Contrary to previous reports, most travel advisors should not be greatly affected by a proposed federal rule change from the Department of Transportation (DOT) that is designed to govern airline refunds.
The update was shared during a press conference at the American Society of Travel Advisors’ (ASTA) Global Convention, currently underway in San Franscisco.
After discussing the matter with DOT officials, ASTA discovered that instead of all travel advisors being responsible for all airline refunds, the rules would only pertain to agents who are listed as the official “merchant of record” for the transaction. In most cases, that will be the client’s credit card company, so the group of advisors affected is much smaller, according to Eben Peck, executive vice president of advocacy for ASTA.
“We’re not entirely sure where the wording about ‘merchant of record’ is coming from, but that’s not as bad as what it first appeared — that agencies would be responsible for refunds in every transaction,” Peck said. “We have begun the education process with the DOT and that will continue, but our position will be that the current system has some flaws, though it works well for our members. If you have the client’s money, and the client is entitled to money back, you give it to the client. And that’s also consistent with ASTA’s code of ethics.”
We’re not entirely sure where the wording about ‘merchant of record’ is coming from, but that’s not as bad as what it first appeared — that agencies would be responsible for refunds in every transaction.
Peck added that he is “cautiously optimistic” that ASTA will ultimately be able to successfully lobby the DOT on behalf of its members.
“This is yet another argument for why we need a strong national trade association,” Peck said. “We’ve worked with the DOT before, we’ve testified at DOT hearings and we think they are starting to get it — but we still have some work to do.”
Despite the potential rule change having a minimal effect on members, Peck and ASTA president and CEO Zane Kerby say that ASTA will continue to make sure members are not adversely affected.
“It’s a relatively small number of advisors who would be affected by the wording of the rule, but we’ve learned that with some packages, the merchant of record gets a little fuzzy,” Kerby said. “Still, we felt a lot better coming out of our meetings [with the DOT] than going in.”
According to Peck, ASTA shares the primary goal of the rule change — improving the regulations that govern airline cancellations and refunds — but the association believes the change should not unjustly fall on advisors.
“COVID-19, and now the post-pandemic period, have put a lot of stress on the airline refund system,” Peck said. “Advisors are always working to get fair refunds for clients, and that’s something we support.”
The public input phase of the rule change opened this week and runs for 90 days. ASTA will continue to lobby on the behalf of advisors throughout the process.
