Advantage has temporarily suspended use of its Central Advantage Payment System (CAPS) as it struggles to process “volume refunds”.
In a letter to suppliers and members seen by Travel Weekly, Advantage said the system had not been designed to process the level of refunds currently being experienced.
It said the system was “flowing in the opposite direction to the traditional flow of funds”.
CAPS is used to facilitate net payments between members and suppliers. It is not used to pay agent commission.
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“Members and suppliers are having to take exceptional steps in order to preserve and manage their cashflow position, placing the safe and efficient system at risk,” the letter said. “A risk too great for Advantage to permit.”
“We are acutely aware and fully appreciate the impact that this will have on both members and suppliers, however we were unable to establish a solution which mitigates the financial risk for all parties.”
Members are being asked to make their own arrangements for processing payments and refunds.
A statement from Advantage said the temporary suspension of CAPS was a “difficult decision” and it was “very sorry that members and suppliers will be affected by this action taken”.
“It was a necessary step for us to make as the risk was deemed too great at this unprecedented time.
“Provision has been put in place to assist members through this period with the member intranet site providing a source of resources via the coronavirus hub.
“The suspension of CAPS is a temporary measure and we will continue to monitor the current trading climate with a view to bringing CAPS back on-line as soon as it is viable to do so.”