After the storm, who has your refund?

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By Christopher Elliott

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, a trade magazine editor from Cherry Hill, N.J., faced an unexpected obstacle for 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.

But when Weiss contacted Treasure Island directly, he heard a different story. The hotel offered to cancel his reservation, but since he booked through Expedia, any refund would depend on the agency. And Expedia wouldn’t give him his money, citing its published refund policy, he says.

Clearing up cancellation confusion

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.”

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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.

Unusual refund requests

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.”

My advocacy team and 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? The Hertz location was closed due to storm damage, so he couldn’t have picked up the car. Hotwire was the merchant of record in the transaction.

Who takes your money?

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.

Credit card refunds go directly to the consumer, preventing agencies from withholding funds due to refund policies. (Here’s our guide to winning a credit card dispute.)

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. About 5% of travel buyers, those using non-credit-card methods like cash or checks, can be aware of this,” says 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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Christopher Elliott

Christopher Elliott is the founder of Elliott Advocacy, a 501(c)(3) nonprofit organization that empowers consumers to solve their problems and helps those who can't. He's the author of numerous books on consumer advocacy and writes three nationally syndicated columns. He also publishes the Elliott Report, a news site for consumers, and Elliott Confidential, a critically acclaimed newsletter about customer service. If you have a consumer problem you can't solve, contact him directly through his advocacy website. You can also follow him on X, Facebook, and LinkedIn, or sign up for his daily newsletter. He is based in Panamá City.

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