When it comes to financial security, it’s important to know all your options and the ways you can be protected from losing your money. Especially in travel, where you are paying in advance of the product you are buying, there are slightly more risks. Being aware of how you are protected, how you can protect yourself, and how financial proceedings work is crucial.
Most of the time, if you book with a PTS member and something goes wrong, you can sort it out with them directly and everything will be resolved. On some occasions, however, what are referred to as chargebacks may be processed by a consumer when they don’t need to be, and this can cause complications for the travel company and the merchant service provider. There are times when requesting a chargeback is simple and the right solution, but with a lot of confusion surrounding when they are the best solution, it’s important to understand what chargebacks are.
Put simply, a chargeback happens when someone pays for a product with a credit card transaction, and that process is then reversed in order to return the money to the payer. This usually happens when the company being paid does not perform the service as they promised or produce the product paid for, therefore the money will be returned to the payer. This could be things such as:
- The product never arriving, or the service never being provided
- The product or service being different than described
- The service being provided but to a lower quality than agreed
- The product arriving damaged
- The company going out of business or stopping trading
It is considered riskier for the credit card provider in travel because of the delay between payment and performance. But processing a chargeback when you pay for travel works the same as long as you are paying with a credit or debit card, though credit will be prioritised. It’s important to remember that a chargeback is not the same as a refund. If you can get a refund instead, that is what you should do. We recommend that a chargeback is a last resort option, especially in travel, and we’ll discuss why shortly.
- You are the consumer, and you use your credit card to purchase a cushion online. Your cushion arrives and it is damaged. You contact the credit card provider to process a chargeback and they reverse the transaction to return the monies.
- You are the consumer, and you use your credit card to book a flight on its own. However, the flight company stops trading before your flight is due to go ahead and you can no longer take the flight. You contact the credit card provider to process a chargeback and they return the money to you.
Chargebacks can take a long time to process, which is something else to keep in mind before you do so. Is there another, faster way that you can get your money back if you think you are entitled to it?
Ideally? Never. If you’re booking in a way that protects you best, no issue should ever get as far as needing to process a chargeback. However, if you do have to, we recommend leaving it as a last resort resolution since other ways are more efficient and more beneficial for all involved. There are many ways that you are already financially protected in travel because the industry understands how financially risky it could be. Booking by credit or debit card is highly recommended for this extra layer of protection, it is usually just a precaution if you’re booking in the best way possible. The ways you’re already protected are as follows:
- If you book a package holiday or linked travel arrangement
- If you book a flight as part of a package
- When you book with a Protected Trust Services (PTS) member
- When you have good travel insurance
All these things will provide you with solid financial protection, whether it’s the Package Travel Regulations, ATOL, a trust account, or travel insurance itself. All these methods also mean that processing refunds is efficient, simple, and just a matter of getting in contact with your travel business. Even if your travel business should go out of business before your holiday, that will be financially covered, and if you book with a PTS member, you may not even realise anything has changed. In saying that, we have yet for any of our members to go out of business.
It’s important if anything goes wrong, that you keep in contact with your PTS member. Most likely, they will be able to resolve the issue or provide a refund for you, and everything will be dealt with swiftly. Immediately trying to process a chargeback can cause difficulties for the travel company and the credit card provider, as well as yourself which will make the process much slower.
We don’t recommend doing this generally, because you are going to be very weakly protected in comparison to booking a package holiday. You can find out more about the benefits of booking a package holiday on our blog. However, if you do book individual elements, say you book a one-way flight to go visit family, so you don’t need accommodation or any tourism elements, this is where the protection of using a credit card might be handier. Because you won’t be protected by the Package Travel Regulations or ATOL, a lot of this protection will fall on travel insurance. However, this will only protect you against medical issues, lost or stolen items, or cancellations.
If you book a flight on its own and the company then goes out of business, this may be where you look into chargebacks, but it’s important to do your research to ensure you understand what this entails.
If you book a flight on its own and the company provides a lesser quality flight than you booked, then this is something you can discuss with the flight provider first and foremost.
Generally, we recommend that you book in a way that is as thoroughly protected as possible with a PTS member so that you do not have to resort to solutions such as chargebacks.
So, make sure that if you have any issue with a holiday, the first thing you do is get in contact with your PTS member who will be able to resolve it for you or give you some answers.
And if you want to learn more about how you are protected on holiday, you can visit our package travel regulations, travel insurance, and resolution process pages.