Protect Your Travel Business (Part 1)

Dear Travel Agents/Advisors,

Since Covid, individuals in the travel industry have found themselves to be targets of class-action lawsuits for refunds and other issues related to the virus, like cancellations. Some even due to travelers getting sick or even dying during a trip.

These are the 99.9% of the cases in which a TA might be named on a lawsuit. A class-action lawsuit allows an individual to sue on behalf of a larger group, called a “class.” The individuals involved are called “class members.” There is no set number of class members. These cases frequently involve consumer claims and can be brought in state or federal court.

It is now very important that a travel advisor’s terms and conditions or contract with the customer contains a class-action waiver. Below is some information from Jeffrey Ment, managing partner of The Ment Law Group.

Let’s review what should be covered in your Terms and Conditions (TCs). You should consult with a lawyer to make sure that you’re on the correct path. There are four key areas that you should address: clients’ consent to be bound by TCs; payment terms; credit card chargebacks; and “force majeure” (our new favorite French phrase).

Securing a Client’s Consent to TCs

It is very important to start off with language that binds the customer to abide by your TCs. I would suggest the following: “By booking your arrangement with us, you are agreeing to be bound by the terms of this agreement and any additional terms and conditions of any supplier that are applicable to your booking arrangements. The lead passenger assumes the responsibility of sharing these terms and conditions with each passenger in their group, including payment of all amounts when due. It is the responsibility of each passenger to read our terms and conditions in its entirety. In addition, we reserve the right to modify these Terms and Conditions.”   Also, be sure to include the phrase: “If there is any part of these terms and conditions that you do not agree with, please do not use our travel services.”

Setting Clear Payment Terms

Travel advisors offer a service that customers should pay for. Charging a service fee is typical, but the key is to advise the customer right at the beginning of the relationship. I recommend including a statement such as: “Planning any vacation takes extensive time and effort before the departure date ever arrives. We have a rate structure to assist with the time spent covering the initial consultation, research and proposal. We will advise you of our fee for your journey. Our consulting fee will be charged at the time of proposal delivery, regardless of whether a client books a trip with us. When a client books a trip with us, this fee also goes toward travel support and the booking of the trip itself. The consulting fees are nonrefundable. We may also collect a commission from the supplier of your trip.” 

Transparency is key. Clients need to know that you are a valuable asset, and that they should expect to pay for your services.

Addressing Credit Card Chargebacks

There is one other key issue to address regarding payment: credit card chargebacks. Your language should state: “We accept major credit cards including Visa, Mastercard, American Express and Discover. Customers must provide a signed charge authorization agreement for every transaction relating to your trip. Your authorization is a binding agreement for us to charge your card, and as such, you waive any right to a chargeback in the case of cancellation for any cause (excepting fraud), including a force majeure event, as defined herein, and agree to refund policies and procedures as outlined in these terms and conditions. In the event a client attempts to chargeback, reverse or recollect a trip payment already made without our authorization, we reserve the right to collect all additional costs, fees and expenses associated with such chargeback, reversal or recollection, including, without limitation, attorney fees.”

The Inclusion of “Force Majeure”

I recommend clearly defining the phrase Force Majeure with this statement: “Force Majeure” means, in relation to our agency, in any circumstances beyond our reasonable control, (including, but without limitation, to acts of God, explosion, flood, forceful wind, fire or accident, war or threat of war declared or undeclared, acts of terrorism, sabotage, insurrection, riots, strikes, civil disturbance, sickness, epidemics, pandemics, quarantines, government intervention, weather conditions, defects in machinery and vehicles, delays or other unforeseeable event), we shall not be deemed to be in breach of these terms and conditions or otherwise be liable to you, and shall not provide any refund, by reason of delay in performance, or by non-performance, of any of our obligations hereunder to the extent that any such delay or non-performance is due to any force majeure. If our agency, and/or any of our travel suppliers, are affected by force majeure, they shall be entitled to, and may in their sole and absolute discretion, vary or cancel any itinerary or arrangement in relation to your trip.”

I know that we are in this business to serve and satisfy our customers, but we need to protect ourselves. These suggestions will help accomplish this objective. Don’t miss part 2 next week. Any questions feel free to contact me!

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