Have you ever wondered why you have to pay for travel in advance and then cannot get your money refunded if your plans suddenly change and you are unable to make the flight? Why are you required to pay for a service not rendered?
When air travel first started, this was not the way. You paid for your flight when you travelled and if something happened, you could take your ticket down the aisle and use it to fly on another airline – they sorted it out behind the scenes.
Today, if you miss a flight, too bad. The airline keeps your money and you are out of luck. But that is just one part of this unfair system. The airlines can overbook and bump you off your prepaid flight and have only recently been required to compensate you.
It is a money grab. The system as it stands today makes millions in interest for airlines between the time you pay and the time they actually deliver the goods. They have your money, and that of thousands of other customers, often for long periods before you actually use the service. Most of us book at least one week ahead to get the best fare and I would say that this fare pricing system has been established to do just that – get you to pay early so that your money will be in their bank, earning them interest or being used to cash flow their operations. In addition, there is all that un-refunded money they keep when you miss your flight or have to change it. This must provide another nice little nest egg.
Recently some hotels have begun a similar practice: asking for a “deposit” when you check in which they refund when you leave. They will claim this is a damage deposit or perhaps a deterrent to keep you from skipping the bill, which defies logic when you consider that they demand your credit card upon check in. Once again, it is about that margin to be earned on your money between the time you check in and the time you leave. This may seem insignificant on a single booking but consider that hotel chains sell thousands of rooms and if everyone demands a “deposit” of $100, the return can add up fairly quickly.
Over the past few years, the ball has been dropped on consumer protection. Governments seem to view this as an afterthought, if they think of it at all. And it is getting harder and harder to complain. It is very unsatisfying and often unproductive to talk to a computer. Not only that, but the true force of the customer’s dissatisfaction is never really felt and therefore never addressed.
There is a lot of talk about disproportionate wealth accruing to corporate princes. The above unfairness in the marketplace is just one of the reasons why.