Agents find ways to offset burden of credit card fees
The travel industry was ‘confused and let down’ by the ban on passing credit card fees onto customers, according to The Travel Network Group CEO Gary Lewis, but agents are finding numerous ways to lessen the impact.
Speaking to TravelMole at the TTNG conference in Budapest this week, some agents who offer dynamic packages said they had put up their prices by ‘one or two percent’ to offset some of the credit card fees they have been forced to absorb.
"We don’t know how much business we might have lost as a result of the increase but when you are working on a margin of 5% and the credit card fee is 2% to 3%, it’s impossible to absorb it all," said one travel agent.
Other said they were trying to discourage customers from paying by credit cards by offering discounts only for holidays paid for by debit card, cheque, cash or bank transfer, while some now flatly refuse to accept American Express, which typically charges a higher rate than MasterCard or Visa.
Charles Diakou, MD of Crown Travel in Liverpool, said it wasn’t possible for his agency to refuse Amex because customers often wanted to use it to pay for a ‘big ticket’ booking costing tens of thousands of pounds. Instead, he said he asks them how they intend to pay for their holiday and adjusts the discount accordingly.
Some customers are prepared to forgo a discount and pay by Amex for perks such as cashback or points, he said.
Others insist on paying by credit card for the additional financial protection, although he said his agency tries to encourage customers to pay only the deposit by credit card, which then gives them protection for the entire booking, and use another method to pay the balance.
Overall, Diakou estimates the ban on passing credit card fees onto the customer is costing his agency £15,000 a year based on a £3 million turnover.
"It is a massive chunk. We were charging 3% and now we’ve had to absorb it," he said. "We have managed to get some of the fees lowered, but Amex is the big problem."
Linsey McNeill
Editor Linsey McNeill has been writing about travel for more than three decades. Bylines include The Times, Telegraph, Observer, Guardian and Which? plus the South China Morning Post. She also shares insider tips on thetraveljournalist.co.uk
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