Asata recently held a webinar with advice for agents on how to navigate the refund process during the pandemic. The association says, while there is no hard and fast rule book for the current situation (COVID-19 is putting contract and consumer laws to the test in ways that legislators never imagined), there are various interpretations of the laws.
The association stresses the importance of consistency in dealing with refund requests. It recommends that agents prepare their own refund policy document and ensure that staff are adequately trained on how to process refunds during this period. It is also extremely important that all correspondence is in writing and is kept on file, including correspondence with both clients and suppliers.
Whether or not a refund is due to your client depends on a number of variables, including the following:
Is the client a consumer or not?
Consumer protection laws apply to individuals and small businesses (with an asset value of less than R2m) but not to companies.
What was the reason for the cancellation?
Suppliers have a right to charge cancellation penalties if the client was disinclined to travel but not if the service was cancelled by the travel service provider or cancelled due to a travel ban.
Is the supplier based in South Africa?
South African consumer laws apply to suppliers that have physical offices in South Africa. However, the CPA can also apply if the transaction is deemed to have been concluded in South Africa. This is determined by the time and place where the offer is deemed to have been accepted.
Many suppliers are not in a position to pay out mass refunds at present. Asata says the consumer goods and services ombudsman is currently advising clients to be reasonable and accept vouchers in instances where travel has become impossible. However, the ombudsman does still recognise that, according to consumer protection laws, clients should in many cases still be entitled to a refund.
The association recommends that if a supplier refuses to give a client a refund, the agency should communicate this to the client and recommend they accept the voucher or credit offered to them. If the client still insists on a refund, the client should then lodge a complaint with the consumer goods and services ombudsman against the travel service provider if they wish to take the matter further. In the event that an agent receives a legal letter of demand from a client who insists that they are due a refund, Asata has prepared a template for the agent to use for their response.
The association says, according to consumer protection laws, suppliers may not charge cancellation penalties if a client is unable to travel due to testing positive for COVID-19, or dying due to the disease. If an agent does manage to get a refund for their client the association advises that this must be passed on to the client. Agents are entitled to charge a ‘booking management fee’ for the services rendered. This should be outlined in an agency’s terms and conditions, however, says Asata.
Many clients, frustrated by supplier refusals to provide them with cash refunds, are considering contacting their banks to enact chargebacks on travel transactions purchased by card. But according to Asata, if the government issued a travel ban, the consumer does not have ‘dispute rights’ and will need to resolve the matter directly with the supplier. However, if the supplier cancelled the travel service, dispute rights may apply but the client must be able to show that they have tried to resolve the dispute with the merchant before the bank will consider reversing the transaction. The laws of the country will still apply and the transaction will not be reversed if the client was not entitled to a refund.
A step-by-step guide to refunds is available for agents to view on Asata’s Coronavirus microsite, together with refund templates prepared by the association.