United Credit Card Policy Grounded for the Short Haul
Thanks in large part to Congress’ attention, United Airlines has delayed its deadline to cut 28 travel agencies off its credit card merchant account. Sure, the airline felt the pressure from associations to knock it off, but the signed letter from 13 elected politicians no doubt was the final piece of baggage thrown onto this cart.
Rep. Michael Arcuri (D-N.Y.) told the press in a teleconference earlier this week that he’s not buying United’s argument that this was a cost-saving initiative limited in scope, because the savings would be too small to be worth the effort. When the numbers don’t add up, suspicion swoops in.
And lawmakers were quick to warn United that it really wants to fly right when it comes to the Fair Credit Billing Act.
But that’s not to say the issue is resolved. United has only gone as far as to say these agencies on the chopping block — one allegedly directs $500,000 in ticket sales to UA every year — may ask for a 60-day extension to get their affairs in order. The company continues to swear this is not a pilot program in a more sinister plan to eliminate travel agents from its business plan.
“Finally, this action neither violates nor undermines the Fair Credit Billing Act,” Jeff Foland, United’s senior vice president of worldwide sales and distribution, wrote in a press release. “There will be no difference in how credit card disputes will be handled from a customer’s perspective. Customers who charge their tickets with travel agents will have the same rights they have always had, including the right to dispute charges to their card issuer for non-performed services. This is the case when the impacted travel agents use United’s merchant account; it will continue to be the case when the impacted agents use their own merchant accounts.”
The trouble is, the new policy doesn’t break the ARC sales terms, either, as some industry pundits thought early on, officials at the technology solutions company are saying.
So it’s shaping up to become more a battle of wills: can the travel industry kick up enough dust to get United to slink away from this notion or will an airline desperate for cash damn the brownie points and forge ahead with any penny-saving measure it finds? I’m in agreement with Kevin Mitchell, chairman of the Business Travel Coalition, who is fond these days of bringing up the backlash Northwest Airlines dealt with when it tried to slap a $7.50 surcharge on any tickets the public buys through an agent. Obviously, that went over like a lead balloon in 2004, and according to Mitchell, it took months to rebuild the business that stunt cost the airline.
Today, NW has been eaten by Delta Airlines. Just sayin’.
Photography: stevendamron, marceatsworld
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