Published on Thursday, June 25, 2020

Agents losing hundreds of pounds a month on refunding card payments

Pressure is mounting on credit card companies to change their transaction-fee practices after research showed a third of travel agents are losing up to £500 a month on transaction fees when they refund clients.

The Scottish Passenger Agents Association (SPAA) says three-quarters (73%) of members have lost money by refunding their clients on credit and debit cards.

Card companies will not refund the charge to the agents for using credit cards for the booking, while also applying a charge to make a refund.

The SPAA found 31% of agents who had suffered credit card loses who took part in the survey had lost around £500 in a single month, while 35% had lost in the region of £200.

It found 93% of those agents, who had experienced losses had lost money with a Visa transaction, 90% had suffered a loss with Mastercard transactions and 69% of agents who responded had lost out on debit card transactions.

Credit card commissions range from 1% (mostly debit cards) up to 5% - and this applies to both payments and refunds.

Agents can't avoid the refund charges with bank charges as they have to refund via the same method as the payment was originally used unfortunately.

SPAA president Joanne Dooey said: "It's a perfect storm for agents."

She added: "Unlike almost all other sectors, travel agents don't receive fees for their work - which can be on behalf of several travel partners per booking - until just weeks before a client's departure.

"The tsunami of cancellations and refunds means that the travel agent will never receive any fees for the work they did many months ago as they face refunding clients in full.

"Losing money over and above the full cost of a client's travel through credit card charges is the straw which breaks the camel's back. This money is coming directly from the pockets of our members. The credit card companies should be refunding the charges back to the agents or introducing a handling fee charge to customers."

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  • refund fee

    I have just been offered by Travelup a voucher or cash refund from which they deduct £50 handling charge. That doesn't seem right.

    By morris richards, Thursday, June 25, 2020

  • agents should only refund

    the amount they receive nett !!!

    By Michael Anderson, Thursday, June 25, 2020

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