In an explosive revelation, Outpayce’s latest comprehensive study has painted an alarming picture for the travel industry: a staggering year-on-year increase in chargebacks. The escalation, driven primarily by challenges in obtaining refunds and rising awareness of chargebacks among travellers, is a severe concern for airlines and travel agents globally.

Frequent travellers, weary of complicated refund procedures, have found the chargeback process, facilitated by a mere mobile banking application, a more straightforward recourse. As per Outpayce’s in-depth study involving travel companies around the globe, this ease of initiating chargebacks has spearheaded an alarming 30% year-on-year surge.

Delving into the reasons behind this rampant growth, the study identified several driving factors. 62% of travel companies cited travellers’ preference for chargebacks over refunds, while 56% attributed it to the increased awareness about the chargeback process among travellers. The ease of filing a chargeback through mobile banking apps was indicated as a significant driver by 42% of the companies.

The research conducted by Outpayce, a reputable company under Amadeus’s banner, also highlighted the uphill battle that travel companies face when contesting these chargebacks. The figures are staggering; less than one-fourth of these companies achieve a success rate of over 60% when they challenge the chargebacks. Additionally, nearly half of the firms reported that less than 40% of the chargebacks they opt to contest fall in their favour.

Tania Platt, Senior Vice President, Commercial, Outpayce, reflected on the significant burden on travel companies to manage the avalanche of disputes. According to Platt, companies face daunting hurdles, from investing in skilled resources to collecting pertinent travel and payment information to contest chargebacks. “Our research shows travel companies are finding it hard to handle the volume of disputes they’re seeing,” she acknowledged.

Platt emphasized the industry’s potential to rethink its chargeback management approach, advocating for a more streamlined system. She highlighted the crucial challenge of timely information collation to dispute unfounded chargebacks effectively.

Evidence suggests that quick access to key information, such as proof of payment authorization and proof of the passenger’s journey, would significantly enhance a firm’s efficiency in managing chargebacks. A resounding 67% of respondents echoed this sentiment.

In the face of such unprecedented circumstances, Outpayce has committed to solving this problem, signalling a beacon of hope for the beleaguered travel industry. You can download the full report here to gain deeper insights into the travel industry’s predicament.

The Outpayce study is a critical reminder of the escalating pressures on the global travel industry. It underscores the urgent need for innovative solutions and collaborative efforts to tackle the chargeback phenomenon head-on. As the world grapples with the aftermath of the COVID-19 pandemic, the call for a robust, streamlined, and efficient dispute-resolution process has never been more crucial.

Written by: Jill Walsh

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