Finance Dollars & Sense Has your trip been cancelled because of COVID? Here are your rights to a refund
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Has your trip been cancelled because of COVID? Here are your rights to a refund

Normal refund rights are unlikely to apply if a trip is cancelled due to COVID restrictions.
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Your holiday has been cancelled, you’ve asked the provider for a refund, and you’re still waiting for your money back more than a year later.

It’s a common story shared among thousands of Australians whose travel plans have been disrupted due to the pandemic.

Travel-related complaints to the Australian Competition and Consumer Commission increased by 450 per cent in 2020, compared to 2019.

The most common complaints came from:

  • Customers who wanted a refund after their holiday bookings were cancelled due to COVID-19
  • Customers who were fighting cancellation or service fees over cancelled travel bookings.

The New Daily has spoken to dozens of disgruntled travellers, including a couple who spent more than $27,900 on a holiday to Russia that never happened.

Although some providers are offering travel credits to be used at a later date, most customers – especially retirees with limited cash – simply want a full refund.

So, what can you do about it?

Unfortunately, normal legal protections under the consumer guarantee provisions of Australian Consumer Law are unlikely to apply to cancellations caused by government restrictions such as COVID lockdowns.

An ACCC spokesperson said in those situations, it’s likely your right to a refund or other remedy like a travel credit will depend on the terms and conditions of your booking.

“Terms and conditions will vary between travel providers, and in some cases consumers might not be entitled to a full – or any – refund of their booking,” the spokesperson said.

“Some terms and conditions may provide for the ability to re-book, or credit notes, rather than refunds for cancelled bookings.”

Your rights to a refund will differ depending on three scenarios:

  • The company cancels the booking
  • You cancel the booking
  • The booking can’t proceed due to government restrictions.

Your consumer guarantee rights should apply if the company cancels the booking for reasons within its control.

For everything else, closely review your travel company’s terms and conditions.

Look for a ‘force majeure’ clause that covers what happens if the booking cannot go ahead for reasons out of your control and the company’s control.

If you book through a travel agent or another third party, the policies and terms and conditions of both the agent and travel providers will apply, and you will need to check both.

The timing matters

Your right to a full refund may also depend on when you booked your trip, according to University of Melbourne consumer protection professor Jeannie Paterson.

If you made a booking before the coronavirus pandemic hit, and the airline cancelled the flight due to lockdown, then legally you have a right to a refund, Professor Paterson said.

For example, if you made a booking in October 2019 to go to Bali during the 2020 June/July holidays and the airline cancelled the flight due to COVID, then you are legally entitled to a refund.

“A lot of the airlines have been giving credits, but in fact you have the right to ask for your money back, rather than get a credit,” Professor Paterson said.

In other situations, it gets a little more complicated.

What happens if you cancel

For example, if you cancelled your flight due to lockdowns, instead of waiting for the airline to cancel it, then some airlines will blame you for cancelling and therefore refuse to offer a refund or credit.

Professor Paterson said it’s a “really harsh response”, given the pandemic is outside the customer’s control.

But some airlines are doing it anyway.

“Travel insurance generally doesn’t cover COVID lockdowns,” she told TND.

Many tourist operators and accommodation providers will either offer a refund or travel credit if you are unable to travel due to COVID.

Some will offer nothing.

Other situations that make it difficult to claw back money is if you bought internal flights in other countries.

Overseas flights have different rules

For example, if you bought a flight with a Polish airline from Warsaw to Krakow, then Australian protections don’t apply and you might not get a refund.

However, if you booked a flight out of Australia with an international airline, then Australian law applies so you still have a right to a refund, Professor Paterson said.

As for cancellation fees, she said the customer should not be forced to pay them in circumstances where the government intervened and people couldn’t travel.

“If you cancelled really close to the deadline, then you may lose a small amount in terms of cancellation fees, but the general rule is you have a right to get that money back because you couldn’t travel,” Professor Paterson said.

Always read travel operators’ COVID policies before booking.

If there is a dispute, you can contact your local fair trading agency for assistance.

If you believe a travel provider is misrepresenting your right to a refund for cancelled travel, you can report this to the ACCC. 

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