The transport secretary has backed travel companies issuing ‘vouchers’ to customers whose holidays have been cancelled as a result of the coronavirus, as long as a cash refund is also an option.

Grant Shapps backed Abta’s stance in the government’s daily coronavirus briefing after being asked a question by a member of the public who pointed out many firms were missing the 14-day window to refund for cancelled trips.

Charlotte from Coventry asked: “Many travel companies are acting unlawfully by not providing refunds to customers following the cancellation of holidays within reasonable timescales. What is the government doing to ensure that people can get their money back?”

Shapps used the term voucher rather than refund credit note when he said: “It is absolutely the case the holiday companies can offer you either a voucher or offer the money back. Ultimately, they have to offer you the money back if that’s what you prefer.

CommentWhy clarity on refunds remains elusive

“Sometimes the holiday companies will give you a voucher or propose extra time to use it, or even give you a greater value… so you have the choice there.

“But ultimately it is the responsibility of these travel companies to pay you your money back.”

Shapps added: “It’s important that these travel companies do treat their customers properly. I will be doing everything I can to encourage them to pay back or offer a voucher if that’s what the individual consumer wants. But we can’t have a situation where they are just hanging on to money. I will be very happy to follow up on that.”

Since the refunds issue raised to prominence amid mass cancellations at the start of the pandemic, Abta backed its member travel firms using refund credit notes, which it says carry the same financial protection as the cancelled holiday they would replace – meaning the customer will be entitled to a cash refund in the final instance.

It is calling on the DfT to confirm publicly that refund credit notes carry the same protection.

But Which? Travel editor Rory Boland said: “Millions of people that should have been refunded within two weeks for their cancelled holidays have now been waiting months to get their money.

“Some travel companies are openly breaking the law on refunds, and the government has to do much more than simply encourage those businesses to pay back the money customers are legally entitled to.

“The regulator must use its powers to take a tough stance against airlines and operators playing fast and loose with the rules, while the government should step in with support for firms that need it to fulfil their legal obligations to their customers.”