Should my tour operator keep $8,471 to “cover” costs of a canceled tour?

Tia Millman and John Madsen were looking forward to a private tour of Tunisia and Kenya organized by Experience It! Tours last summer.

But the trip wasn’t meant to be. Just three weeks before their departure, the State Department warned U.S. citizens to avoid Kenya, and Millman made a frantic call to their tour operator.

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Now, Millman and Experience It! are bickering over a refund — a sizeable refund — and she wants me to get involved. I’m not sure if I should.

Millman says Experience It! canceled the tour, a decision with which she agreed.

“We had given an initial deposit back in 2012 of $4,750, which we were fine with Experience it! Tours keeping for all their efforts,” she says.

Experience It! refunded $16,431, “but they refused to return $3,721 they said was needed to cover their costs.”

Hmm. So Experience It! pocketed $8,471 for a tour it canceled? Something didn’t look right.

My first stop was Experience It’s cancellation policy. If Millman had initiated the cancellation 21 days before the tour was to have left, she’d be entitled to 50 percent of the tour expenses. If, however, Experience It! canceled, then she’d be entitled to a full refund.

Here’s the specific language:

Security Cancellations: Experience It! Tours, LLC reserves the right to cancel any tour at any time if we feel that the safety of the travelers may be compromised. The refund of all payments received constitutes a full settlement.

Next, I reviewed the correspondence between Experience It! and Millman. Indeed, it appeared as if Experience It! had initiated the refund.

“We have cancelled both the Tunisia and Kenya tours and are checking on the precise refund available and will do our best to recover as much as possible,” a representative wrote in an email. “And as also discussed possibly holding your deposit over for a future tour with EIT if you like.”

The correspondence doesn’t make it absolutely clear who initiated the cancellation, though. Was it Experience It!, acting on the orders of the client, or had Experience It! made the decision itself?

I contacted the company to get some clarification. Unfortunately, the response was less than helpful, and came directly from the top:

We appreciate your efforts to try and resolve misunderstandings between businesses and their clients. Finding the truth and helping people who have been cheated is a good cause.

This situation has already been dealt with and resolved with her credit card company. If there are specifics to the complaint, please put them in writing and address them to our office in Florida.

I already had put some specific questions in writing, and the response seemed dismissive.

But what about the credit card? I circled back with Millman. It turns out that she’d filed a credit card dispute to recover the remaining balance from her canceled trip. She insisted that Experience It! had canceled the tour, and she said although her dispute resolution department had agreed with her, it couldn’t get the money, and that the case was closed. (Hey Tia, time to get a new credit card.)

So that’s what the Experience It! executive meant by “This situation has already been dealt with.” Evidently, the credit card couldn’t retrieve any of Millman’s money and had allowed Experience It! to keep $8,471 without giving her the tour it promised. At least that’s how Millman sees it.

I see both sides of this argument. Organizing a private tour takes time and effort, and certainly, it seems fair for a tour operator to want to get compensated for its efforts. At the same time, were its efforts worth $8,471 on a tour that cost nearly $25,000? That seems a little rich to me.

Millman could take this to small claims court and she’d probably win. I could also get back to Experience It! with a few “specific” questions, which would probably ratchet up some pressure. But I’m not sure what to do.

Ideally, of course, Millman would have travel insurance that covers an event like this. But we don’t live in an ideal world. Experience It! and its suppliers should get paid, but do they deserve this much?

Should I mediate Tia Millman and John Madsen's case?

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65 thoughts on “Should my tour operator keep $8,471 to “cover” costs of a canceled tour?

  1. I didn’t vote because I don’t know what they are due. Did you ever find out who had cancelled the tour? The customers or the operator? It seems like they are due a refund minus any refundable deposit. What’s with the extra $3,000 being held hostage? Wasn’t the initial deposit enough to cover the costs?

    1. if canceled by the customer-

      “30 – 21 days before Tour: 50% of total Invoice is forfeit / (refund 50%)
      0 – 21 days before Tour: 100% of Invoice is forfeit / no refund”

      “Just three weeks before their departure, the State Department ….” so the tour was canceled at the 21 day mark (or 20 depending on how long it took to process.)

      so essentially the OP get nothing (they could hold the entire 25,000 if they wanted to,) BUT since it was public knowledge that Kenya and later Tunisia was on the “avoid” list so even if the OP was the one who canceled it would look very bad for the company to hold their entire 25,000.

      “Experience It! refunded $16,431″– i think that might have been a goodwill gesture.

      all it is keeping is —

      “We had given an initial deposit back in 2012 of $4,750, which we were fine with Experience it! Tours keeping for all their efforts.”

      “but they refused to return $3,721 they said was needed to cover their costs”

      the op is fighting for just 3,721. and unfortunatly.

      ” She insisted that Experience It! had canceled the tour, and she said although her dispute resolution department had agreed with her, it couldn’t get the money, and that the case was closed.”

      if the OP can PROVE that the company was the one who canceled then by all means Chris Elliott should help them…. (other wise they will just have to take the 3k as a loss)

      1. Right, but did the customer cancel or the operator? That’s still an open question. If the operator cancelled it, the terms say she gets ALL her money back (which presumably includes the deposit).

  2. The first thing I did is look this company up to see if it was registered with the Seller of Travel program to do business in the State of CA where I find a Tia Millman living. If she does live in CA, then this company is not registered and that should have sent up a red flag on booking with them from the start. If the credit card company isn’t getting them their full refund, that also says that the OP didn’t qualify for it. In reading the comment from the TO, I am not seeing that they canceled the tour, just the OP’s reservation. What does the OP have in writing from the TO that the tour was completely canceled and on what date? All tour companies have cancellation dates set in contracts with their vendors and if monies have been sent, then the TO could be on the hook for any cancellation costs. Tours don’t get canceled just because the US issues a travel advisory as many other of the travelers can be from other countries with no such advisory issued. Was this strictly filled with US travelers? BTW, travel advisories are not usually covered with many travel insurance policies. Same with terrorism in that you are only covered for the city of departure and city of arrival, not a blanket coverage for a whole country.

    1. Why should a FL company with no physical presence in CA, comply with a CA law? Its not a red flag. The sale takes place in FL. Its called interstate commerce and the Constitution puts that outside CA review.

      1. If the OP lived in CA and booked with a travel company that was registered, then the restitution fund would be there to pay her back any monies due (this has to be proved) that the tour company doesn’t pay. It is a consumer protection plan for residents and does nothing for the tour company. All tour companies are suppose to register with the State of CA and they know it. Other states have Seller of Travel laws and Florida is one. Is this company registered with Florida? I didn’t check that.

        Why should a FL tour company comply with a CA law? Because it is the law and they are required to follow all laws in the area where they sell to, as well as from. I did check the FL Seller of Travel law and they are breaking it, too.

      2. Lack of a physical presence does not mean that a business is outside of a State’s jurisdiction. That’s just one of a plethora of factors which cause many sleepless nights for 1st year law students.

        1. I read an article a while back about IL banning many on-line business from conducting business in IL, because they didn’t comply with IL laws. They welcomed them all to get in compliance, apply for a license to conduct business in IL, and they are then welcome to continue conducting business in IL.

        2. I agree. Even a foreign company registered here but based overseas has a losing stake. Their right to operate in the US revokable and domestic accounts seizable. So. Montetary sanctions are possible.

          Of course if levying criminal charges, you might face an uphill battle.

  3. I’d actually like to see you mediate with the credit card company, if Experience It did actually cancel the tour. That’s the part that’s not especially clear, and I hope it’s not obfuscated on purpose by the OP.

    The question is a very simple one: who initiated the cancellation?

    Yes, the article clearly states the OP’s belief that the tour operator cancelled. But in the second paragraph, “Millman made a frantic call to their tour operator” which leads one to believe that she initiated it.

    If the operator canceled, then I suggest you mediate between the OP and tour operator, and then out the credit card company that did not fulfill its obligation to the customer.

    If the OP actually initiated the cancellation and then tried to spin it to put the operator on the hook, I say drop this one. It’s a textbook case for travel insurance, which should be absolutely a no-brainer for a trip with this kind of outlay. The fact that there was a travel warning does not play into it. The people in Kenya live there and perform commerce every day and don’t adjust their lives based on what the U.S. Department of State says. In this latter case, the operator is entitled to what it kept.

    1. I agree; it’s odd that after all that back and forth, we STILL don’t know who kicked off the cancellation. Either side could have, and it made sense for either side to do so. (The customer could have canceled because of the State Dept. Warning, and the tour operator could have canceled because they expected too many cancellations and/or closure of some of the facilities they planned to use.)

  4. I think you need to be careful when you state insurance would have helped. I worked for a tour operator and after the Egyptian Revolution, our insurance stopped covering things political unrest. I thought most had.

    The real question is who initiated the cancelation. Once that’s figured out, the answer is fairly straight forward.

  5. Was this after the mall attack in Kenya? If so, then yes, most trip insurance would have paid out here under the terrorism coverage, assuming that Nairobi was one of the destinations. If not, then it would not have helped.

    As a side-note, I’m surprised that trip insurance companies don’t offer “State Dept. Travel Warning” coverage. Perhaps it’d be too difficult to underwrite, as the risk premium for each country would be different and constantly changing.

    1. I’ve always personally thought the state department is overly cautious, and often arbitrary in their warnings. They give widespread warnings, when there is a problem in a small area, and they give warnings when there is actually very little going on, and often when none of it is directed at tourists. If I were an underwriter, I wouldn’t want to underwrite a policy based on the state departments travel warnings.

      I went to Thailand during a state department warning, and lets just say the “rioting” that the state department warned of, consisted of about 10 people with water guns and paper signs. It made Occupy Wallstreet look like a full blown war zone by comparison.

  6. Methinks there’s more to the tale than just what is written above…

    I also think the OP needs a new credit card. Sheesh…can we get the brand at least?

    1. Credit card brand won’t help (unless it is American Express or Discover) since the individual issuing bank controls the dispute process for Visa and Mastercard. We would need to know the issuing bank.

    2. Sounds like the bank and credit card aren’t wanting to eat 8,500 bucks. Which begs the question of people using credit card to add a layer of protection.

      I agree there’s more to the story but gathering the facts, we have a few “truths”
      1) Travel IT has a security cancellation policy. – A State Department Warning isn’t taken lightly.

      2) Travel IT maximum refund is 50%. OP received 16,500 out of 25,000. Approximately 2/3rds, which again gives more credence to their argument.

      3) Travel IT’s lack of response to Chris is suspect and evasive.

      I might be wrong, but 2+2 is still four. Weighing the facts, the OP’s inexperience created avoidable situations (lack of travel insurance), but doesn’t negate Travel IT being the responsible party.

        1. Didn’t consider that option. Assuming the Credit Card is largely accept, then makes sense. Of course, if the company generates little business through them, ties are easily severed.

    3. But if she HAD cancelled within the penalty phase, and they had not actually done so as she stated, might be why her credit card did not back her up.

  7. For me, this is an easy case. It all comes down to who cancelled the tour. If its the TO, the OP deserves a 100% refund. If its the OP, 50% of the total cost should have been refunded (or lost).

    Having said that, I’m not sure its in Chris’s best interest to take on mediation. This seems to be a lost cause although I’m dying to find out how a CC company can say a claim is valid but not return any money….

    1. My guess is they disputed it after the 60 day window. From a regulatory standpoint, the issuin bank is not going to be able to recover the funds after this time, which is in all cardholder agreements.

      1. The window is 180 days when it comes to a failure to deliver. Even beyond this point the bank can do a “good faith” request and recover the funds. It just depends on how much effort the issuer wants to expend (ie how much they value the customer.)

  8. Keeping 1/3rd of 25,000 for “planning”? Pack up everyone, we’re becoming private tour operators!

    If there’s a State Department Warning, and Experience IT promotes safety, I surmise the operator cancelled the tour. Requesting a written confirmation was in short order, and I don’t understand why Tia Millman and John Madsen didn’t obtain proof. Now we’re left with a he said / she said battle.

    I think Chris is powerless to recoup the funds. He can “ratchet” pressure, but their lack of response implies Experience IT cares less.

    Why travel insurance wasn’t taken out on a 25,000 trip ASTOUNDS ME. However, what’s done is done. Seeing their credit card lacks a backbone, they’re only alternative is small claims.

    Good Luck.

    1. “Keeping 1/3rd of 25,000 for “planning”?”

      Less than 3 weeks out – don’t you think the operator of a $25k tour would have paid out some deposits by then, securing lodging, transportation, etc.?

  9. From reading the snips of the correspondence (especially the part about making the “frantic” call), it sounds like the OP initiated the cancellation. Why else would the company state they would recover as much as possible to refund and why else would the OP be OK with the company keeping the initial deposit? If the OP did initiate the cancellation, she should be happy with what she got.

    1. I read that part too, and I’m uneasy. However, putting the facts together still gives the OP most credibility. See what I wrote to Raven.

      I chalk up the OP’s actions to inexperience. 25,000 trip and NO travel insurance. Very idealistic couple! Wish I had 25,000 to “risk”.

      Frantic call to operator. Maybe after seeing the Travel Warning, OP wanting to inquire where the trip stood and was told “Cancelled”. I’d be quite frantic too if I had 25,000 on the line and found out I might not be getting what’s promised. However, I’d have travel insurance for 25K – Assuming I had 25K to blow on a trip.

      Travel IT gave Chris a very vague response. Suspect and evasive. Plus, they’ve initiated 2/3rds refund which contradicts their 50% policy.

      1. Vendors would have called THEM if they cancelled the trip, not them calling in to find out it had been cancelled. I think the onus of this was on the OP, and the vendor did all they could to get refunds on the components of the trip for them. But I’d love more info!

        1. Too much of the story missing. We’re all speculating. Also, being a private tour, was this only for OP and Companion or were other’s accompanying along?

        2. I guess it really does come down to the content of the “frantic call”. If the OP called the TO and said “this warning was just issued, so what do we do?”, then it’s still possible the TO initiated the cancellation even if they didn’t call.

    1. Nowhere does it state insurance was not purchased. Insurance may not have covered this situation depending on who actually initiated the cancellation and exactly what parts of the countries the tour was to visit.

      1. @MarkKelling:disqus

        If the existence of Travel Insurance, and subsequent claim denial were a factor, Chris’s journalistic prowess would include mention in the article.

      2. Actually, at the very end of the article, Chris implied it:

        “Ideally, of course, Millman would have travel insurance that covers an event like this. But we don’t live in an ideal world.”

        1. Many policies do not cover this type of cancellation. They would have needed a Cancel for Any Reason policy that doesn’t have exclusions for government travel warnings.

          1. We can guess a trip to Kenya will start in Nairobi, it being the only major international airport. And we can also guess that the cancellation was made as a result of the massacre in a Nairobi mall, then it would have been considered as due to a terrorist event and covered under the polices that have such a rider. (many do)

      3. But fair point that it doesn’t mean that travel insurance would have necessarily covered this. I just would have tried my best to protect a $25,000 investment.

  10. We have been in this office for 57 years, serving the travel community. Never in all those years have I seen a cancelled tour not refunded in full, less possible visas and tourist cards. AIr, hotel, tour, commission, etc is always returned in full. Once a government “warning” is issued, all refunds are to be made in full within “x” number of days depending upon the countries involved.
    If they booked with a USTOA or ASTA travel agency, a simple letter should do the trick. You are entitled to every single penny in refund! It’s tough for an agent to lose that kind of commission, but it happens every day. Insurance would have done the trick easier, but people do not check into that enough. Our insurance even protects my commission, so I would have been pleased to help Tia. Attack them in small claims court or through the state Attoney General’s Office.

  11. “Organizing a private tour takes time and effort, and certainly, it
    seems fair for a tour operator to want to get compensated for its

    Any company operating tours in an area of the world where security is unstable has the responsibility to make it clear to their customers who is shouldering the risk of a security-related cancellation. If it is the customer, then the customer must accept the operator’s terms and purchase appropriate insurance if desired. If the operator, then they ought to be charging a premium to cover the risk of cancellation (either by buying appropriate insurance or self-insuring for that risk).

    For the future, Experience It! should update their terms and marketing material to reflect this. In this case, it looks like Experience It! made the decision to cancel the tour and therefore should have refunded the money; at the very least they should give their customers credit in that amount towards a future tour.

    The credit card dispute complicates things a little bit, but you should still work with the customer and operator to help sort things out amicably.

  12. I voted yes. If in fact EIT initiated the cancellation, then per their policy, the OP is due a full refund. If the OP canceled, then its whatever the policy states based on the time she canceled. If it was 50% she was due back, and the company gave her more, then they are clearly a good company. It all comes down to who canceled it. The fact that the OP called when an alert was issues, makes me inclined to believe the OP canceled, but I am giving her the benefit of the doubt.

    I agree, she needs a new credit card. Her story sounds like what happened to me when I issued a dispute through Pay Pal. I won, but the other party has withdrawn their funds, so PayPal couldn’t refund my money.

  13. Hello Chris, could you please share the credit card name in this case? I believe they deserve the honors for the disservice they have done to the OP, and could save others from having to deal with unnecessary denials in the future.

  14. Assuming that a timely request with a billing dispute was made – there is no requirement in the law that the bank get their money back from the seller before the buyer receives a credit.

    Thus – the bank failing to preserve and make permanent a credit is a violation of the law. Such would render the bank liable for the statutory penalty together with attorneys fees.

    You might want to check your state’s laws for small claims – if the amount has been amended to $10k, the OP should immediately sue their bank for their money back. Plus the statutory penalty.

    If the tour happened but they canceled it for Americans – ok – that happens. We are a prissy and fearful little bunch.

    As others have said – who terminated the tour for the OP. Once that is answered – the solution becomes simple.

    I really don’t care what ‘expenses’ the travel company has – its their business and businesses sometimes lose money. Often they make money- but their ‘expenses’ are easily credited to future activity because there is heavy competition for whatever ‘expenses’ they are paying – and if their provider does not give them a credit, then they don’t get future business. It called the cost of doing business. Its not my job to ‘guarantee your losses’ if you cancel the tour and your document provides me a full refund. I’m not seeing language that my refund is dependent upon whether the company gets it money back or not . . .

  15. This is confusing:

    Millman made a frantic call to their tour operator.

    Now, Millman and Experience It! are bickering over a refund — a sizeable refund — and she wants me to get involved. I’m not sure if I should.

    Millman says Experience It! canceled the tour, a decision with which she agreed.
    It appears that she called and they canceled the OP’s part of the tour, not the whole tour. This needs clarification Chris. Did the tour, as scheduled, take place? I am guessing it did and that is why the credit card company didn’t get the funds for the OP. If that is the case, then the OP had costs that the tour company has to cover for the cancellation.

  16. Red flag – no association with the USTOA or any type of group that could assist in refunds if there are any issues with the tour.
    However, the terms state in two different places that the client should receive a full refund.

    Since the company is headquartered in the U.S., I vote for Chris to do whatever they can. Shame on the credit card company for not providing a full refund for services not received. But without a reliable tour operator backing this company, they may be plumb out of luck if Chris can’t help.

    Security Cancellations: Experience It! Tours, LLC
    reserves the right to cancel any tour at any time if we feel that the
    safety of the travelers may be compromised. The refund of all payments
    received constitutes a full settlement.

    Emergency Cancellations: Foreign governmental
    decisions resulting in our inability to provide the tour as anticipated
    may have to result in tour cancellations. We reserve the right to
    cancel a tour if the currency exchange has more than a 25% impact on the
    price; in which case we may cancel and refund all payments received to
    date or offer to provide the tour at the new exchange rate. If we are
    unable to provide the tour for other unforeseeable reasons or
    emergencies we will refund all payments received to date as a full

    1. But if the OP cancelled, and it really does sound more plausible here, then no full refund IS due – would really like more information, but doubtful we’ll see it.

  17. Oh, wow, whenever someone has a problem with travel, everyone yells “shoulda gotten travel insurance” but then some of us remember all of the complaints about that squirrelly industry, and we still keep hearing about everything that’s excluded from a travel insurance policy. So, buying travel insurance isn’t a universal remedy. Generally, I personally figure that if I’m still breathing I’ll take the trip I paid for and if I’m not, well, I guess my sweetie will try to get her bf accepted on the trip.

    Bottom line: just like extended warranties, which I also don’t buy, travel insurance sort of sounds to me like building a house with a back door, like you’re paying for something that you intend to use.

  18. I voted no. Not because of any of the arguments in this case, but solely because the OP went behind Chris’s back and filed a claim with the cc company. That blindsided him. Let her follow up herself.

  19. A little OT – but what travel insurance companies do you experienced travelers recommend? I’m looking for something not affiliated with the airline or resort (planning a trip to an all-inclusive in Riviera Maya).

    1. Two companies I prefer are TravelGuard and TravelEx. You can also speak with an agent and ask specific questions, and compare policy coverage (they each offer different plans of coverage) – always a far better choice, as they are more comprehensive.

  20. Why wouldn’t a company that organizes tours, especially in that part of
    the world have its own insurance for “safety issue” cancellations? or at
    least build the possibility into their business model (they probably
    do, is my guess). And since when does “refund” not mean “refund?” Since
    they’re not arguing that the client cancelled the tour, it’s likely that
    she’s right and they just intend to avoid the issue.

    1. But if the CLIENT initiated a cancellation within a cancellation penalty time frame, then they are not responsible – that is the crux of the matter here.

  21. Not enough information to really make an informed decision. The question not answered is who made the cancellation–the OP or the tour company. If there is no answer to this question then mediating is a waste of time.

  22. If Tia should have insurance to cover the cancelled tour, should Experience It! have insurance as well? If they have it in their contract of carriage shouldn’t they know its a possibility and should cover itself with insurance just like a customer is always to,d to do? Tia and John did not get a tour, private or otherwise. They deserve all of their money back for reasons stated.

  23. funds are probably in Kenya or Tunisia. Good luck getting it back from there. Any US consumer rules don’t apply outside US borders.

    Point is moot about jurisdiction, if the money is gone. “You can’t get blood from a stone.”

    Sounds like Millman cancelled, based on State Dept comments (who on earth listens to what dodgy U.S. state dept has to say ? – they are only covering their butt in case something happens there)

    1. Surprising not true. The US has exercised jurisdiction over companies which do business in the US or advertise in the US. If the OP were to prevail in court, she could levy any US accounts, including merchant accounts.

      1. here we go again !!!

        The U.S. is not the World Police !!! (many Americans seem to think so though)

        “You can’t get blood from a stone.”

        You don’t go to court or sue in USA, if there’s no money at the other end. You may succeed in closing down the company in USA, but that doesn’t get funds back, if they’ve left the country.

        No jurisdiction on foreign banks accounts !!!

        1. Whether the US is or is not the World Police is meaningless to the discussion as it has no bearing on the state of the law and is merely a distraction. It remains that there are numerous circumstances when a US court will exercise jurisdiction over a foreign company.

          The most common one is whether the business avails itself of the US market. Alternatively, there may be treaties which come into play depending on the specifics.

          If the plaintiff prevails on a judgment that it can begin seizing any assets which it can find within the US borders. Internationally it’s harder, but not impossible . For example, if the business takes credit cards, you would have to determine whether at any point, does the transaction hit a US account. Levy that and you’re golden.

          Additionally, if the business requires a license to operate in the US, that license may be suspended (depending on the business) until the judgment is paid off.

          This are of course, the credit card option is too high value for the OPs cause, but it all depends on the specifics

  24. Quick question about the credit card: How long does one normally have to file a dispute? The OP paid a deposit far in advance, would the length of time passing be the reason for the rejection? Or would non-delivery of the product start the clock?

  25. I cannot help but think that since the OP initiated the “panicked” phone call to the tour company that SHE is the one who initiated the cancellation, as well. “The state dept says it isn’t safe and we shouldn’t go!” “Ok, ma’am, we’ll cancel that for you. Anything else we can help you with today?” Did Chris ever get a satisfactory ruling on who made the decision to cancel? Ift the entire thing was canceled or just this couple’s trip? I gotta say, must be nice to have 25K to plunk down on a vacation!

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