When a Holiday is Cancelled is it Better to Apply for a Refund or Accept a Voucher?

By Valery Collins | May 28, 2020

Enjoying the Slopes of the Dolomites in Italy Credit: Valery Collins

When BA cancelled my trip to Italy in March, I had the option of a refund or a free transfer to another flight.  I took the money.  I had thought of changing to a flight in July 2020.  However, even though this was months away, it was not guaranteed flights would be operating then.  I also had to consider whether the Italian border would be open.  A refund seemed the best option.  I would then have the freedom to book with another airline should they start operation before BA.  It did take several weeks for the money to be refunded, but I had expected it would.

When a trip is cancelled it is important to check your options as soon as possible with your agent or carrier.

When Do I Have the Right to a Refund?

Lake Garda in Italy Credit: Valery Collins

If a travel company cancels a holiday, there is the right for a full refund.  In the UK companies rely on the advice given by the Foreign and Commonwealth Office (FCO) before deciding to cancel a holiday.   If the FCO advises against travel to a particular destination, holidays to that destination will be refundable/covered by insurance.  If a situation is developing, be patient and wait for the FCO (or similar body in other countries) to issue advice before taking any action.  Customers who cancel before the travel company decides to cancel will lose the right to a full refund.

The best they can hope for from the company would be a refund of any money retrieved from the suppliers of the holiday – hotels, airlines etc.  However, travel insurance may cover this, but it depends on the terms of the policy.  It is worth a phone call to discuss the matter before cancelling a holiday.

If a company will not agree to a full refund or only offers a credit, there are two options.  The first, to discuss the matter with them, insisting on your right to a full refund and making it clear you will not accept their decision.  If there is no resolution, contact the issuer of the bank card or credit card you used to pay for the holiday as they may be able to negotiate a refund.

If I Accept a Voucher Will There be Terms and Conditions Relating to its Use?

Boulogne sur Mer, France Credit: Valery Collins

Before you accept a voucher or refund credit note instead of reimbursement, check any terms and conditions.  Any form of credit is a good option for tour operators, airlines and other suppliers as it keeps the money in the company and customers on their database.  For some companies, it may make the difference between surviving the pandemic or closing down.  They are also easy to issue whereas a refund takes time – as illustrated by the way Ryanair has been responding to requests for refunds.

Ryanair has been emailing a voucher to customers requesting a refund.  This voucher includes information on how to request a refund.  There are reports that people asking for a return of their money have encountered many difficulties most relating to communications with the company.  Michael O’Leary, the boss, has warned refunds will take two to three months to process.  These vouchers also have a time limit of twelve months.  If unused by then, customers may apply for a refund.

Customers receiving an email of this nature may assume a voucher is their only option but this is not the case.

What Happens if my Travel Company Goes Bankrupt Before a Refund is Processed?

Some travel companies will not survive the current crisis.  Provided you booked your cancelled package holiday with a company that offers ATOL or ABTA protection you are protected and will get the refund.

What is the Situation if a Travel Company Goes Bankrupt Before a Voucher or Refund Credit Note is Redeemed?

Umag on the Istrian coast of Croatia Credit: Valery Collins

It is not clear regarding vouchers or ‘refund credit notes’.  This new term is an attempt to ensure protection.  ATOL (government protection scheme for holidays in the UK) may not protect the holders.  But this has yet to be confirmed.  Holiday companies continue to issue refund credit notes.  Some are even claiming that the customer must accept them as the law will be changing to ensure they are protected.  But this is not the case.  As yet it has not been confirmed that they are or will be protected.  Anyone accepting a voucher or refund credit note runs the risk of losing their money if the company that issued it goes bankrupt.

So, in conclusion, my advice would be to take a full refund where you have a right to one.  But, changes are happening all the time.  Everyone should be aware of this.  Talk to the company concerned (chat lines may be the easiest way) before making a decision and read the small print.

This content was provided to MentourPilot by provider, Travel Radar Media. Travel Radar offers high quality content in partnership with Mentour


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