My former editor used to say that giving a travel company money is a lot like pulling into a parking garage. Only after you’ve driven over something that looks like a speed bump do you notice the sign that says “DO NOT BACK UP — SEVERE TIRE DAMAGE.” And then you realize the money is gone and there’s no way of getting it back.
That’s the situation Barbara Watson found herself in after making a deposit on a Princess cruise. She had closed her credit card account, and Princess refused to refund the money to the new account, as it had for another reader. It wouldn’t even extend the credit on her deposit.
“I am so angry,” she said.
Was her money gone?
Not all of it. Here’s what Princess offered her:
At this time we have requested a credit in the amount of $100 per person. This amount will be applied to the credit card presented as payment. I note that the request that the refund not be sent to the original credit card. Unfortunately, I cannot grant your request. I have been advised that we must initially return the refund to the credit card on which the charge was issued. If the refund is returned to Princess, we may then issue a check for the refund. I am sorry for any inconvenience this procedure causes you.
Also, I note you have requested an extension of your credit as an alternative to a refund. However, corporate policy does not allow for an extension of this type of future cruise credit. Therefore, I must respectfully deny your request for an extension of a credit.
In other words, do not back up.
(I love the line “I am sorry for any inconvenience this procedure causes you.” Sounds like Watson is about to undergo painful surgery.)
I can understand why a company might have misgivings about refunding money to a different credit card. There could be problems with fraud. It makes sense to try to push a refund through and when the money is returned, to cut a check to the same passenger. As long as it’s done quickly, I wouldn’t have a problem with that.
Also, a business wouldn’t want to extend credit to a customer indefinitely, because it creates an accounting headache. But it’s bad for a customer, too, since the value of money typically declines over time. Which is to say $100 today is worth more than $100 in five years, unless we experience massive deflation, in which case we’ve got much bigger problems than a worthless cruise credit.
I suggested Watson appeal her denial to Princess. She did. Here’s what she reported back:
I have been denied again. They will not work with me. They will not extend my future cruise deposit that only tells me they do not want any future business from me. They said that they will not refund me in a check only to my closed credit card account.
I can’t tell you how disappointed I am on this matter. Cruising many many times since 1980 with them and this is how I am treated.
They really couldn’t give me a good reason for not extending my deposit other than it is “policy”.
I was unhappy with that answer, too. So I asked Princess to take one more look at her case. Here’s what they said:
We’ve looked into Barbara Watson’s complaint and because this is a fairly new expiration policy, we will make an exception and extend her Future Cruise Credit for another year. She will have to sail by Oct. 31, 2010, and our Customer Relations department will note this in her file.
Excellent.
So, to recap: Princess has good reasons for its refund and credit policy, but there’s also a time and place to be flexible.
I’m glad it found a way over this speed bump.
(Photo: Vidiot/Flickr Creative Commons)
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{ 16 comments… read them below or add one }
I could be mistaken on this, but my understanding is that a merchant MUST apply a credit to the card used for purchase first, per their merchant agreements.
If this is the case, Princess should have made this clear. But I’m not sure they had a choice in the matter.
CitiBank recently advised me that my card number had possibly been “compromised,” canceled that card/number, and issued me a new card/number. I suppose that Princess wouldn’t process a refund in such a situation. They will use any excuse to avoid taking care of the customer. I’ve never been on a cruise and never intend to go.
I believe Roberto is correct. I think that is a regulation with credit card companies.
I am glad that Barbara was able to reach a resolution that was satisfactory.
Dave,
I had the same situation with Citibank. However, in the situation where the bank switches your credit card number due to a possible compromise, the old and new credit card numbers are linked. Charges on the old number won’t go through after a certain date but in the case of a credit, Citibank would allow the credit to come through on the old account number and transfer it to the new account number.
If that’s true, then they probably couldn’t reveal that either due to any (?) confidentiality “agreements” or similar between them and their merchant. Not sure, either.
I am sorry, but it is unacceptable that a customer would have to pay because of the fine print in a credit card contract. This is not the company’s money. It’s Barabara’s. Princess has not right keeping it. It is theft.
Let me get this straight–you take the customer’s money and then you refuse to recognize it. Isn’t that called stealing? Without Chris’ intervention, Princess would not have returned this customer’s money. What a disgrace.
How come companies are SO QUICK to take our money, but so inept when it comes time to returning it. They seem to find every possible loophole which prevents them from giving it back. I know, the name of the game is profit, and you don’t want to lose it. Still, this was a REFUNDABLE amount and the money SHOULD HAVE BEEN RETURNED.
Here’s what I would have done if I were this lady. I would have contacted my previous credit card company and explained the situation. Clearly, the policy is in place to prevent fraud. Yet, the credit card company SHOULD BE ABLE to contact Princess and verify all customer information. There is ABSOLUTELY no reason the company cannot issue a credit to her previous account, and the CC company then issue a check. Should this not be possible, I guess her only other means would have been small claims. I guess the lesson here is DON’T cancel your credit card until you are certain all obligations with it are fulfilled.
Justin
As Roberto said, this is not a Princess problem. As a merchant you are required to attemt to refund to the original form of payment. If the card has been closed you are notified and then you are allowed to refund to other means. I have been in the travel business for over 20 years and this is nothing new it is just that we hear about it now because of people like Chris who try to help make things right. Maybe if more of these types of situations were known the credit card companies would change the policies, but I doubt it.
My credit card account was compromised (did you know there is a British equivalent to PayPal?) and subsequently closed. A new card was issued and all charges and credits were transferred. So far I am an echo of prior comments. However, my credit card company actually lost my credit for a canceled cruise (I still hear an echo). We dealt with the cruise line for a long time and then realized we might have better luck with the credit card company. It turned out they were at fault. It took a very savvy customer service agent to find our $1500. I agree with other people – look to your card company for resolution if you want a credit. It should be very simple, though it wasn’t in our case, to have the credit transferred to a new card or they will cut a check to you. Leaving that money in the cruise line’s hands is putting a burden on the traveler to use it or lose it. Not wise, not fair.
Regina, Did you even read the story. They would only refund it to her closed credit card and then when it was rejected, which it of course would be then they would cut her a cheque. Certainly this will take longer than she would have hoped but it’s well known that merchants can not return a credit card transaction to another card or cash for fear of money laundering. They never said they would not give her the money back they just told her there was a process that had to be followed. She might not have liked it, but it is what is it. You can not buy a sweater with a credit card take it back to the store and get cash back, same here only on a larger scale.
I work for a major credit card company. Allison was correct, credits will still come through on an account that was either closed per cardemember’s request or reported lost stolen. If Princess credited the closed account, the credit would show up typically within 3 days, and the customer would just need to call the credit card and request a refund check be sent. Unless a card number has been archived, I don’t see any reason for a credit to be rejected and returned to the merchant. I don’t understand why the customer didn’t want the credit issued to the closed account unless the credit card that was originally billed wasn’t in her name, so she wouldn’t have access to the refund. There is definitely more to this story as to why she didn’t want the credit returned to this particular closed account.
How exactly is Princess at fault for following credit card regulations?
I wouldn’t necessarily trust the credit card company to reject it, just because the account is “closed.” I once closed a checking account, but it sprung miraculously back to life twice when a check and then later a deposit, neither of which were supposed to exist, somehow cleared the account several months after the account was closed. I’d be scared to death they’d send the credit through to the closed account and it would clear and suddenly the credit card thief (assuming I closed the account because someone stole the number) would have another $1500 or so in credit at their disposal. Retail stores don’t have any problem crediting back the amount to a different card, as long as it belongs to the same person.
On the other hand, as convoluted as this story is, I really have no idea why she wants this handled in exactly this manner, other than the account is closed. Princess has a procedure for this, but that’s not good enough for the customer. I can almost see why Princess doesn’t want to work with her. Even given my history with the bank (see above), I question why all this hullabaloo is necessary.
Little known fact- if you intend to cancel and the original card is no longer in use, make a small charge to an active card. Then when you cancel, most companies will refund the money to the last card that a payment was issued from. Not sure if that is Princess’ policy, however.
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