ARC to Publish Debit Memo Reason Codes Early Next Year

The Airlines Reporting Corp.’s Debit Memo Working Group expects to publish and distribute its new standard reason code definitions for all major categories of debit memos by the end of first quarter 2016.

The categories include commissions, fares, taxes, refunds, exchanges, fees, and credit card chargebacks.

Standard reason codes will allow both travel agents and carriers to better analyze why debit memos are issued and create action plans to reduce their frequency.

The lack of standard reason codes has made it difficult to decipher the reasons many debit memos are issued.

For example, carriers have provided various descriptions of commission transaction discrepancies. The working group developed three core commission reason codes: incorrect commission, recall commission, and invalid commission, all with standard definitions.

The increased visibility into reasons for debit memos will reveal how travel agents and airlines can deploy resources to reduce their frequency. Agents may learn that additional training on international fares or applying taxes is required, for example, or airlines may decide to rewrite unclear fare rules.

Shelly Younger, ARC’s manager of settlement services, said the next challenge is to involve as many carriers as possible and encourage them to map their existing memo reasons to the DMWG’s standards.

“If we get widespread commitment to the standards, debit memos will one day be no more than a minor inconvenience instead of the challenge they are now,” she said.

The DMWG is comprised of representatives from the eight airlines that issue the majority of debit memos, travel agencies ranging from sole proprietorships to mega-size, IATA, GDSs, ATPCO, and ASTA.

Pic: Maarten Visser