We understand how important it is for your business to be able to continue operating in a time of social distancing or possible quarantine. The content on this page is intended to clarify some questions you may have.
Please remember that if you are operating and providing travel services, you must be licensed by us. To understand your licensing options or if you make the difficult decision to cease operations, please contact us.
Travel vouchers/credits and refunds
The Canadian Transportation Agency’s (CTA) Statement On Vouchers, published in late March, says that vouchers or credits for future travel are appropriate in the current environment, given that they don’t expire in an unreasonably short period of time. Read their follow up Frequently Asked Questions about their Statement.
We’ve been getting questions about travel credits from the travel sector and consumers. BC’s consumer protection laws don’t speak to whether vouchers or credits are an appropriate method of refund. But there are some important things to know.
You decide what form of refund a customer is entitled to receive. Offering a refund to your customers for booked travel is your decision and must follow your business refund policy. Remember that your refund policy should be clear to your customers when booking travel.
If you decide to offer a voucher to a consumer, and most often, it’s the consumer’s choice whether they accept it or not. When offering a voucher, be aware that it must comply with BC’s prepaid purchase card law that says that, in most cases, prepaid purchase cards/vouchers/gift certificates are not allowed to have expiry dates.
Times when an expiry date is allowed:
When it’s issued for a specific good or service
When it’s issued for a charitable purpose
When it’s sold for a promotional purpose or at a discount
Travel vouchers or credits would not be covered under the Travel Assurance Fund (TAF) if the travel agency, or third-party supplier, ceased operation. Here’s why:
If a travel agent, or third-party travel supplier, ceases operations, there needs to be contracted travel services in order for a consumer, or licensee, to apply to the TAF for compensation. A travel voucher or credit is not considered to be a travel service and can’t be claimed against the TAF. When travel agents or third-party suppliers cancel arrangements and offer credit in the form of vouchers or certificates, the consumer no longer has a contract for travel services, but simply a promise of being able to book travel at some future point in time.
A “force majeure” clause in the contract (for events such as weather, war, or pandemic) that results in the cancellation or delay of travel services may release a supplier from the contractual obligation to provide travel services. In these cases, because the force majeure nullified the original contract for services, there is no failure on the part of the supplier to provide the service, and the loss is not typically covered by the TAF. However, if the end supplier goes out of business and the consumer is no longer able to get travel due to the business failure then they may be covered. TAF claims are assessed on a case by case basis.
We’re hearing from consumers that travel agents are updating their cancellation policy to include COVID-19 information after the consumer purchased travel services.
As a business, you must adhere to your refund policy that formed as part of the contract that was in place when you sold the travel services. Failure to do so could be construed as a breach of contract.
