If you thought that reading the terms and conditions on your next travel purchase is enough to keep you out of trouble, meet Thomas Hanko.
The veteran cruiser had booked an air-inclusive cruise to the Western Caribbean on the Holland America Line for himself, his wife, their daughter and son-in-law to celebrate the Hankos' 50th wedding anniversary. But several months before the trip, Hanko's wife died.
Hanko canceled the vacation and received a full refund of the cruise portion from Holland America. A cruise line agent reminded him that his airfare wasn't refundable and said that it was "up to his airline" to reverse the charges on his ticket purchase. Hanko turned to US Airways, which agreed to refund $2,071 to Holland America.
And then the cruise line kept his money.
"Holland America said that I had purchased a non-refundable airfare," Hanko says. "They refused my request for a refund."
Can a company do that? Yes.
Hanko's story isn't that uncommon, particularly for travelers who book package tours. Each individual component might come with its own restrictions, but even if they allow for a refund, you still have to live by the tour operator's rules. The only way around it: Book the items a la carte or buy travel insurance.
Holland America's written policy on cancellations is unclear. Although cancellation fees apply to the entire cruise booking, including air add-ons such as the one Hanko booked, the policy doesn't explicitly say whether airfares can be refunded along with a cruise. When the company contacted Hanko to tell him that it couldn't refund the airfare, it blamed US Airways' rules, noting that his tickets were non-refundable.
Hanko pushed back. Wasn't there an exception for the death of a passenger? In response, Holland America offered him a $480 cruise credit -- but still no refund.
"It's complicated," says Richard Alderman, director of the University of Houston's Center for Consumer Law. Hanko's rights to a refund, if any, are typically spelled out in a cruise line's ticket contract, the legal agreement between the passenger and the cruise line. "Generally, it's the cruise line's terms that will control the refund, not the airline's terms."
Refund problems like this are most common when travelers buy packages such as a cruise with airline tickets and shore excursion, or a tour with accommodations, meals and event tickets. The issue, Alderman explains, is that the tour operator has taken on some of the risk by buying these tickets in bulk and is contractually entitled to impose additional restrictions on a refund.
That also applies to tours that your operator cancels. Back in 2011, AnnMarie LaRosa-Gee asked me to help recover $6,032 for a tour of Egypt that had been canceled for security reasons. The company offered her two choices: either re-book the same tour later in the year or transfer all her credit to a new tour that same year. It turns out that the tour operator was well within its rights to impose those limits on the refund, even if it received all the money back from the hotels and restaurants with which it was working.
The United States Tour Operators Association defends these policies, saying that cancellation fees cover expenses for advance reservations and arrangements, and that a tour company may be liable for paying hotel and other services contracted on your behalf. The cancellation penalty covers those costs, as USTOA notes on its Web site.
Apart from buying each component of your trip separately, buying travel insurance might offer the only protection against these maddening policy layers. A "cancel for any reason" policy, for example, would have allowed Hanko to recover a percentage of the cost of his cruise, no questions asked, even if the cruise line refused to refund his airfare. Many other policies will also refund the cost of your trip when a close relative dies. (But read the policy carefully before filing a claim to make sure you're covered.)
The difference between Hanko's case and others is that he knew exactly how much of his airfare Holland America had received from US Airways, down to the last penny, and it appeared that the cruise line was keeping the money simply because it could. That seemed unreasonable to him -- and to me.
I contacted Holland America on his behalf to find out if it could make an exception to its policy. Five months after his wife died, a cruise line representative finally contacted Hanko with good news: Holland America would refund his entire airfare.
"We sincerely regret that this has taken so long, especially under the circumstances," a representative e-mailed him. "Please accept our sincere apologies that this was not handled in a timelier manner."
Better late than never.
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