Legal SA: The CPA: Non-Refundable Deposits & Cancellation Fees (Part 5)

By Atta Legal Advisor in South Africa - Louis Nel:

This is the 5th insert of 8 dealing with the captioned matter – a topic that is regularly entertained by the CPA Commissioner of late

CPA PROVISIONS RE NON-REFUNDABLE DEPOSITS & CANCELLATION FEES – SECTION 17: CONSUMER’S RIGHT TO CANCEL RESERVATION, ADVANCE BOOKING

·                     This section of the CPA is often seen as the sole issue to be considered – as you can see from the previous four inserts, nothing could be further from the truth!

·                     The first aspect to bear in mind is that the consumer is entitled to cancel [Section 17 (2)]

·                     The supplier IS entitled to (a) require reasonable deposit in advance’ (b) ‘impose a reasonable charge for cancellation’ [Section 17 (3)]

·                     Such a charge will be unreasonableif it exceeds a fair amount in the circumstances’– what the latter is, is not clear but the following factors need to be considered may well comprise such ‘circumstances’:

o    Nature of the goods or services

o    Length of cancellation notice given by consumer

o    The ‘reasonable potential’ of the supplier finding an alternative consumer

o    ‘The general practice of the relevant industry’  

·                     The above penalty may not be imposed if ‘the person for whom, or for whose benefit the booking, reservation or order was made’dies or is hospitalized – note it is only the actual pax who gets this benefit & not other members of the travelling party 

 

‘WHAT TO DO’GUIDELINE

 

·                     Do not automatically and categorically refuse any form of refund – make a concerted effort to resell e.g. it may well be argued on behalf of the consumer that a popular destination in peak season can be resold

·                     This is particularly the case if ample notice is given even if your cancellation notice periods are applicable – In such a case you may well qualify that any resale efforts are without prejudice and as a show of goodwill only

·                     Be aware of that you competitors’ T&C are

·                     Make sure that your customer understands that the concession only applies to the passenger who has passed away/been hospitalized and not the entire party

·                     Insist on original documents of proof of death/hospitalization e.g. proof from the hospital and not just a doctor’s note   

 

© ADV. LOUIS NEL

LOUIS-THE-LAWYER

OCTOBER 23 2016