Insights from The Guardian newspaper in Australia…

Author: David Drever
Date: 14 May 2020

COVID has left many struggling to get refunds from travel providers. In Australia, Flight Centre was charging $300 in processing fees per person, in some cases leading to fees that cost more than the value of the refund, until the Australian Competition and Consumer Commission threatened legal action, causing the company to waive fees for trips cancelled by travel providers. The ACCC also warned travel providers against retroactively changing their cancellation policies after tour companies including Topdeck and Intrepid attempted to retrospectively apply updated refund policies that would force customers to take credit rather than cash for cancelled trips.

Many frustrated customers are now faced with rebooking or losing holidays, despite not knowing when they’ll be able to travel. Other are being forced to accept credit notes from companies whose futures are uncertain. However, for Australian consumers, those who have managed to secure cash refunds or pulled the plug on planned trips prior to booking have experienced unexpected positives due to currency fluctuations that have moved in their favour

Benjamin Neutze, who works for Opera Australia, planned to visit New York at the end of April. He’d booked many elements of his trip nine months in advance, including accommodation at a hotel in Times Square. He was hoping to get a credit note, but the hotel offered him a cash refund. Because the Australian dollar had fallen in value against the United States Dollar - between the time of his booking and the time of his refund, he was lucky enough to get a refund that was $250 more than he had originally paid!

Australian photographer Patrick Stevenson had a similar experience. When he received the refund for his tickets to the now-postponed Coachella music festival, he discovered he had made about $200 due to currency fluctuations.

These are very current examples of the risk associated with global currency fluctuations. Remember, for every Australian merchant or consumer, there’s another in a different country experiencing heavy losses due to different currency movements.

Furthermore, in the example above, the hotel in Times Square lost $250 on that transaction, making an already horrendous time for them extra stressful from a cashflow perspective.

This can be seen in the above example, where Topdeck travel, like many operators, has been forced to call off tours until mid-2020. But last week the company told customers it had “updated” the refund policy, and would now be giving credit for future travel, plus an additional $100. The credit expires in December 2021. The updated policy was applied retrospectively, and some customers previously promised a refund, have now been denied one.

“Through this change we are offering a credit voucher in order to travel with us in the future, which will not be redeemable for cash refunds,” the company told travellers. It told one customer: “Please note: we are not able to process cash refunds – even if we had previously agreed this.”

The ‘C’ in FXCPay stands for concierge – and that’s what we’re heavily immersed in today. We’ve been helping our customers work with their acquirer partners to ensure that costs and cashflows are managed effectively during these stressful times. We help plan for every eventuality so that when global catastrophes happen, we’ve got your back. We consult on security requirements, cash flow, pricing optimisation, reporting and reconciliation and much more.

FXCPay can help businesses significantly reduce the risk of currency fluctuations. By using the FXCPay module we can offer just 1% as a total charge for all multi-currency transactions. This means that these multi-currency fees are often cheaper than your domestic currency fees, plus we help reduce risk and simplify reporting and reconciliation.

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