What’s the difference between a cancellation penalty and an administrative fee?

Mistakes happen — it’s a fact of life and of business. But when a mistake by two companies results in a customer losing $500, who should reimburse the client? That’s what Henry Vogt wants to know. His case raises some important questions about disclosure and ethics that could affect your next travel purchase.

Vogt made reservations on an American Cruise Lines cruise on the Mississippi River through Just Cruises Plus, a travel agency he had used before. When he requested information on ACL’s cancellation policy, the agent called the cruise line while Vogt was in the office. The cruise line’s representative told the agent that there is no cancellation penalty if the traveler cancels more than 90 days before departure. Vogt paid his deposit and started planning his vacation.

Of course, if Vogt had cruised on American Cruise Lines and had a wonderful time, we wouldn’t be here. So you know what’s coming next, don’t you? Vogt canceled the trip, but the entire deposit was not refunded — American Cruise Lines kept $500 of his money.

Vogt’s first request to be reimbursed was to his travel agent. Just Cruises Plus reiterated that it had been told by American Cruise Lines that there would be no cancellation penalty and began making calls to try to get the money reimbursed by the cruise line.

After not hearing back from Just Cruises Plus that he would receive a full refund, Vogt disputed the charge with American Express. In his letter to the credit card company, he noted:

“My wife and I feel that American Queen cancellation charge of $250 each is fraud,” he says. “They went out of their way in not disclosing this fee.”

He added,

We didn’t receive American Queen’s contract until after they had charged our American Express account, and were not told of any cancellation fee on the phone. We were advised by the phone call from Just Cruises that we could cancel up to 90 days before sailing. We canceled less than 24 hours after our phone call and as soon as we received the printed contract.

I believe this was a deception on the part of American Queen and purposely done.

American Express sided with American Cruise Lines.

According to Vogt, Just Cruises Plus continued to maintain that the reimbursement should come from American Cruise Lines, not from the travel agency, but American Cruise Lines maintained it was entitled to keep the $500. Vogt certainly could have used the contacts we list on our site for American Cruise Lines, but he appealed to us instead, and we reached out to Just Cruises Plus.

When our advocate contacted the travel agency she was told American Cruise Lines had made the mistake, not the agency, and she questioned why the agency was “being targeted” by us. She suggested we should be targeting American Cruise Lines.

But should we?

Two of the things you should be getting when you use a travel agent are an expert and an advocate. You’re looking for assistance from someone more educated than you are about a complicated business, and you’re also hoping for an advocate who will go to bat for you, should something go wrong. Just Cruises Plus definitely seems to have failed the Vogts on the first point, and possibly on the second.

While Vogt doesn’t question that American Cruise Lines told the travel agent that there would be “no cancellation penalty,” one look at the passenger information on the ACL website would have told the agent (and Vogt) that, “All cancellations will incur a non-refundable $250 per person cancellation administrative charge.” The site also offers a Cruise Cancellation Protection Plan and lists a “refund schedule for any monies received without Cruise Cancellation Protection Plan.” If cancellation is made 91 days or more prior to the sailing date, the refund is 100%, but it’s important to note that there is an asterisk next to this number. This asterisk corresponds to a note that repeats, “All refunds will incur a $250 per person charge.”

This information is also clearly stated under “Cancellation Terms” on the first page of the confirmation that American Cruise Lines emailed to the travel agency.

I believe American Cruise Lines’ claim that a customer receives a 100 percent refund while simultaneously stipulating that a $250 administrative fee is charged on every cancellation is intentionally misleading. But that’s why you hire a travel agent — to weed through confusing company rules and regulations.

The fact that I found the ACL policy in less than five minutes leads me to believe the agent should have been able to find the same information. If she asked the cruise line both if her clients would receive a 100 percent refund and if there would be any administrative fees, then I might feel differently about “targeting American Cruise Lines,” but this doesn’t seem to be the case.

One of our forum advocates suggested that since Vogt had requested his money back five months before contacting us, he should think about filing a complaint against Just Cruises Plus with the American Society of Travel Agents (ASTA) if the agency did not resolve the issue quickly. I wondered if this was an option for Vogt and checked its Code of Ethics. First on the list is accuracy:

ASTA members will be factual and accurate when providing information about their services and the services of any firm they represent. They will not use deceptive practices.

To be clear, I don’t believe Just Cruises Plus used deceptive practices in this case. But I do believe it failed to provide accurate information about American Cruise Lines.

The second item in the Code is disclosure, which includes “…other terms and conditions, of any travel service sold, including cancellation and service fee policies.” It’s clear that the full story of the cancellation penalties and fees was neither determined nor disclosed.

Just Cruises Plus claims it was actively advocating for Vogt with American Cruise Lines, but after five months without resolution, it is reasonable for Vogt to question the agency’s responsiveness, which is the third responsibility in ASTA’s code of ethics.

In his correspondence to us Vogt has maintained that he does not believe that the agency was at fault for the loss of his money, and I while I may question its adherence to the letter of the Code of Ethics, Vogt clearly believes the agency at least abided by the spirit of the Code, and I seriously doubt he would ever file a complaint.

One of our forum advocates also mentioned that reputable travel agents have liability insurance that covers errors and omissions. While true, this insurance is usually activated in more catastrophic cases than a $500 administrative fee that the agent failed to uncover.

In the end, we’re left with a cruise line that set up misleading terms, a travel agent who did not uncover the cruise line’s fees and a consumer who lost both a vacation and $500.

The outcome of this latest game of “blame the other company” is that Just Cruises Plus chose to make this right for its client. While still claiming the problem is the fault of the cruise line, the agent issued a $500 “goodwill credit” to Vogt, which he can use on any future cruise — except American Cruise Lines. While Vogt would have preferred cash, after five months, he wants the entire ordeal to be over. When assured that the credit does not have an expiration date, Vogt accepted the offer and plans to book with Just Cruises Plus again soon.

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