Southall Travel struck a blow for all agents facing chargebacks from customers this month after contesting the automatic refund of a card payment.
The chargeback arose after a customer bought a long-haul return flight with Turkish Airlines through Southall Travel, and the outbound flight operated but the return flight was cancelled.
The customer paid for a replacement flight and accommodation following the cancellation, then raised a chargeback against Southall to recover the total cost of the original flights on their return.
More: Comment: When the industry fights back
The chargeback was upheld by the card-issuing bank despite Southall not even having taken payment for the flights, which was paid direct to the airline.
Southhall initiated a legal claim to recover the money and succeeded at a County Court hearing in Romford on August 2 which also rejected a counter claim from the customer for almost £3,000 in expenses to cover the replacement flight and accommodation.
The Judge found “no basis in law” for the customer to receive compensation from Southall Travel which had facilitated a contract between the customer and Turkish Airlines that “would provide for compensation”.
Travlaw partner Krystene Bousfield, who specialises in dealing with this kind of case, said: “It is great to see a company fight back.
“Cases like this are far too common and, just as common, travel companies feel they have no recourse, especially when the cost of doing so may outweigh the value of a claim.”
She suggested chargebacks can be “erroneously, ignorantly and sometimes fraudulently” made against agents.
Chargebacks can be initiated on debit or credit card payments if a customer disputes a transaction and, if upheld by the card-issuing bank, the amount taken direct from the merchant’s account.
The merchant, or retailer, faces not only the loss of the payment – which in the case of a travel agent will have been passed on to the travel organiser or supplier – but also must pay a chargeback fee.
More: Comment: When the industry fights back