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Commerce Commission guides travel sector on refunding defunct tickets

After more than one hundred complaints relating to cancellations and refunds lodged in the last few weeks, the Commerce Commission has issued guidance for travel retailers and consumers on how to navigate the disruptions to trade and what it means for consumer rights. 

Commission chair Anna Rawlings said it was a complicated legal area, and that the Commission’s main mission was to reduce confusion on both sides of the fence. 

The main factor that determines a customer’s right to a refund is what was agreed upon at the time of purchase. 

“If you had a right to a refund under the terms and conditions at the time you purchased a ticket or made the booking, then you should receive a refund,” Rawlings said. 

Further to this, Rawlings stipulates that businesses must not mislead customers into thinking they aren’t entitled to a refund when they are, or develop a policy that contradicts a consumers entitlement, or risk breaching the Fair Trading Act. 

“These are very difficult times for both consumers and businesses and some of these contracts will involve considerable sums of money,” Rawlings said.

“As a consumer, where you have a choice of a refund or credit, you should consider what is the best option for you personally. You may wish to support a local business by accepting a credit.”

However, accepting a credit runs the risk of that credit being lost if the business is unable to trade, Rawlings warned. 

The Commission also encouraged both businesses and consumers to be patient and respectful toward one another while they work through the challenges arising as a consequence of COVID-19.

The guidance pertains to retailers in the travel, events and weddings sector, as well as those that offer subscriptions or memberships.  

These sectors have been hit particularly hard by the containment measures announced across the globe, with the travel sector all but collapsed on the grounding of flights and shutting of borders.

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