| Journal: TWUK | Section: |
| Title: | Issue Date: 19/06/00 |
| Author: | Page Number: 3 |
| Copyright: Other |
Cancellations spark retailers to chase debts
OPERATORS have instructed retailers to chase bad debts after the trade lost millions of pounds in the ‘buy now, pay later’ marketing debacle.The industry was hit by up to 50,000 cancellations from customers who booked holidays under the deal but, as discounts rose, then cancelled and chose cheaper alternatives (Travel Weekly March 20).
Although agents already chase bad debts, the level of defaulters hit unprecedented heights.
Operators have also insisted on prising deposits from retailers to protect against their failure to re-sell cancelled holidays.
Cosmos sales and marketing director Paul Riches said:”If operators enter into a zero deposit deal with a retailer, they agree to be paid the deposit only when the customer pays up.
“In the event of a cancelled holiday the operator may agree to write off the deposit. This year however, operators have told agents to chase the deposits. The cost of administration and the risk of failing to re-sell the holiday is too great.”
Thomas Cook commercial manager Paul Wedgwood said: “A higher proportion of people than normal defaulted on deposits this year. We could not afford to write it off.”
Lunn Poly said customers had signed a contract which they were duty bound to honour.
A spokesman said: “We pay the deposit on behalf of the customer at the time of the booking. If the deposit is not paid at the time agreed, Lunn Poly risks incurring a financial liability.”
Retailers are now asking for an upfront payment of £50 for next year’s summer bookings.