Making sure you are paid for your services – one way or the other
Consumer protection legislation across the country, including the travel laws in BC, Ontario and Quebec, are all designed to protect the financial interests of consumers in the context of purchasing travel services.
Whether your agency is subject to one of these laws or not, it should follow the basic principles outlined in these laws to have the best chance of keeping any customer money that was always intended to remain with the agency in the case of a cancellation of the travel services.
The best way to make sure that the agency is entitled to keep some of the money from a customer when the travel services are not provided by the supplier or used by the customer is to make sure that the service the agency is providing is paid for separately.This can be cumbersome, because the customer has to be charged twice or provide two payments, however in that way the fee for the agency’s service is kept separate from the payment for the travel services.
There can be little confusion then in the case where the travel services are cancelled by the customer or the supplier of the travel services, that the agency is entitled to keep the fee it received for the service.
Even if the travel services are not provided or used, the agency did the work required to earn the service fee, in conducting research and making the booking, such that there is a justification for retaining the service fee.
A little more difficult
The claim by the agency that it may retain any of the funds that are paid by a customer for the travel services is more difficult to make out, especially if the terms under which the money is paid by the customer are not clear and provided to the customer before payment is received.
It is for that reason that an agency should make clear in its dealings with the customer what amount of the money paid to it by the customer will be retained by the agency, regardless of what happens with the travel services, as a non-refundable amount or a penalty.
The amounts and the circumstances in which an amount will be retained by the agency must be set out clearly and drawn to the attention of the customer before taking any money.
For example, an initial deposit of $100 will not be returned/refunded regardless of the circumstances.
If these terms are clear and combined with advice to the customer that trip cancellation insurance should be purchased, then the agency will have served its customers well and at the same time complied with all obligations under the travel laws.
Easier to prove
Proving that the cancelation and/or non-refundable amounts were in fact brought to the customer’s attention will be far easier if the agency uses some form of written “booking terms” that set out the amounts and the circumstances.
For example: “A significant amount of work goes into preparing a tour of this nature. Each participant is therefore required to provide a non-refundable deposit of $100, which will not be returned to the participant regardless of whether s/he cancels participation in the tour or the tour does not go ahead for any
It would be easier to classify that $100 as a service fee, however, many in the leisure travel market have difficulty in identifying the fact that a fee for service is being charged to customers.