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Canceled Package Deals Can Carry Stiff Penalties

Canceled Package Deals Can Carry Stiff Penalties

Linda Burbank | USAToday

Question: Several months ago, my son booked a five-night trip to Las Vegas on Travelocity. The trip cost $1,656 for the hotel and airfare, and he paid for it using a Chase Visa debit card.

He later decided to cancel the trip due to pending surgery. He called Travelocity and was told he could get about $900 back on the hotel portion of the trip, but the airfare was non-refundable Travelocity said the refund had to go back to the credit card he used to purchase the trip, but he has since closed the account.

Now, because he’d lose so much money, he isn’t sure if he should cancel the trip, And if he cancels, he doesn’t know how to get his credit because that account was closed. Can you help?

Cathy Reinhardt, St. Louis

Answer: Reinhardt’s son bought a flight and hotel package from Travelocity with stiff cancellation penalties, which appeared both in a “review the policies” section before his purchase and in his confirmation e-mail.

With packages, prices of the components are masked. The hotel, airline and travel agency may all attach cancellation fees and restrictions to the purchase.

On the hotel side, early changes to Reinhardt’s Las Vegas trip would result in a $25 fee; last-minute adjustments (within three days of departure) would mean a charge of $179. Because he canceled earlier, Travelocity agreed to refund $902, the amount of his hotel stay, less fees.

The air portion of Travelocity’s packages are non-refundable, representative Joel Frey says. The rule departs from usual non-refundable fares, which typically allow travelers to cancel and receive a credit for use within one year, minus change penalties.

“We can make special requests to the airline for credit,” Frey says. “The airlines, however, are not required to provide a refund or a credit and consider our requests on a case-by-case basis.”

Because Reinhardt’s son canceled for medical reasons, Travelocity asked him for documentation from his doctor, then worked to salvage some of his airfare. The airline agreed to a refund, minus penalties, which came to $529.

The catch is that the refund had to go back to the credit card Reinhardt used for the original purchase. This is standard industry practice. According to Visa and MasterCard, the issuing bank is responsible for posting the credit to the cardholder’s account or for working with the customer to deposit the refund in another existing account, for example, or mailing a check.

Travelocity issued the $902 and $529 credits to Reinhardt’s canceled Chase account. Reinhardt also moved in the interim, so I provided Chase with his new contact information, and the bank called him to confirm that the money arrived and to send him a check.

How can you avoid trouble?

• Don’t use a debit card for large travel purchases. The cash goes out of your bank account, and having to wait for refunds to post could cramp your budget.

• Packages may come with cancellation fees and penalties, so read terms and conditions.

• Consider travel insurance, which may cover your losses if you have to cancel a trip.

• Wait to cancel your credit card until any pending refunds are completed.

Linda Burbank first began troubleshooting travelers’ complaints for the Consumer Reports Travel Letter. She now writes regularly for Consumers Union publications and is a contributing editor for National Geographic Traveler. E-mail her at travel@usatoday.com. Your question may be used in a future column.

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