The Department of Transportation (DOT) recently finalized a proposed rule that places responsibility for refunds on travel agencies in certain cases. This rule comes after initial concerns that it would be the most anti-travel agent regulation in the DOT’s history. However, upon closer inspection, it is clear that the DOT has taken into account feedback from industry stakeholders like ASTA and has made some adjustments to the final rule.
Under the new rule, agencies are only responsible for refunds in cases where they were the credit or debit card merchant after selling directly to consumers. Additionally, they may also be held accountable when accepting payment by cash or check. This means that agencies will need to refund customers using their own funds within specific deadlines outlined in the rule, regardless of whether they still hold the client’s money at the time of the flight cancellation or delay.
The rule specifies the minimum number of hours that must elapse before a delay triggers the refund requirement, which is three hours for domestic flights and six hours for international flights. Refunds for credit card purchases must be made within seven business days, while refunds for cash, check, or debit card purchases must be issued within 20 calendar days. The DOT has also implemented a six-month delay in the effectiveness of the refund requirements to allow time for coordination and communication between airlines and agencies.
While the final rule may not be as harsh as initially anticipated, it still presents significant challenges for many agencies. By putting them in a potential loss position, the rule could lead to a decrease in the number of agencies selling airline tickets. The broad definition of “ticket agent” in the law also means that non-ARC-appointed agencies and independent contractors could be affected, further complicating the landscape for travel professionals.
As agencies navigate the implications of the DOT’s new regulations, there will likely be a shift in how they conduct business and interact with airlines. The need for increased cooperation and communication between all parties involved will become crucial to ensure that refunds are processed efficiently and in compliance with the rule. Ultimately, the travel agency industry may see a significant transformation as a result of these changes, potentially leading to a more streamlined and consumer-focused approach in the future.