Travel Agent Merchant Services

Running a travel agency is a risky business in today’s world. All merchant processing companies consider these companies to be high risk, especially for charge backs because people purchasing costly trips may have to cancel their vacation plans at the last minute due to illness or accident and though your company may have a firm cancellation policy, this will not stop customers from contacting their credit card company and demanding a refund. Credit card companies side with their customers in many cases, so you will be left to pay the costly charge back fees. In today’s busy market, charge back fees of $40 each occurrence is not surprising. Not only will you miss out on the money for your booking, but you also eat an additional $40 in charge back penalties.

Agency Types

Travel companies range from car rental companies to agencies to airlines. Cruise companies, hotels/motels/resorts, and time-shares are other common companies related to this industry. If you are running this kind of company, you will find that processing credit card transactions can become costly because of the higher risk for cancellations and transaction losses. The more clients you have that go ahead and make last minute credit card cancellations the more charge backs you will incur. As you build up a high number of charge backs, you run the risk of becoming a bad credit risk and your merchant processing account can be cancelled. If this happens, you lose the option of accepting credit card transactions and this will cause a tremendous loss of business.

Accept Major Credit Cards

American Express, Discover, MasterCard, and Visa are accepted world wide, but for any retailer to accept them, the company must have a merchant processing account. The way the system works is that you take a customer’s credit card and run the charge through the system via either an online form or a magnetic card swipe. The charge information then goes to the credit card issuer that sends money to the merchant processing company you have selected. They send you payment after it clears their system and charge you the fees required for using their service.


If a customer then cancels the charge, you must pay the credit card company back that money. No company wants to lose out on the fees, so it is imperative to have a solid cancellation policy that covers your loss of fees. If you have a signed copy stating the customer is aware of the non-refundable payment or fees and then denies the charge via their credit card, you have proof that they were aware of the cancellation policy. With this information, you may well stand a chance at avoiding the charge back fees. If you do open a related business, make sure you have a solid plan of attack for cancellations and refunds.

If you open a business of this nature, make sure that you are willing to work hard. Many of today’s travelers prefer to make their own reservations online, so having the availability to do this from your website might draw in more business. For walk-in agencies, clients are far more likely to go in for big-ticket purchases like weeklong hotel, airfare, and tour packages. Cruises are also booked frequently in actual offices. Fees charged by airlines make it hard to make any money off airline reservations nowadays, so it is important to have a specialty if you plan to run this kind of company. There is lots of money to be made, but it will take foresight and hard work to be competitive and find a niche needed in your community or online.

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