Does a “full refund” for a cruise include crew gratuities and port fees?

Just what constitutes a “full refund”? James Peterson is asking this question after Norwegian Cruise Lines (NCL) canceled his cruise.

Unfortunately for Peterson, when a travel company promises a “full refund” to its passengers, it can define the term to exclude any costs it sees fit, such as gratuities and taxes — and passengers trying to recover any unrefunded costs may find themselves adrift.

Peterson contacted us following a 12-day cruise in Australia and New Zealand on the Norwegian Star, a ship with a troubled propulsion system that had resulted in changes to the itinerary of the previous cruise.

Apparently the propulsion system problems had not been adequately addressed when the Star set sail again from Sydney, on course for Auckland, New Zealand. On the fourth day of the cruise, the propulsion system failed entirely off the coast of Melbourne, Australia, requiring the ship to return to port for repairs and to cancel all its remaining ports of call. The ship arrived in Auckland just in time for the end of the cruise.

As on the previous occasion, NCL offered the Star’s passengers a refund of their cruise fares. Everyone on the cruise received a letter signed by the captain and NCL CEO Andy Stuart, hand-delivered to their cabins, which promised that “all passengers onboard [sic] will receive a full refund.” The passengers were also offered a 50 percent future cruise credit with a number of restrictions.

Several weeks later, Peterson saw a credit for the cruise fare on his MasterCard statement. But that was the only cost NCL refunded to Peterson. There was no credit for $900 in taxes, port fees, gratuities, and other expenses NCL required the passengers to pay before boarding the ship.

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Peterson submitted a claim for $900 to NCL. A representative of NCL replied that “our records indicate that the refund amounts issued is [sic] correct and that no further refunds are due. Please note we are not refunding the port taxes….Regrettably, we are unable to honor your request for additional compensation and extend our apologies.”

According to Peterson, “In our case, $900 isn’t going to make or break us financially. It may not even dissuade us from sailing again with NCL. It simply is the principle of the matter — NCL promised one thing, in writing, but delivered something less.”

Peterson might have escalated his complaint using our executive contacts for NCL, especially given that the promise of a full refund was in letter signed by the CEO. He asked our advocacy team for help in securing a refund of the remaining $900 in cruise costs.

Unfortunately for Peterson, NCL’s Guest Ticket Contract absolves the cruise line from any liability for canceled or changed itineraries:

Itinerary Deviation: The Guest agrees that the Carrier has the sole discretion and liberty to direct the movements of the vessel, including the rights to: proceed without pilots and tow, and assist other vessels in all situations; deviate from the purchased voyage or the normal course for any purpose, including, without limitation, in the interest of Guests or of the vessel, or to save life or property; put in at any unscheduled or unadvertised port; cancel any scheduled call at any port for any reason and at any time before, during or after sailing of the vessel; omit, advance or delay landing at any scheduled or advertised port; return to port of embarkation or to any port previously visited if the Carrier deems it prudent to do so; substitute another vessel or port(s) of call without prior notice and without incurring any liability to the Guest on account thereof for any loss, damage or delay whatsoever, whether consequential or otherwise.

As far as NCL is concerned, it didn’t owe the passengers a single penny of compensation for their canceled cruise and Peterson should feel lucky to get back anything.

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But Peterson is also correct that if NCL intended to refund only the base fares, then the letter the Star passengers received should have contained language that indicated that only the base fares would be refunded and the other costs would not. Using the term “full refund” for what was actually only a partial refund was misleading and poor customer service – on top of placing the passengers on a ship that wasn’t fit to sail.

Our advocates invited Peterson to post about his case in our forums, but he hasn’t done so as of this writing. We also reached out to NCL on Patterson’s behalf, but nobody at NCL has responded to our inquiries. Sadly, Peterson’s quest for the remaining $900 has foundered.

But is a refund of only the base fare and an offer of a heavily restricted 50 percent discount on a future cruise sufficient compensation for putting the passengers on an unseaworthy ship?

We think not.

Should NCL compensate James Peterson and the other Star passengers for the additional costs they incurred that were not refunded?

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Jennifer Finger

Jennifer is the founder of KeenReader, an Internet-based freelance editing operation, as well as a certified public accountant. She is a senior writer for Elliott.org. Read more of Jennifer's articles here.

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