Travel agents facing double-hit on credit card fees

Travel agents are taking a double hit on credit card fees when refunding holidays that have been cancelled as a result of Covid-19, according to new research.

Nearly three quarters (74%) of Scottish Passenger Agents Association (SPAA) members responding to a survey by the trade body said they had lost out on card fees after returning cash to their clients.

Agents have been losing their commission for booking the holidays in most instances when processing full refunds while consumer campaigns have been arguing against the use of refund credit notes as an alternative.

With the added cost of credit card fees, which the SPAA says card firms are charging twice on cancellations, many agents are making a loss on their work – having processed both the booking and the refund.

The survey found that 31% of agent respondents who had suffered credit card loses lost around £500 in a month, while 35% lost in the region of £200.

Of those agents who had experienced losses, 93% lost money with a Visa transaction, 90% had suffered with Mastercard transactions and 69% of agents said they had lost out on debit card transactions.

“It’s a perfect storm for agents,” said SPAA president Joanne Dooey, who represents the association’s 120 members. “Unlike almost all other sectors, travel agents don’t receive fees for their work – which can be on behalf of several travel partners per booking – until just weeks before a client’s departure.

“The tsunami of cancellations and refunds means that the travel agent will never receive any fees for the work they did many months ago as they face refunding clients in full.

“Losing money over and above the full cost of a client’s travel through credit card charges is the straw which breaks the camel’s back. This money is coming directly from the pockets of our members. The credit card companies should be refunding the charges back to the agents or introducing a handling fee charge to customers.”

The SPAA survey also found that many agent members are refunding their customers out of their own pockets before receiving the money from suppliers.

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