Holiday refunds: why some airlines and travel firms aren't giving cash back for cancellations - and if it’s legal
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Customers whose travel plans have been affected by the outbreak have been faced with refusals when asked for their money back, or issued with an automatic credit note for cancelled flights and package holiday, according to consumer watchdog Which?.
Here’s what you should know.
Is refusing a refund legal?
Which? revealed that 20 of the UK’s largest airlines and travel firms are illegally withholding refunds that should be paid to customers within 14 days.
Instead most customers have been offered vouchers or credit notes, with many complaining they have been unable to claim a refund online, or get through to customers services on the phone to arrange for a refund.
While travel companies are entitled to offer alternatives to a refund, such as a credit note, in the event of cancelled bookings, they must also offer the option of a cash refund within 14 days.
However, cash refunds are increasingly being refused, with many of the UK’s largest package holiday providers now automatically issuing vouchers instead.
Which travel companies have refused refunds?
TUI, Virgin Holidays and Love Holidays are among those issuing credit notes in the first instance for cancelled bookings, with these being given whether customers want them or not - even when a cash refund had been specifically requested.
This is despite Which? finding that these vouchers may not be financially protected.
TUI said that customers can still get a refund, but this can only be done after a credit note has been accepted. However, these are not being issued until up to four weeks after the departure date.
The company also said that the refund process is taking considerably longer than normal, meaning customers could be forced to wait months before getting their money back.
Virgin is automatically issuing vouchers to customers, redeemable up to 31 July 2020, but insists cash refunds are still available, although requests are taking longer than usual to process. The vouchers can be used to rebook a holiday which departs any time before 31 December 2021.
Love Holiday customers cannot request a refund, although credit notes that are unused can be exchanged for cash once they have expired, with the current expiry date being 31 July.
Expedia and Lastminute.com both still claim to allow cash refunds, although customers have reported they haven’t received their money back weeks after making a claim.
Lastminute.com has not confirmed whether refunds are being processed within the specified 14 days, but said it is prioritising the most imminent departures first. However, it is charged a £25 handling fee to process these claims, according to Which?.
Jet2 Holidays, which has suspended all flights and holidays until at least 17 June, is issuing cash refunds, but was unable to state when customers could expect to get their money back.
British Airways Holidays is offering customers the option to rebook, refund, or accept a voucher to travel at a later date, and said a full refund can be requested at any point up to 12 months after the start date of the journey.
Travel Republic is still finalising its refund process, but customers currently have the choice between a refund and a credit note. If the credit note is not redeemed before its expiry date on 31 December 2020, customers will automatically be given a cash refund.
Meanwhile, easyJet Holidays said that, on average, it is processing refunds for cancellations in under 14 days, while many other smaller operators are still issuing money back on time.
Which airlines are not giving refunds?
Ryanair has been branded as the worst major airline in the UK for refunding British customers whose flights have been cancelled as a result of coronavirus.
More than eight out of 10 customers (84 per cent) are still waiting to get their money back for cancellations, according to Which?
The airline was instead found to be offering customers vouchers for cancellations, telling them that any request for a refund will be “placed in the cash refund queue until the Covid-19 emergency has passed”.
This is despite previously saying it would process refunds within 20 working days.
Virgin Atlantic and Qantas have also been issuing credit notes automatically, with Virgin Atlantic stating these can be rejected in favour of a cash refund, but that its current timeframe is 90 days.
Jet2 said it is issuing cash refunds for cancelled flights, but didn’t confirm whether it was doing so within the stipulated seven days. Customers are being contacted by the airline in order of their departure date to discuss their options.
British Airways has refused to allow customers to claim a refund online, advising that this should be done over the phone. However, customers have reported to Which? that the number they were given to call automatically hangs up when the refund option is selected.
Etihad is offering refunds to customers who request it, but has not confirmed whether this was being done within the seven day period, while Emirates is automatically extending validity on cancelled flights for two years, or offering travel vouchers.
Those who want their money back will be granted a full refund, but outside the seven-day timeframe.
Customers who booked flights with KLM and Air France that are scheduled to depart before 31 May 2020 are being given three options.
These include changing their travel date free of charge, changing the destination of their journey, or obtaining a voucher for non-refundable tickets of the same value as their current booking. Vouchers that have not been used after 12 months will be fully refunded.
What are my rights?
Customers who booked their flights with a UK or EU airline, or were due to depart from a UK or EU airport, are entitled to a refund for a cancellation within seven working days.
However, none of the 10 major airlines contacted by Which? were meeting this legal requirement.
When booking a package holiday you are protected by law, meaning if your trip is cancelled, package travel regulations entitle you to a refund.
If you would prefer a full refund over a voucher or credit note, this must be processed by the company within 14 days and your money remains backed by the government’s Atol scheme while you hold your booking, even if the departure date has passed.
This means you will still get your money back even if the company goes bust, which is not necessarily the case if you accept a voucher.
In the case of flights, if the airline is based in the UK or EU, or you are flying from a UK or EU airport, you must be offered the choice between being rerouted or refunded if your flights are cancelled.
This rule applies no matter what the reason for the cancellation, or how far in advance it occurs, and any refund must be processed by the airline within seven days.
Which? is supporting customers’ legal right to a cash refund, but recommended the deadline for processing refunds be extended to 28 days, and for any vouchers to be guaranteed against insolvency, and eventually made redeemable for cash.
The watchdog also called for the Foreign and Commonwealth Office to extend its travel advice to a specific date, rather than leaving it open-ended, and for travel insurance terms and conditions to be made more transparent.