Travel Merchant Accounts
The meteoric rise of people travelling overseas on holiday – brought on by cheap airfares and package deals – has signaled a boom time for those businesses operating tours and excursions in tourist hotspots. Research from the World Travel and Tourism Council is predicting that worldwide tourism revenues will top $15 trillion by 2017. In order for the tourist industry to operate, merchant accounts are necessary for travel operators from all spheres of the industry, from major global airlines to tiny independent hoteliers and excursion operators. As most operators within the industry will be well aware, merchant accounts for many businesses working within tourism fall into the high-risk category. It is vital to manage the risk that your customers pose in order to limit the amount of chargebacks you are faced with.
One of the major reasons that tour operators fall into the high-risk category of merchant accounts is down to the high price of many of the individual holidays booked coupled with the length of time between a customer making a booking and their actual holiday. With foreign exchange rates fluctuating on a daily basis and the global economy looking dicey, customers can end up spending more than they originally intended. This overspending – linked with the buyer?s remorse that can set in over an extended period of time – can spark customers into seeking refunds for holidays. Some strategies to limit this source of chargebacks include taking a non-refundable deposit for the holiday if it is booked over three months from the date of departure or keeping in contact with the customer during the gap between booking and their departure, sending emails containing pictures, videos and other information about their intended destination.
The fact that travel is an emotional purchase can hurt businesses. Requests for refunds if the holiday experience wasn’t as amazing as the customer had dreamed of can be limited if customers? expectations are managed by providing plenty of accurate information about their holiday before they travel. Although there are many things a tour operator cannot change or influence, some customers will have very high expectations of their holiday and if they are not met, they may well seek compensation.
Another such issue, which is harder to deal with, is customers trying to claim back a refund from a holiday that had no major problems or issues. This so called friendly fraud will occur when savvy customers know what they can call foul over. They may well claim that services were not delivered as advertised, or transactions were not authorized. Keeping advertising and business practices squeaky clean and properly audited can limit this type of refund request.
Limiting the opportunities for customer dissatisfaction is difficult in an industry built on emotion and expectation. Ensuring that all advertising is as factual as possible and that customers are communicated to regularly can help to avoid chargebacks to your merchant account.