Starting in March 2020, global travel came to a virtual standstill as a result of restrictions imposed to stop the spread of Covid-19. For the travel industry, it was apocalyptic. Chargebacks, which traditionally are a problem in travel just as they are for other e-commerce merchants, exploded as millions of travelers canceled their plans.
While the travel industry is returning in fits and starts, a new report from Chargebacks 911 and Airline Information found chargebacks continue to be a problem for airlines, hotels and other travel-related businesses. According to the report, the evolution toward booking travel directly with the merchant rather than through a travel agent has resulted in more chargebacks. Nearly half (47 percent) of respondents said chargebacks are more common on transactions booked directly with the merchant.
And, of those that responded to chargebacks more than a third had less than 25 percent of their chargebacks reversed. Twenty percent of merchants were unable to win even 10 percent of the chargebacks they challenged. According to Monica Eaton-Cardone, COO and co-founder of Chargebacks911, challenging times are not over for the travel industry regarding chargebacks and friendly fraud.
“The travel industry has suffered the most devastating economic impact from the pandemic,” she said. “It continues to lose revenue; refunds are requested on a massive scale and the ever-rising numbers of chargebacks could spell the collapse of several travel providers worldwide. There’s been a clear structural change in chargebacks after Covid-19. Travel is getting back to a new normal, and chargeback activity will follow suit. We're seeing a surge of travel-related chargebacks, foreshadowing another round of ‘dispute contagion’ – a clear indicator of growing behavior trends. Merchants can’t afford to ignore this problem.”
