Card Mills: Give ’em Shelter?

Posted on by in Publishers Corner

Supreme Court Justice Potter Stewart in  Jacobellis v. Ohio famously stated that pornography was hard to define but that “I know it when I see it.” Likewise, I think I know a card mill when I see one. It is not in the least bit surprising that these companies now indicate their business methodologies are legitimate based on the fact that there is no generally accepted definition of “travel agent”.

This column has argued on more than one occasion that the lack of an industry standard definition would ensure that card mills and MLMs would continue to adapt to changes in the public relations and legal environments in order to survive.

So what is a card mill?  Card mills are business entities that derive some portion of their revenue stream from recruiting people to be “travel agents” by promising discounted travel. The pitch is that since travel agents get to see the world for free or at highly discounted rates, the smart thing to do is to become a travel agent.  Moreover, since no definition of “travel agent” exists, anyone can pay to become one. Upon convincing a consumer to part with an under-$500 investment (the $500 limit keeps these companies from being subject to more strict regulatory scrutiny), they wave a wand and deem the consumer a “travel agent.”  An additional compensation is typically offered to recruit others to the program.

In recent months, in order to create a veneer of respectability, these companies have in some instances dropped the issuance of cards, introduced non-obligatory travel agent training programs (for a fee), or clamped down on the most egregious examples of their affiliates’ marketing efforts. Like viruses, these companies continue to evolve to the lowest common denominator that will permit them to operate under the radar of consumer protection agencies.

In reality, these companies are travel clubs.  But by calling their members “travel agents” they hold out the promise of a business opportunity with exciting benefits. It is wrong, it is cynical, and bottom line, it is bad for business.  Why? Firstly, because it is not honest. While some discounted travel does indeed exist in the form of FAM trips or as a result of netting out commission, the availability of FAM trips is certainly not what many of these companies represent.  Further, as nebulous as the definition may sometimes appear, it is pretty certain that real travel agents book travel for third parties, not primarily for themselves. Take the gross travel boasted by any of these companies, divide it by the number of agents they have, and it is pretty obvious that most of the travel being booked through the card mill agencies is for the personal travel of the pseudo agents.

So signing on with a card mill does not make one a travel agent and certainly does not guarantee discounted travel. But each time a consumer hears this message they are told otherwise.  The “anybody can be a travel agent” message denigrates the professionalism and the hard work of the traditional travel agent community. A quick estimation is that over 500,000 people carry pseudo-agent identification.  That is a sizeable chunk of the population removed from the market for traditional travel agents by the false representations and promises of a few companies, representing far more than a billion dollars in travel. At the geometric rate that the card mill companies and their recruits are popping up, this number is certain to grow unless steps are taken to arrest the deceit being perpetrated on the public.

Who are these companies? Try this experiment.  Google the phrases “travel like a travel agent” and “savings on your own travel”. Then, look at the websites of the companies returned as results.  Use your own judgment and decide if any given company is basically telling consumers they can travel the world on the cheap by paying a small fee. If so, it’s a card mill in the humble opinion of this editorial. Spend time on their sites and see if you feel their representations to the public are honest. 

And one other thing – see if any of the organizations to which you belong, or the media you read,  are giving card mills shelter – a cloak of respectability. If in your research you find one of your industry organizations or media giving these companies shelter, ask your leadership “why?”  There may be a perfectly good reason why a company you think is a card mill also has a membership with one of the organizations to which you belong or why a travel club is elevated to the position of “travel agency” on a  “power list” in a media’s list of the top travel agencies in the country. But ask about it – you have a right to answers – you have a right to know if your leadership is properly protecting the interests of the traditional travel agent. Your associations, consortia, host agencies, and the industry media have decided who they will promote and do business with, and who they will provide with their approval as “travel agents.”  You are not out of line to ask for an explanation when such actions run counter to your own best interests.

TRO is not exempt from criticism.  If you feel that in any way we ever deviate from our mission to enhance the professional life of traditional travel agents, make us explain ourselves.

One final point that puts TRO at odds with other patriots in this fight: it is not the responsibility of suppliers to monitor your ranks.  Travel agents need to set the standards and decide who is and who is not a travel agent,  not suppliers.  Suppliers have one concern – selling their products.  This is your industry and your fight. Take it on.

ASTA, IATAN and TRO are sponsoring a webinar on March 25th. You can register here.

The webinar will give a brief history of the card mill phenomenon.  It is not intended to be a fair fight.  No card mill representatives will be given a spot to explain their position.  However, traditional travel agents will be provided with the tools they need to effectively battle the card mills at the local, grassroots level. The next time one of your clients tells you they are thinking about paying $495 to become a travel agent, you will have a website to send them to where industry experts, state consumer agencies, judges and consumer advocates will explain the fallacy of these business opportunities.  You will be provided with press releases to use in your local communities and a PowerPoint presentation to show at speaking opportunities.

It is time for the traditional travel agency community to protect their turf in a logical and rational way.  Too much of the conversation up to this point has been wrong-headed and unprofessional.  It is time to be much more calculating. Card mills recruit on the basis of emotion and greed – they depend on an emotional buy from consumers.  If you slow their sales cycle, their success rate will fall dramatically. Present consumers with logic, with facts, and with evidence, and they will better understand that $500 and a website does not make a travel agent.

Flush them out.  No shelter.  It’s your industry and it’s time to take it back.

 

  24 thoughts on “Card Mills: Give ’em Shelter?

  1. 1SusanG says:

    Very well said. It does seem that each time a new card mill or scam pops up, there is someone to lend them credence. All one has to do is to look at the card mill to see who supports them. Clia is a big one and so is Arta and Ossn

  2. 1Steve Mencik says:

    “Clia is a big one and so is Arta and Ossn”.

    The article indicates that the card mills are not being invited to the seminar. ASTA and IATAN are being invited. How about the three mentioned by SusanG, especially CLIA and OSSN?

  3. 1Richard Earls says:

    In all fairness to any organization, or media, do ask them directly. There may be extenuating circumstances or differences of opinion about any given company’s status that has indicated to an industry organization that the company deserves membership. I also offer any organization an opportunity to respond in our “Point to Point” column. – RBE

  4. 1Laura says:

    Great article Richard! Sadly many organizations do lead consumers to believe they will be travel agents, when in actuality they really gain nothing more than a small rebate on their own travel. It’s amazing that vendors are willing to offer preferred rates to these organizations based on sales. Any many of these faux agents have caused irrepairable damage to our reputations. If ever there was an industry in dire need of regulation, it’s travel.

  5. 1Lise says:

    Very well said. The card mill issue is a huge thorn in my side. It is all about money and greed. I am sick and tired of the lack of respect our industry receives over and over.

  6. 1Richard Earls says:

    The Seminar participants are ASTA, IATAN and John Frenaye, moderated by this writer. ASTA has published a very informative guide to Card Mills and IATA has been actively dismissing companies wrongly using their logo on ID cards. There are no other participants on the panel.

  7. 1Wayne says:

    Richard, did you know that there are requirements in place before you can get a card with YTB now? You have to sell travel before they are issued. A “Card Mill” just gives them out. YTB has tried so hard to improve its standards and provide better training but that fact just keeps getting overlooked or ignored. I have often wondered how many traditional travel agents have gone into the industry thinking they would get discounts or travel free. There is nothing wrong with wanting to earn those perks. I am going to Cruise3sixty in a couple of weeks and I am not looking forward to being looked down or ridiculed by “professional” travel agents. Some of us in YTB really do sell travel and we love this industry.

  8. 1Julia Reid says:

    One thing not mentioned. Most often the fam trips now offered are just regular vacation packages reduced by $100 or so(the commission amount).
    Since these “card mill” participants have flooded the market, the real fam trips for “real” agents have almost vanished.
    You have to contact a supplier or airline that you do a lot of business with and they will often offer you the “real deal”.
    It is very hard for an airline to knowingly weed out these pseudo agents and so we have less and less real benefits from the airlines.
    Really don’t see much hope in stopping them. Each of us must just establish our own reputation.
    J Reid, Mission Travel & Tours Inc.

  9. 1Richard Earls says:

    Wayne:

    Please view the following:

    http://www.ytbendurance.com/travelagent.htm

    We both know this is the standard presentation. There are some in this industry willing to designate the affiliates of these companies as “travel agents”. I have a greater respect for the industry, and language, than that.

    Richard

  10. I agree the travel industry needs to be regulated and I’m happy to hear IATAN is supporting real travel agents. On the other hand, I can understand how card mills came about…it only makes sense that someone/business wants to capitalize on an unregulated market. Moreover, these card mills scare me little compared to the efforts made by the airlines to wipe-out travel agents all together. It becomes harder and harder to compete with airline websites (Expedia, Travelocity, and the likes) when they continue to offer lower prices than what agents can obtain before adding their commissions. In fact, it’s why most members who join these card mill companies fail and or give up on the hopes of competing and/or making money in our industry. Those of us who have survived through the years have done so because of our good reputations with our customers…ie…customer service.
    In short, I’m for regulating card mill companies but I don’t think they’re our biggest threat to long-term survival.

  11. 1Kelly says:

    Richard,

    I too am an RTA with YTB and I do focus on travel. I have never taken a FAM trip, nor have I taken advantage of the industry. I focus on gaining knowledge of the industry so I can offer service to my clients. Like Wayne, I do not find it comfortable for people to stereotype all individuals with all companies looked upon as “card mills” the same way. There are many of us out here doing the same thing a traditional travel agent is doing – learning and selling. Please don’t continue to perpetuate the stereotype across all individuals.

  12. 1Sherri says:

    If you are with YTB and want credibility among your agent peers, then align yourself with a company that is respected. You could make more money anyways and not be eliminated from many fams. Why would you want to discredit your business name if you are trying to build your business? If your clients know you are associated with YTB, you better get worried about how this makes you look, with all the negative publicity, which WILL continue until YTB is shut down.

  13. 1Wayne says:

    Richard,

    Actually, this is the standard presentation:

    http://enhanced.ytb.com/Default.aspx?wa=dare2explore

    Regardless of what you think of our business mode, we do sell a lot of travel.

  14. 1Richard Earls says:

    Wayne:

    That may be the “official” presentation, but it really deviates very little from the standard one – give us money and we will make you a “travel agent” and you can see the world for less.

    We differ on the ethics of this. What about full disclosure of an F rating with the Better Business Bureau http://www.bbb.org/stlouis/business-reviews/travel-agencies-and-bureaus/y-t-b-international-inc-in-wood-river-il-110220794 or the California Attorney General’s action or the loss of IATA or the fact that major cruise lines and suppliers will not do business with the company. The presentation is slick, but it is deceptive. Those agents who are serious about the travel industry would do well to seek out a host agency that can assist them to build their travel business on the solid foundations of hard work and real commitment to the industry.

    Unfortunately, these “commenting” conversations seldom go very far and are tiresome to all. The next step for TRO will be to properly equip the traditional travel agents with information like the above and to educate the public with facts.

    Richard

  15. 1Mary says:

    Given the SEC filings on YTB that show a company in disarray I do not understand why anyone would stay with them. If you are serious about selling travel there are plenty of hosts to align yourself with that pay better and offer a better commission split.

    As to the comment above about being shunned at 360 it is quite simple if you don’t want to be shunned—leave them and join another host.

    Great article as usual Richard. I look forward to the webinar.

  16. 1Gregg Welpe says:

    My disdain is aimed for the suppliers and trade show organizers that cater to these RTA’s. How can I get a supplier’s attention as a small agency when the Card Mills are showered with attention by our suppliers. As far as trade shows go, how can I get a seat at the table when all are taken by these RTA’s???

  17. 1Aleic says:

    I agree with you all that the card mills do nothing in general to help the plight of the travel agent and furthermore, have caused divsion amongst some vendors and agents. However, lets not forget it isnt just the cardmills at fault here. Its the general population that has been hooked up to the nipple and fed with the belief that they deserve a deal on everything. Travel just happens to be one of the most common things. You only have to look around almost any corner, in any city or town and you will run into a Walmart Super Center. Its no mistake they have been booming before our ecenomic bust and will continue to do long after. Why, because the right to a low price is the god given right of every American, even if the ignorence to that fact is only now just rearing its ugly head. Fact is for over 40 years we were taught and basically commanded to “BUY” and the drive to find a deal and expect it is a natural reaction to that. Cardmills do not help the industry but lets not forget to at least address part of the reason they exist… I believe Gordon Gekko said it best… greed it good

  18. Once again I will say thanks for an excellent article highlighting — over may paragraphs — the key concept: without a definition of what a travel consultant is, anyone is free to enter and abuse the market. I feel like a broken record as I again say:

    1. We should abandon the title/job description of “agent” to be replaced by consultant
    2. We should charge for and be paid for our consulting activity — not our sales activity. This is a very painful thing to grasp and means we need to ween ourselves from our opiate like addition to commissions to be replaced by fee income. The airlines forced us to do it and those of us still around and consulting in the air/transportation arena are better and stronger for it.
    3. There needs to be some definition of travel consultant which stems from a recognized course of study followed by meaningful testing resulting in certification against which we can then be registered. Either ASTA steps up to the plate to lead this charge or someone else will; I only fear it will not ultimately happen until our entire segment of the industry is descimated beyond repair.

    The only downside to the above: the travel media would have to figure out another angle about which to report — since everything we now read about on page 1 would go away. As for me, that would certainly be an excellent outcome!

  19. 1Fred Kerner says:

    I have one question for those of you from YTB. “How much did any of you earn from booking travel in 2008?” I personally did a little over $500,000 in gross sales last year. I would be very surprised if any of you YTB’ers even come close to that. I’m not bragging but I’m a firm believer that you need to work full time in this business to really know how it works. You need to be thouroughly familiar with the various travel suppliers and destinations that they offer. We are travel professionals not part-time sellers of travel. I’ve seen plenty of YTB people at seminars and it’s obvious they are there just for the perks. I’ve even experienced YTB agents coming into our agency office and trying to recruit us into their program. That takes a lot of nerve. The execs at YTB are the ones making all the money. Not you! Send me an email and tell me how much travel you have time to book when you’re not working in your full time job. My address is fkerner@grandviewtravel.com.

  20. A great and timely article indeed. Take a look at responses on similar aricles – a handful of professional travel counselors and YTB or similar outside sales agents – we are serious about our chosen career so lets not get upset at each other. It’s the other 90-95% pretend, part-time travel agents we are complaining about and hold in disdain. In the last 28 years, I have never sold less than $500,000 and even crossed the million dollar mark a few times.
    However,it is also the suppliers who laugh while reading all these comments. They keep getting sales and as one of the cruses reps told me ‘as long as numbers are there, we will worlk with whoever’. ASTA is a mere shell of what it used to be; I am not sure if ARTA is even around; CLIA is a joke. The Travel Institute or IATAN are the only one’s even interested in some standards of professionalism.
    If the good YTB agents do not want to be held in disdain then tell me why some have come into my office and get me to sign up? Why, at a tradeshow, they were trying to sign up the bartender? Why, at the St. Louis conference, one of them tried to sign up the bus driver? What are you really selling – travel or a MLM? That is what we complain about. Most of YTB agents know they cannot make it in selling travel so they go for the MLM aspect, admit it. To buy your own travel to save 4-5%, is not selling travel. Today, I had a $40,000 sale day which included six cruise cabins, a 14 day all-inclusive tour to Italy, a trip to Myanmar and eight international tickets. When did any of you do that? I do that on a weekly basis and that is why we get upset when we hear of card mill members using up fam trip space even though you have no idea what a true fam trip is. How may of you on this weekend’s cruise to nowhere on board the new Carnival Splendor from San Francisco? I bet no one and if you are, you have earned it. And you, I welcome to the ranks of travel counselors/advisors.
    Let’s get the suppliers to take responsibility NOW. They are the ones allowing it.

  21. 1Adrienne says:

    It sickens my stomach when I am attending a travel industry function and “wanna be” travel consultants are there. They try to recruit real agents to their group which is laughable. Then all they want to know is “what’s the trip they are giving away?”

    The suppliers must take a clear stand on who they permit to sell their product. If the suppliers shut out the card mills, then effectively, they are shut down. It is also up to ASTA and CLIA to tighten their regulations. IATAN has done so by compellling agents to now apply each year with proof of income in order to retain their ID.

    We need to put the word “professional” back in the travel industry. Can you imagine your neighbor giving you advise about the law because a lawyer told him he could if he pays him $500.00 a year? Would you buy insurance from someone not licensed to sell insurance?

    We need numbers to yell it out to the suppliers and the public….NO MORE CARD MILLS

  22. 1Linda says:

    So, I registered and listened in on what was being said. I noticed most speakers spoke with great caution to avoid being sued. I found it interesting that I, a “Referring Travel Agent” from a so called “Card Mill” company, knew more about the new CLIA requiremetns than any so called “Professional Travel Agent” on the call. Before assuming that all referring agents don’t make money selling travel, you should really check the statistics of those that do sell travel. Since “home-based professional agents” are concerned with not meeting the CLIA requirements, I suggest you do an “industry -wide” analysis of their results and see how many, on average, make any more than I do! I have personally sold my 25 required cabins for CLIA qualification…and it didn’t take me the 2 years that CLIA allows, it only took me 3 months and it was in the worse economic times ever! I do this “part-time” but I have achieved the highest rank in course training that Princess and Cunard offer. That is why you feel a need to stop me and the company I am affiliated with!

  23. 1George says:

    Appreciate the info guys, thanks

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