience, if you have all four of these provisions in your response, the credit card company will rescind the chargeback.