ARC Publishes Debit Memo Reason Codes

Photo: U.S. Air Force photo/Staff Sgt. Samuel Morse.

As promised, the Airlines Reporting Corp. has published the new standard reason code definitions, developed by its Debit Memo Working Group (DMWG).  

The project aims to address a longstanding problem with debit memos: Every carrier has its own way of describing the reason a debit memo is issued. By adopting ARC’s reason code definitions, they will all be speaking the same “debit memo language,” said manager of settlement services Shelly Younger. 

ARC has begun categorizing existing debit memos based on the new standard reason codes for the six carriers that issue the majority of memos. Additional carriers will be added throughout the remainder of 2016 and 2017. 

Nine primary debit memo categories were created by the DMWG: commissions, credit card chargeback, fares, taxes, refunds, exchanges, fees, booking, and miscellaneous.  

Several subcategories also were created for greater clarity. For example, the commission category is broken down into seven descriptors: incorrect commissions; incorrect commissions – invalid tour or ticket designator; incorrect commissions – missing tour or ticket designator; recall commissions; non-commissionable; non-commissionable –invalid tour or ticket designator, and non-commissionable – missing tour or ticket designator. 

That level of detail should make it much easier for an agency to understand why debit memos are issued, identify patterns, and consider what steps to take to reduce their frequency. For example, frequent debit memos due to fare or tax problems may call for additional agent training.  

If an airline sees a consistent problem with a fare rule, it may want to rewrite the rule. 

The debit memo categorization is integrated into ARC’s Memo Analyzer product and is expected to be available in ARC Memo Manager in 2017.  

In the meantime, it is available here.