It takes only a few seconds for an airline to take the money from your credit card. Why does it take forever and a day to get a refund?
The answer in a moment. But first, let me introduce you to Antti Seppala, the latest victim of an industry that has failed to put its customers first. He and his wife bought a package trip to Helsinki through Expedia in March, but had to cancel the trip.
He explains:
After the trip was paid, we received message from my wife’s relatives that her sister has suddenly passed away. The planned funeral date would have required an extension to this already-paid trip.
After complicated negotiations with Expedia, they agreed to cancel the trip with the exception of the airline penalty, $300. And we were told that this penalty fee can be requested back from the airline because of the circumstances for which we needed to cancel the trip.
Expedia agreed to these arrangements because we needed to at that point to purchase a new trip which would include the dates for the funeral. This new trip was considerably more expensive than the first canceled one but at that point we did not have much choices.
Seppala was led to believe he’d get a prompt refund of $300 from Scandinavian Airlines. But then Expedia sent him emails requesting extensive documentation about the family emergency that led to the cancellation, and it became clear to him that the refund wasn’t going to be immediate.
Now, at this point I have to say that I’m with Expedia and Scandinavian. You want to make sure all of your “I’s are dotted and “T”s are crossed, and that Seppala is truly entitled to the $300 refund. But a few weeks later, he reported back:
Expedia have either claimed that the documentation is insufficient or that they have not received it at all.
I have sent the documentation by fax and/or by US mail (to their Tacoma office) at least six times during the last three months and as you can see in their latest Email they now claim that they still need those same documents which they already have received long time ago.
Sure enough, he enclosed an email in with Expedia asked for more documents. Was it stonewalling?
I decided to contact Expedia on Seppala’s behalf. A representative promised to look into the matter right away.
On Aug. 10, he received the following email from his online travel agency:
Dear Antti Seppala,
Thank you for contacting us about a ticket refund.
We are writing to let you know that your request for a refund was approved by the airline.
The refund was processed to the original form of payment. Please allow 1 to 2 billing cycles for the credit to appear on the credit card statement.
If you have further questions, please contact Expedia customer services at 1-800-397-3342.
Please do not respond to this email address as it is not monitored.
Case closed? Hardly. Two billing cycles later, Expedia still hadn’t sent the money to Seppala. He was starting to get impatient. So was I.
But what can you do? We had no choice but to wait. Yesterday, I finally heard from him.
I received a message from my bank that the reimbursement of the $300 penalty will be posted to my account on Jan 4, 2010. So, I still have not received the money but now I feel certain that I will get it.
It took about 9 months to do this. Unbelievable.
Hey Expedia, there’s no excuse for this. You take our money in a split-second. You take nine months to return it. What do you think we are, a bank?
To be completely fair, this isn’t just Expedia’s fault (some of the credit goes to Scandinavian, too) and it isn’t the only travel company that does this. In fact, they all to it. This is just an extreme example.
So you wonder: why?
Over the years, I’ve heard a lot of explanations from the travel company’s side. It’s our technology. We don’t have enough staff. It’s the airline’s fault. But the excuse that rings truest is this one: We don’t care.
A travel company has no incentive to return the money quickly, particularly when you’re dealing with a discounted travel package from a consumer who is shopping for a product based on price alone. Put differently, Seppala probably wasn’t booking through Expedia out of any loyalty to the company, but because it was a good deal. If he finds a better deal through Orbitz or Travelocity the next time, he’ll buy there.
Why should Expedia care how fast Seppala gets his money back? It’s not as if he’s a high-value customer.
I think travel companies must be made to care. What if there were a law that said travel companies had to pay interest on customers’ money they held for more than 30 days? Do you think the refunds would happen quicker?
Bet on it.
(Photo: wicho/Flickr Creative Commons)
✓ Get the latest travel news, tips and commentary from Elliott’s E-Mail, the subversive newsletter from industry gadfly Christopher Elliott. You’ll travel like a pro. Sign up here. It’s free.
Sign up for my 
{ 25 comments… read them below or add one }
Better late than never, I suppose; still, nine months is ridiculous. It makes me think twice about booking my trip to. Turkey through Expedia, even though as of a few days ago it was a couple hundred dollars less than other sites.
Funny, how many of these kinds of problems have ‘Expedia’ in the title? I’ve had similar problems with Expedia. It seems they lack not only the incentive to do the right thing, but also compassion. The best message consumers can send them is to not purchase from them.
Even if the companies were made to pay interest, I still don’t think it would matetr to them because of the way they will calculate out the interest. They will make more money holding on to your money than it will cost them in interest. Perhaps a fee plus interest would get their attention a bit more.. Say $35 plus interest, the same as what banks charge people or what these companies charge returned checks and such. now trying to get them to comply with even that would be a challenge.
I am very sorry to hear of a loss in Seppala’s family. Dealing with a death in the family and also trying to deal with Expedia would have been trying. They have a right to have their money back immediately and should have interest tacked onto it. (Yet they still haven’t received their money and won’t get it back until January 4, 2010. because the bank can’t post it until then.)
I always purchase travel insurance to be on the safe side. Recently my father in law passed away unexpectedly six hours before we were to leave on a 2 week cruise. We received all of our money back in a timely fashion and didn’t have to fight with airlines or cheapo travel providers. Travel insurance could have saved them from this experience since Seppala did say that she suddenly passed away. (I am guessing that she didn’t have a pre existing condition)
Why would anyone travel outside the US without purchasing travel insurance? Not only was this client cheap but also not too bright.
There’s another reason they don’t want to pay off right away–THEY collect interest on the amount. I read a story recently where a large retail company started paying their creditors and suppliers 48 days later rather than the agreed 45 days–it ended up making the company millions of dollars in interest. Same here–they make money by holding it.
@Preston
First, that’s cold-blooded thing to say under these circumstances. Second, its not even true. Given the innumerable restrictions that many travel insurance policies have it may or may not have been a good deal. Also, many policies require additional premiums and only reimburse up to 75 percent of the trip. So in this case travel insurance probably wouldn’t have helped. Perhaps the OP is brighter than you think.
@Chris
I realize that you’re not a fan of loyalty programs, but you stated something very telling. The OP is not a high value customer because by purchasing through Expedia she basically stated that she was shopping on price alone. So Expedia doesn’t care about her. Had she been a member of the airlines loyalty program perhaps they would have been more expedious in returning her money. I’ve always gotten my refunds within days.
Technology, my eye. It’s the current despicable trend in many things…turn everyone down the first time…the second time…even the third time. They’ll give up, go away or maybe we’ll pay if they get a lawyer familiar with our tricks.
Well, thats nothing. I finally got my refund after 3 years and thats not even full. I got two tickets from a travel agent for Gulf air on two different credit cards on Feb of 2006 for the flight of May 2006. But had to return it and it was 1st week of march 2006. I got refund for one of the ticket by July 2006 but did not get anything for another one. After long exchange of emails and phone calls they finally decide to refund me couple of months back ( I guess sept 2009) and I didnt even get all my money back. While Gulf air told me that they god x amount and substracted $50 as return charge which is fine but the total amount I got was $250 less than what I paid. The travel agent that I used to get those tickets says that they got those tickets from another travel agent which is out of business now so they dont know what happened to my $200 and wont give me any money back.
Atleast I got $850 back out of $1100 I paid.
I’ve cancelled about 4-6 flights that I’ve booked on Expedia during the 24-hour window of opportunity, and the refunds have generally posted within 72 hours. Mine are pretty straight-forward and doesn’t involve situations as described above, however.
@ Charlie has it right. The telling part of this mess is the denial on the part of the carrier that they received Seppala’s documentation – several times. If they stonewall enough the claimant will go away … probably.
Kudos to Seppala and to Chris Elliott for holding their feet to the fire.
I recently had to abort a cruise aboard Royal Caribbean’s Liberty of the Seas due the my brother’s death. I had insurance and they said that they would reimburse me for the unused days of my cruise. I did not insure the cost of the port and government taxes because I had believed that these monies would be refunded in such a case as mine. When I asked Royal Caribbean to refund the unused portion of the taxes, they informed me that, since they had already paid these taxes to the various port authorities and the government, I could not get a refund. I am also a travel agent.
I would appreciate your letting me know if their reply is a valid one.My booking number is 2101328. Thank you.
Marvin Perton
Ref to Carter – Please refer to the subject matter where it states that the wife’s sister died. This is referred to as “sickness, injury, hospitalization or death of you, a family member, traveling companion, etc.
Family member means your or a traveling campanion spouse, domestic partner, child, spourse’s child, daugter-in-law, son-in-law, brother, sister, mother, father, step parents or step sister/brother, aunt, uncle, niece, nephew, legal guardian, caregiver, legal ward, or domestic partner of any of the above.
All good travel insurance policies sold by travel agents generally carry the same wording. It is best to know what you are talking about before responding to something in error.
Wait.. so because the airline stonewalled on refunding the $300 penalty, you think the online travel company should have somehow refunded it for them?
And then you go further and state that TRAVEL COMPANIES should be fined if the airlines choose not to refund the money back to the customer within 30 days?
“What if there were a law that said travel companies had to pay interest on customers’ money they held for more than 30 days?”
I enjoy your columns but I must ask: Have you started on the egg nog early this year? The AIRLINE held the money, not Expedia.
(no I don’t work for Expedia and have had my own share of problems with them, but this just seems ridiculous)
Why should the Travel Company be fined for the airline’s slow refund process?
@Les: There is a reason why Registered Mail service exists. Registered Mail CANNOT get lost. It is traceable, and an audit trail recorded, at EVERY step, to the point where it was delivered to the recipient.
I’ve admittedly never tried to do Registered Mail to a foreign address. I’ve had to do a fair amount of it in the US. You know your life is getting complicated when you find yourself doing Registered Mail more than once or twice a year.
Nine months? When Varig bankrupt I waited more than a year to get the refund for my ticket…
@Preston
First its Carver, not Carter.
Second, the point remains that although the death of the family member is covered, it doesn’t mean that there aren’t other restrictions in effect that must be considered. As an attorney, I read contracts daily and I see loopholds all the time.
Third, many policies only cover 75 percent of the cost. So if the OP paid over $1200 for the trip, travel insurance would NOT have gotten her the $300 in question.
Fourth, insulting the OP under these circumstances remains hard hearted.
@Wayne
I think Chris was saying that whoever was holding onto the money would be the one who would be responsible for any interest, penalties, etc.
So if you paid Expedia for an airline ticket it would be the airline who would have to pay interest if the refund was delayed, unless the airline sent a timely refund to Expedia. In which case, Expedia would then have to timely send a refund to the customer.
@Preston
First, Its Carver not Carter
Second, while the sister’s death is a covered event, the OP still needs to be mindful that there may be other caveats with a Travel Insurance policy.
Thirds, most policies cover only 75% of the costs. So if the OP spent more than $1200, then the policy wouldn’t have given him the $300 in dispute
Fourth, calling the OP cheap and not bright is still a cold hearted thing to do.
From the article: “To be completely fair, this isn’t just Expedia’s fault (some of the credit goes to Scandinavian, too)…”.
Disagree. The customer booked with Expedia, not with Scandinavian, and how Expedia does business with Scandinavian should be irrelevant to the customer.
But why did Expedia get involved in this in the first place?
From the article: “…we were told that this penalty fee can be requested back from the airline…”.
If this is true, then why are the customers still dealing with Expedia instead of dealing with the airline directly? This doesn’t make complete sense.
Generally speaking, contracts or legal agreements between a business and their affiliate or reseller would “force” the former to refer the latter’s customers to them. If the business “helps” the customer like, say, take over their product concerns, the reseller or affiliate might “accuse” them of “stealing their business” and “breach of contract” unless the terms indicate such.
I’ve noticed that for some businesses, their point of view (POV) is to let their affiliate or reseller take care of certain issues. Sure the business can handle it, but only if they choose to.
One can argue that how Expedia does business with Scandinavian shouldn’t be relevant. Unfortunately Expedia, or some companies for that matter, doesn’t always have the luxury of arguing something with its partner or so.
How to force the issue, you got me.
@David and Anna
Thinking of this transaction as a reseller/wholeseller will only muddy the point. This is more akin to an agent/principle relationship (Hence the name travel AGENT)
Expedia is acting on behalf of the travel provider. Expedia doesn’t independently set prices or policies or anything. Its like when you buy a house. If something goes wrong, the real estate agent doesn’t refund you the money then works it out with the other side.
By comparison, if Expedia were a consolidator, i.e. where it actually bought the ticket for itself then resold the ticket such as Hotwire or Priceline, then you would be dealing directly with them, not the travel provider.
That’s a better way to understand it, Carver. Thanks.
Carver,Thank you again for your legal expertise. Your posts are always well received. You refrain from emotionaloutbursts and name bashing,
Our family vacation was set 19 months ago to Turks and Caicos. A hurricane hit the island, resort and airport was closed. Beaches gave us a full refund. However,American Airlines will not/refuses to refund $5100. I bought the tickets thru American Express Travel who also accepts no responsibility. We were given airline vouchers. We all work except for the 6 and 9 year old. We need to work. Two relatives from California lost $1600 from Delta Airlines. Two relatives traveled somewhere else. Seven of us, in Phoenix were dumb and bought NO insurance. I’ve learned but I still want the money back. Are there any avenues I could follow? American Airlines has “used” our monies for 19 months. Anyone have a suggestion or another way to be successful and get our money back?