After the storm, who has your refund?

The recent superstorm and series of nor’easters that slammed into the East Coast grounded tens of thousands of travelers, including Neil Weiss.

Fortunately, most travel companies waived their usual rules, offering those delayed by the storms a refund or a credit. But not all travel companies. Weiss, an editor for a trade magazine based in Cherry Hill, N.J., found an unlikely roadblock to his refund: his online travel agency.

After superstorm Sandy, Weiss had to cancel a business trip to Las Vegas that he’d booked through Expedia. US Airways agreed to waive its change fee and allowed him to reschedule his flight. His hotel, Treasure Island Hotel & Casino, did not. It wanted to charge him $200 for being a “no show,” according to Expedia.

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But when Weiss contacted Treasure Island directly, he heard a different story. The hotel would be happy to cancel his reservation, he was told, but because he’d made the booking through Expedia, a refund would be up to the agency. And Expedia wouldn’t give him his money, citing its published refund policy, he says.

Weiss’s cancellation isn’t the only refund case I tried to mediate after the storms. These problems highlight one of the often unmentioned risks of booking through a travel agent: Even when an airline or hotel is willing to refund a purchase, you may still have to get past an agency’s own refund rules.

The Weiss case is interesting because after he canceled his trip, he received conflicting information from Expedia and Treasure Island. Expedia says that it advocated with the hotel on his behalf, trying to secure a refund of his first night’s stay. But it claimed that the hotel wouldn’t allow it.

In an unusual e-mail, a vice president at Treasure Island disputed Expedia’s account. “If Expedia suggested that they’d already paid us for your room and kept a cut, you either spoke to someone who does not have the correct information, or deliberately told you something that is not true,” he wrote. “Without getting into too many details, that is not — nor ever has been — the way our Expedia billing accounts are set up.

“In addition, if Expedia advised you that they will not refund your payment due to policies in place by our hotel, that is also untrue.”

Either way, Treasure Island promised to return Weiss’s money. After I contacted Expedia on Weiss’s behalf, the agency agreed to refund his hotel charges. A company spokeswoman said that Expedia was the merchant of record on his hotel booking, meaning that it had charged him, not Treasure Island.

A similar problem befell Jason Singer, who had booked a car rental through Hertz for his 30th high school reunion in Manhasset, N.Y. When Sandy struck, both American Airlines and La Quinta offered him immediate refunds. But Hotwire said that its refund policy meant that his car rental fee couldn’t be returned. Singer was on the verge of starting a “boycott Hotwire” campaign when he contacted me.

“A Hertz representative apologized profusely for Hotwire’s policies and for the fact that they could do nothing about it,” says Singer. “She added that not only would they have refunded me without question if I had made a prepaid reservation through them directly, but that they were receiving multiple calls with the same Hotwire issue.”

I asked Hotwire to review Singer’s case, and the company said that his request had been handled correctly on one level and incorrectly on another.

For one thing, Singer’s travel dates fell outside the window for which refunds were being offered. And he’d paid a special deep-discount rate that was subject to strict non-refundability rules. “You can see how standard practice would recommend against a refund in this case,” spokesman Garrett Whittemore told me. “It’s nearly impossible to reliably prove that any customer’s travel was meaningfully changed by this natural disaster.”

But Hotwire refunded Singer’s purchase anyway. Why? It turns out that the Hertz location was closed because of storm damage, so he wouldn’t have been able to pick up the car if he’d traveled. Hotwire was the merchant of record in the transaction.

These cases raise two key questions: Who takes your money when you’re buying a travel product? And how do you know where to go for a refund?

When you buy through a bricks-and-mortar travel agency and pay by credit card, charges are passed through to the airline, hotel or car rental agency and are governed by its merchant agreement, which is the contract between the company and the credit card.

“That means that when our clients see their credit card statements, they’ll see a charge for the specific supplier they’re using, rather than for the agency,” says Steve Loucks, a spokesman for Travel Leaders, a travel agency consortium in Plymouth, Minn.

Refunds on credit card purchases pass directly back to the consumer, so an agency wouldn’t be able to hold back the money because of its refund policy.

In other words, if you want to know who has your money, check your credit card statement. Unfortunately, you can’t always know who will charge you until you’ve been billed. But roughly 5 percent of travel purchasers can know, because they pay by cash, check or other non-credit-card method, according to Loucks. For them, the company taking the money is the company that will give them the refund.

Singer and Weiss probably would have gotten their refunds eventually without my involvement. Even if they hadn’t asked me to intervene, they could have filed a dispute with their credit card company. With right on their side, they would have won.

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