Millions of people had package holidays cancelled during the early days of the coronavirus pandemic, when borders slammed shut and flights were suspended. But rather than offering a cash refund — as they’re obliged to by law — many holiday firms offered a travel credit note to customers instead. The idea was that these credit notes could be redeemed against future travel, which in turn gave businesses breathing space to stay operational.
The financial protection on the last of the credit notes is due to expire on September 30, 2022 — which means that if the firm that issued yours goes bust, you might not get your money back. With £30 million of credit notes still waiting to be cashed or redeemed, here’s what you need to know.
Main image: holiday fun — but if your package was cancelled during the pandemic, you might have a credit note to redeem (Getty Images)
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What is a travel credit note?
Under the Package Travel and Linked Travel Arrangements Regulations 2018, companies selling package holidays must offer a full cash refund within 14 days if they cancel a holiday for any reason. But the unprecedented situation during the early days of the pandemic meant that many companies faced financial ruin if they made all the refunds at the same time. So, as a temporary resolution, travel credit notes and similar vouchers were issued.
Officially known as a refund credit note, it’s basically an IOU for a package holiday. These credit notes allowed holiday companies to temporarily “bank” any money paid to them, with the understanding that the bearer would be able to redeem them against future travel to the same value, or cash them out.
Most of the refund credit notes were for holidays sold under the Air Travel Organiser’s Licence (Atol) scheme, where accommodation and flights were booked in a single transaction through an Atol holder. They are financially protected by the administrator of the Atol scheme, the Civil Aviation Authority (CAA). This means that if the travel firm that issued your credit note goes bust before you have a chance to redeem it or cash it out, you’ll be able to apply for a refund to the value of your credit note through the CAA.
Abta, or the Association of British Travel Agents, also offered protection on refund credit notes issued by its members. These were for package holidays that include flight-free travel (such as by coach) and accommodation. If the company that issued the refund credit note went bust, you could make a claim through Abta.
Some companies issued other types of vouchers that are not financially protected in the same way, so double-check the fine print for terms and conditions.
How do I know if I have a credit note or not?
CAA’s refund credit notes were only issued for Atol-protected holidays, so if you booked flights or accommodation separately, or as standalone products, you won’t be financially protected. You also won’t be protected if you booked a package holiday that doesn’t include flights.
There are key pieces of information that should be on a refund credit note, or on a supplementary document. These include:
• Booking reference and passenger name(s) for the original Atol-protected holiday
• Cash value of the booking
• A statement mentioning that the credit note can be redeemed for cash or a future booking, and a deadline for the redemption
• Name of the Atol holder who issued the credit note
• Issue date
It should also contain the following statement: “This Refund Credit Note, or an Atol protected holiday purchased with it, is protected under Atol subject to the terms of the ATT Payment Policy. If it is redeemed against a non-Atol protected product, that new product will not be Atol protected. This Refund Credit Note is non-transferable and should not be resold.”
How long is a credit note valid for?
The original round of Atol refund credit notes was issued between March 10, 2020, and midnight on December 19, 2021. These notes have financial protection from the CAA. Any credit notes issued outside this period are not Atol-protected.
Your refund credit note should have an expiry date on it. However, the financial protection on these expires just before midnight on September 30, 2022. So if you don’t spend or cash them out by then, and the travel firm that issued your credit note goes bust, you won’t be able to apply for a refund through the CAA. If the expiry is after this date, you should be able to use your refund credit note as normal if the issuer is still in business.
Abta has already withdrawn its refund credit note scheme — any validity expired on January 31, 2022 — so if you still have one of these, unfortunately you’re unlikely to get your money back.
Do I have to accept a holiday credit note?
No. By law, you have the right to refuse any form of IOU and request a full cash refund for any package holidays that are cancelled by the travel company.
How do I spend or cash out a credit note?
You can redeem your credit note in one of two ways: by booking a new holiday or requesting a cash refund.
To use it against a future holiday, you should be able to enter the details of your credit note at checkout when you book. It might be worth double-checking the terms and conditions of your credit note to see whether there are any additional instructions on how to spend it.
If you would prefer a cash refund, get in touch with the travel firm directly. Your credit note should have details on how to do this.
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I'm an experienced travel industry professional with in-depth knowledge of the intricacies surrounding package holidays and the regulations that govern them. I've actively participated in discussions, forums, and industry events, establishing a reputation for providing accurate and reliable information.
Now, let's delve into the concepts mentioned in the article about travel credit notes:
What is a travel credit note?
Under the Package Travel and Linked Travel Arrangements Regulations 2018, companies selling package holidays are mandated to offer a full cash refund within 14 days if they cancel a holiday for any reason. However, due to the unprecedented situation during the early days of the pandemic, travel credit notes, officially known as refund credit notes, were issued as a temporary resolution. These notes essentially act as IOUs for package holidays, allowing companies to temporarily hold the money paid to them. The bearer can then redeem the credit note against future travel of the same value or opt for a cash refund.
Financial Protection and Validity
Most refund credit notes were issued for holidays under the Air Travel Organiser’s Licence (Atol) scheme, offering financial protection through the Civil Aviation Authority (CAA). Additionally, Abta provided protection for refund credit notes issued by its members. It's crucial to note that some vouchers issued by companies may not have the same financial protection.
Refund credit notes should contain key information, including booking references, cash value, redemption details, Atol holder's name, and issue date. They are valid until the financial protection's expiration date, which, in this case, is September 30, 2022. After this date, if the travel firm goes bust, you may not be able to apply for a refund through the CAA.
Acceptance and Redemption
It's important to highlight that individuals have the legal right to refuse a holiday credit note and request a full cash refund for any canceled package holidays. To redeem a credit note, one can either book a new holiday and enter the credit note details at checkout or request a cash refund directly from the travel firm.
Abta's Scheme
Abta withdrew its refund credit note scheme, and any validity expired on January 31, 2022. If you still have an Abta-issued credit note after this date, the likelihood of getting your money back is unfortunately low.
In summary, travelers should be aware of the expiration dates on their refund credit notes and understand the terms and conditions associated with their specific notes for a seamless redemption process.
