Travel agents need to beware of supplier policies which can impact our commissions. I learned a painful lesson the hard way, so I’m sharing it here in hopes that other travel agents can avoid my pain. Here it is: not all supplier gift cards or credit cards are travel agent friendly.
Here’s My Experience
My local grocery store gives double fuel points for gift card purchases, and sometimes they will offer quadruple fuel points. It was during one of these 4x points times that I purchased some cruise line gift cards to apply to my own cruise. What I did not know in advance was that these gift cards are applied as a cruise fare credit, not as a payment. What happens when the cruise fare is reduced with a credit
Yup, the travel agent commission is reduced accordingly. Since this was my own booking, I could live with it. But the lesson learned was simple: be careful about suggesting to clients that they use gift cards or credit card reward points for bookings.
Credit Card Reward Points?
Another travel agent had a recent experience with a client that had been accruing reward points with a cruise line credit card. The client had accrued enough reward points to cover the third and fourth passengers in the stateroom. The travel agent called the cruise line and took the necessary steps to apply the reward points to the client’s booking. Unbeknownst to him his commission was affected. When he got the updated booking confirmations he saw that the cruise fare had been zeroed out, eliminating his commission for those two passengers.
There was nothing he could do about the lost commission, and chalked it up to a learning experience. The question I put to him was this: what would he have done if the client had enough reward points to actually cover all four passengers. If that had happened, his commission would have been completely zeroed out. That was something he had not prepared for. He is now rethinking agency policy when it comes to processing gift payments, or applying credit card reward points.
Not all suppliers are created equally. As demonstrated above some cruise lines will apply gift cards or reward points to the cruise fare as a credit, not as a payment, thus reducing travel agent commissions. Many times the use of gift cards or reward points are “nonrefundable” which negatively impacts your clients, in addition to possibly putting you in a position of working for free. However, there are cruise lines that treat gift cards and reward point redemption as another form of payment on the booking, not as a cruise fare reduction, preserving travel agent commissions.
What’s a Travel Agent to Do?
Before facing this situation, travel agents should consider how they would handle it when it comes up. When I surveyed travel agents I found some had already done this and had decided to implement a fee structure for the processing of gift card payments or credit card reward point redemption.
I would also recommend that you research the cruise lines that you work with the most. When researching, familiarize yourself with the policies of those cruise lines and how they treat gift cards and credit card reward points. Being familiar these policies will help you guide clients as well, educating them about the drawbacks (such as this risk of being nonrefundable).
Susan Schaefer is the owner of Ships ‘N’ Trips Travel located in Tennessee, and specializes in leisure travel with a focus on group travel and charity fundraisers. Through their division Kick Butt Vacations, she focuses on travel for 18 to 23-year-olds. Susan can be reached by email at email@example.com or by phone at (888) 221-1209.