Can a struggling firm refuse to refund your pre-Covid holiday ...

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Can a struggling firm refuse to refund your pre-Covid holiday booking ?

This is now a major problem as people want their money back from pre-lockdown bookings

Consumer journalist
Image: Jacek Dudzinski/123rf

If a payment is made to a business in error, and that business is experiencing extreme financial hardship at the time, is it justifiable for the company to refuse to refund the money immediately?

Years ago, I was contacted by a woman who had paid R12,000 to a company, which was on her list of beneficiaries on her banking app, as she had previously used its services.

She’d meant to pay the company one above it on her beneficiary list.

For weeks the company made excuses about why the money wasn’t being paid back – the owner was away; the person who needed to authorise the payment was sick – but it soon became clear they had no intention of refunding it.

Intrigued at how the business justified holding on to money it had no right to, I contacted the owner, who told me he had been diagnosed with a brain tumour and needed the money.

My inbox is crammed with complaints from people who made travel bookings pre-lockdown for holidays that now can’t legally happen, and they’re being denied refunds.

End of story. The money was never refunded.

Ram Barkai of Cape Town’s “mistake payment” experience is a little different, but to my mind, the same principle applies.

On June 24, having read that overnight leisure stays within the province were permitted under advanced lockdown level 3, he made an overnight booking for himself and his wife at Aquila Private Game Reserve, about two hours’ drive from central Cape Town.

The booking, which included a game drive, was for June 29, to celebrate his wife’s birthday.

He says at that time there was no obvious warning on the website that Aquila remained closed, and certainly there was no digital impediment to the making of that June 29 booking, nor paying for it – R5,450.

Having received no booking confirmation, Barkai called the establishment, and was told the booking was invalid as Aquila remained closed.

He was offered two choices: to postpone his booking for up to two years and get “added benefits” when he made a booking, or get a refund, but some time in the future – “please give us time as we have no staff and limited resources”.

“We are not denying a refund due to the Covid-19 situation,” he was told, “although our cancellation terms are clearly stated on our website.

“We are, however, in an unfortunate position brought about by the pandemic.”

Unhappy with that response, Barkai turned to me for help.

This was, as Aquila’s marketing manager Johan van Schalkwyk put it, “a completely unique once-off situation”.

My inbox is crammed with complaints from people who made travel bookings pre-lockdown for holidays that now can’t legally happen, and they’re being denied refunds.

The legal position, as articulated by consumer goods and services ombud Magauta Mphahlele, is that full refunds are due to those whose bookings have been cancelled through no fault of theirs.

But given that the service providers have been forced to close and that the travel industry is on its knees, consumers should accept postponements or credit vouchers if at all possible.

When Barkai made that booking, the government had published regulations that allowed for leisure travel within provinces, but Aquila had chosen to remain closed.

Barkai’s ‘mistaken’ payment for a leisure break to celebrate his wife’s birthday just five days later should have been reversed as soon as it came to light, as tempting as it was to hold on to it for a while.

(This was overturned in fresh regulations, published soon after President Cyril Ramaphosa’s address last Sunday night.)

“It is unfortunate that Mr Barkai guided himself through the entire automated process and dismissed all the notices that we remain closed and made this booking,” Van Schalkwyk said. “We have since added more steps to ensure this would not happen to anyone else during the enforced lockdown.”

He said the reserve’s cancellation policies were in line with some of the biggest global travel brands and went on to describe the desperate situation the establishment found itself in – a business interruption insurance claim rejected, zero income, hundreds of staff receiving only limited TERS benefits and food bought by Aquila with its last cash reserves.

“We continue to need to balance the welfare of our people and animals with that of our brand to ensure our teams have a job to return to in the near future and honour our refunds,” he said.

“We have most certainly not denied refunds or charged penalties for any cancellations.”

Who can fail to be moved by such a desperate plight, one shared by so many leisure venues across the land?

How do you keep paying your overheads and look after your staff when there’s no money coming in?

On the other hand, I’m dealing with a deluge of e-mails from consumers who’ve cancelled their destination weddings completely, or whose age and medical conditions makes it unwise in the extreme to embark on an international trip, or have grave doubts that they will be able to afford to travel in future. To ask them not to expect the refund they are legally entitled to is also unfair.

In this case, Barkai’s “mistake” payment for a leisure break to celebrate his wife’s birthday just five days later should have been reversed as soon as it came to light, as tempting as it was to hold on to it, at least for a while.

I’m happy to report the refund is being processed as I write this.

Lives vs livelihoods; consumer rights and a service ethic vs a business’ desperate struggle to survive – these are agonising conflicts.

And sadly there’s no end in sight.