When Consumers Make Online Booking Errors, Who Should Pay and How Much?

If people make a mistake on a non-refundable online booking, realize minutes later, then try to cancel, what should their penalty be? 

• The full amount? After all, by pressing the purchase button on a non-refundable product, you are declaring that you understand what you are buying and accept the terms and conditions.

• A change fee? This seems like a fairer option on the surface. You messed up and are responsible for full payment, but the seller understands that people make mistakes and takes a reasonable approach.

• No penalty: a cooling-off period that allows for changes or cancellation without financial consequence.

The issue came up in the Canadian Travel Professionals private group on Facebook. Travel advisor and frequent commentator Paul Neilsen drew attention to a CTV News story about an Ontario couple who planned to celebrate their first wedding anniversary in Jamaica. 

Using Expedia, the couple says they attempted to book an air-inclusive package, but somehow didn’t notice that they price they were quoted was hotel-only.

“Right after we booked it we realized that it just included the hotel option, so we cancelled it immediately and we were going to rebook it properly,” Lizanne Hasmatali told CTV. “They saw that we cancelled in ten minutes, but it didn’t matter. What mattered is that it was non-refundable.” 

Hasmatali told CTV News she was shocked to learn the booking was non-refundable and she would not be getting back the $4,183 for the hotel stay. Without the refund, she said they were unable to book the resort again and ended up having to stay home. (The option of booking flights to go with the hotel was not discussed.)

An Expedia spokesperson told CTV: “If a traveller realizes they’ve made a mistake on a non-refundable hotel booking or one that is past the penalty-free window, they should contact support via the Expedia 24×7 Virtual Agent available on our mobile app or website.” The spokesperson added that Expedia “follows its hotel partners’ policies for cancellations and refunds.”

CTV says it reached out to Expedia through its ‘Consumer Alert’ presenter Pat Foran. The story claims that the Travel Industry Council of Ontario (TICO) also got in touch with Expedia on behalf of the consumer. 

That’s where Neilsen took issue, arguing that the organization charged with enforcing the rules on selling travel in Ontario should not be involving itself because no rules were broken.

“That couple who purchased hotel-only on-line were not smart. You called Expedia and told them that they were innocent babes and needed a refund. From now on we will have people demanding stupidity-refunds,” Nielsen wrote.

In a CTV interview, TICO President and CEO Richard Smart pointed out the importance of being careful when booking online   “It’s important to take your time when making a booking,” he said, adding that using a registered travel agent can help to avoid mistakes and for those who do book a trip themselves, to always check the refund policy. He also noted that there is no cooling-off period when booking a trip.

“Look before you book. Be very careful and read the terms and conditions.”

Should there be a cooling off period? Travel Market Report Canada asked Richard Vanderlubbe, President of hybrid online travel agency TripCentral.ca.

“This is really tough,” Vanderlubbe replied. “When you purchase gasoline, you can’t put it back in the pump, even if you accidentally pump the wrong blend into your car. And if you make an offer on a house with a deposit, you are entering into a serious commitment that also cannot just be cancelled.” 

Vanderlubbe notes that hotels offer a variety of rates, some fully refundable, some partially refundable and some completely non-refundable. “When your funds go overseas, there really is no control other than a credit card chargeback by the customer,” he said.

“Many suppliers have some kind of a grace period for errors like this, including name misspellings. For example, both Air Canada and Westjet have a same day cancellation policy, but not overnight. This humanizes the reality that mistakes happen, and if caught quickly, there is no damage to the selling party.”

There is work in “undoing” a a booking, Vanderlubbe says, so an admin fee is reasonable, “but a full “gotcha” of 100% seems unreasonable.”

Vanderlubbe suggests that if there was a mandated cooling off period, “the industry would break,” as people would be cancelling for all kinds of reasons, most importantly, changes in prices – even minor, imposing much more cost on the whole system, thereby ultimately raising prices for consumers to cover that additional cost.  

The TripCentral.ca president said the advice from TICO’s Richard Smart’s advice is correct – be careful before booking.  

“Ask questions. It’s a big purchase and consumers don’t know what they don’t know. It’s our job to disclose these terms and offer alternatives and let customers make informed decisions.” 

To sum up his views on the issue, Vanderlubbe says: “Flippant cancellation would impose a lot of cost and be impossible to regulate. Zero tolerance will likely result in consumers making chargebacks.”

In this case, Vanderlubbe says, logic and humanity prevailed. “The intervention of the media put pressure on the company to be reasonable – and this also places a cost on the industry.  If every file has to escalate to this level, it is a lot of labour.”