UKICC | The UK International Consumer Centre

Travel Cancellation Refunds

Travel Cancellation Refuns

If your travel plans have been cancelled by the operator, then you may have the right to a refund. This advice only applies when the company (or operator) cancels travel plans. It doesn't apply if you wish to cancel your travel bookings yourself.

 


Getting Your Payment Refunded

If your holiday, flight, ferry, cruise, or train gets cancelled, you have the right, under various EU laws, to your money back. However, given the unprecedented times the world is currently facing, in light of the Coronavirus/COVID-19 pandemic, many companies are offering refunds in the form of rebooking or a voucher to be used when worldwide travel restrictions have been lifted. This may be a faster remedy and you can of course accept this option.

Some European governments are currently putting in place emergency laws for such arrangements with a push towards consumers negotiating with holiday/travel companies in order to find a mutually beneficial solution. This is mainly due to the fact that most businesses are faced with huge cash demands at a time they are not fully operational. Consumers, where practicable are being encouraged to compromise.

There is no legal obligation on any passenger to accept a rebooking or a voucher, and you can insist on a refund, but at this time there may be long delays before monetary refunds are processed and pursuing through the courts will be a lengthy process.

 

1.  Flight Cancellations

Regulation 261/2004 on Air Passenger Rights provides that in the event that the airline cancels, the passenger will be entitled to a refund, or re-routing to their final destination. Some airlines have been offering vouchers to allow passengers to travel at a future date, and some airlines have removed the online refund facility to push passengers into accepting vouchers. Passengers are within their rights to accept the vouchers, but there is no legal obligation to. If you would rather a refund, you do not have to accept the voucher, and you can insist on a refund instead. However, under the current extraordinary circumstances, it may be some time before these can be processed and governments are encouraging consumers to negotiate with companies in order to reach a mutually suitable resolution. Airlines are obliged to provide the refund within 7 days but given the unprecedented nature of the effects of coronavirus/COVID-19 pandemic, this is very likely to take much longer.

 

2.  Hotel Cancellations

Hotel bookings will fall under the contract law of the country the hotel is based in (this is usually the case, though the terms and conditions should specify). If a hotel cancels the booking, then under law, they are unable to supply the service that you have 'contracted' for, and should refund you. If a hotel offers vouchers instead of a refund, you can accept, but you don't have to. You may be able to insist on a refund instead. However, under the current extraordinary circumstances, it may be some time before these can be processed and governments are encouraging consumers to negotiate with companies in order to reach a mutually suitable resolution. If the hotel has not cancelled the booking, but you wish to cancel, you do not have the legal right to your money back so it is worth checking the terms and conditions of the booking. Sometimes hotels allow you to cancel and claim a refund and information on this is usually found in their cancellation procedure.

 

3.  Package Holiday Cancellations

The Package Travel Regulations provide that where the operator cancels the holiday, they must provide a refund or option to rebook and the consumer has the right to choose which option they prefer. If you wish to use the Regulations when making a claim to your holiday provider, ensure that the holiday you have booked is in fact a package holiday. Please see our advice on package travel here.

 

4.  Ferry Cancellations

Regulation 1177/2010 provides that if a ferry service provider cancels a ferry service, they must refund or rebook you. You will be able to decide on what you'd prefer and a ferry operator cannot refuse to refund you. Under the law, refunds must be provided within seven days but given the unprecedented effects of coronavirus, we advise allowing ferry companies more time to process refunds. However, under the current extraordinary circumstances, as with other holiday/travel services it may be some time before these can be processed and governments are encouraging consumers to negotiate with companies in order to reach a mutually suitable resolution.

 


What to do if you're only offered a Voucher

We are aware that many travel companies (particularly airlines) are pushing consumers towards a travel voucher instead of a refund. Some companies are even removing the refund option from their online refund process. A number of governments across the European Union are currently implementing emergency laws to protect businesses and consumers during the pandemic, by requesting that consumers work with businesses in order to reach a mutually suitable outcome to cancellations etc as some business may hit financial difficulties if refunding all cancelled services and monetary refunds may take a long time to be processed.

However, if the travel company or hotel are only offering a voucher, and you would prefer a refund, we advise that you write to the company to inform them of your preference for a refund. You can email or write a letter to the company but be sure to keep a copy for your own reference. This will come in handy should you need to escalate the case further.

Where some laws state that refunds must be provided within seven days, the unprecedented effects of coronavirus has caused delays in companies being able to respond to all communications and therefore we advise to allow the travel company a longer time in which to process your refund.

 


Paid by Credit or Debit Card?

If you paid by credit card, and the cost was over £100, you can make a claim under section 75 of the Consumer Credit Act 1974. This provides that the credit card company is jointly liable for a breach of contract or breach of law. This means that if the travel company refuse to refund you, you can make a claim with your credit card company directly. We suggest that you contact them and ask to make a 'Section 75 Claim'.

If you paid by credit card and it was less than £100 or you paid by debit card (any amount), you will have a similar claim under the chargeback procedure. Unlike section 75, chargeback is not a legal right, but more a voluntary procedure that is carried out by the banks.  The procedure allows a consumer to dispute a transaction made using that card, resulting in the consumer claiming the money back from the bank. As this is a voluntary process, the banks set their own timeframes in which you can claim. If you wish to claim using this process, we advise that you contact your bank and state that you want to start the chargeback process.

However, under the current extraordinary circumstances, it may be some time before these can be processed and governments are encouraging consumers to negotiate with companies in order to reach a mutually suitable resolution.

 


For further information on Section 75 claims or Chargeback, please visit our dedicated page.