Travel credit vouchers: how to use them without losing value

Travel credit vouchers are a promise to give you value later, and a promise is only as good as its terms. If a flight, cruise or tour was cancelled and you were offered a credit note, read it before you accept it. The Australian Competition and Consumer Commission (ACCC) has said what a fair credit looks like, and the key points are short.

This guide sets out what the ACCC said in March and April 2020, what to check on any credit, and what to do if the terms look poor. It is general information, not legal advice.

Sources for this section: ACCC, Advice on event and travel cancellations due to COVID-19 (18 March 2020); ACCC, COVID-19 (coronavirus) information for consumers.

What the ACCC expects

The ACCC is the national consumer regulator. On 18 March 2020 it said that when events, flights or other travel services such as cruises are cancelled, it expects refunds or another remedy, such as a credit note or voucher, to be offered in most circumstances.

Its consumer page repeats the point. If your travel is cancelled, you should contact the business and ask for a refund or other remedy. A credit note is one possible remedy. It is not the only one.

The ACCC also asked businesses to treat customers fairly and with compassion during the crisis. It asked customers to be patient, because many small businesses were doing their best to respond.

Sources for this section: ACCC, Advice on event and travel cancellations due to COVID-19; ACCC, COVID-19 (coronavirus) information for consumers.

Check the expiry date

Expiry is the first thing to read. The ACCC says a credit note or voucher should have an expiry date that is long enough for you to actually use it.

That matters now. No one knows when travel will return to normal, so a credit that runs out in a few months may be worth nothing.

Ask these questions before you accept:

• What is the last date to book, and what is the last date to travel?
• Does the date apply to the booking or to the trip itself?
• Can the date be extended if travel is still restricted?

Get the answers in writing. An email from the business is enough to keep on file.

Sources for this section: ACCC, COVID-19 (coronavirus) information for consumers.

Know your refund rights first

A credit is not always your only choice. The ACCC page says that if your travel was cancelled because of government restrictions, your rights under the consumer guarantees can be affected. But you may still have other remedies outside the Australian Consumer Law.

One example is the terms and conditions of your ticket. If those terms gave you a right to a refund when you bought the ticket, the business is not permitted to change the terms later to deny you that refund. The ACCC also points to possible rights under common law, contract or state laws.

So before you say yes to a voucher, find your original booking terms. Check whether they promise a refund when a service is cancelled. If they do, you can ask for the money back instead.

The ACCC adds that if a business does not honour its own cancellation or refund policy, that may be misleading conduct under the Australian Consumer Law.

Sources for this section: ACCC, COVID-19 (coronavirus) information for consumers; ACCC, Advice on event and travel cancellations due to COVID-19.

When you cancel yourself

Things change if the trip is still going ahead and you choose not to go. The ACCC says that if you no longer wish to travel because of health worries, this may be treated as a change of mind. Your rights then depend on the business's terms and its cancellation policy.

You can still ask. The ACCC suggests you contact the provider to see if you are entitled to a full or partial refund, a credit note or a voucher. If you have a health condition that puts you at higher risk, it says to ask whether the provider will offer a refund or a voucher for a later date.

Many travel insurance policies exclude cover for pandemic diseases, the ACCC release notes. The release says ASIC is the consumer-protection regulator for travel insurance and points readers to its MoneySmart travel insurance page. Check yours before you assume a claim will be paid.

Sources for this section: ACCC, COVID-19 (coronavirus) information for consumers; ACCC, Advice on event and travel cancellations due to COVID-19.

A checklist for any credit

Before you accept a voucher, go through this list. The ACCC does not publish a checklist of its own, so this is our summary of its advice and plain good sense.

1. Ask for the terms in writing. Keep the email and the original booking confirmation together.
2. Check the expiry date. Make sure it is long enough to use, as the ACCC advises.
3. Check the name on it. Find out whether another traveller can use the credit or whether it is tied to the person who booked.
4. Check what it covers. Ask if it works for fees, taxes, upgrades and extras, or only the base fare.
5. Check where it works. Some credits can be used only on certain routes or tours.
6. Ask about the cash option. If your ticket terms promised a refund, say so in your request.
7. Note who is holding your money. A voucher from a small operator carries the risk that the business may not be trading when you want to use it.

Points three to five and seven are questions we think are worth asking. The ACCC pages do not set rules for them, so the answer will depend on the terms the business gives you.

Sources for this section: ACCC, COVID-19 (coronavirus) information for consumers; ACCC, Advice on event and travel cancellations due to COVID-19.

If the terms look unfair

Start with the business. Write a short, polite email that names your booking, says what happened and states what you want, whether that is a refund or a credit with a longer expiry date. Keep it calm and short.

If that fails, the ACCC says state and territory consumer protection agencies may be able to help with guidance or conciliation under state laws. You may also wish to get independent legal advice about your rights under common law or contract.

Finally, watch the news. The ACCC said its page would be updated as new guidance came out, so check it again before you sign anything.

Sources for this section: ACCC, COVID-19 (coronavirus) information for consumers.

Sources

1. ACCC, Advice on event and travel cancellations due to COVID-19, 18 March 2020: accc.gov.au
2. ACCC, COVID-19 (coronavirus) information for consumers: accc.gov.au