After the Foreign and Commonwealth Office (FCO) advised UK residents against ‘all but essential travel’ back in March 2020, thousands of Brits turned to their tour operators and travel agents to seek a refund.

However, many were told by their travel firm that they were unable to provide them with a cash refund. Instead, some providers offered customers the option to either rebook their holiday for a later date – or accept a refund credit note.

With concerns over when travel may again resume, many Brits opted for the latter choice and accepted a refund credit note. However, only after accepting did many people begin to question whether their money would be safe, should their tour operator go into administration.

ABTA and many consumer groups then started campaigning for the refund credit notes to have the same protection as package holidays, so that customers wouldn’t be left out of pocket if their tour operator went bust before they were able to rebook their trip.

Here we explain exactly what a refund credit note is and what this means for those who have accepted them.


What is a Refund Credit Note?

A refund credit note or RCN is a form of voucher that has been offered to customers, instead of providing a cash refund. An RCN entitles customers to rebook a holiday at a future date or receive a cash refund up until the expiry date of the note.

The Department for Transport confirmed earlier this month that any refund credit notes issued for a package holiday between March 10, 2020, and September 30, 2020, will continue to be protected until September 30, 2021. This means that should anything happen to the tour operator between now and September next year, the customer would not be left out of pocket.

The Civil Aviation Authority (CAA) then announced in January 2021 that it will extend ATOL protection for any new Refund Credit Notes (RCNs) issued up until March 31, 2021.

So, anyone who has been offered a voucher by an airline before March 31, 2021, should continue to be protected until September 30, 2021.


Do I have to accept a Refund Credit Note?

To put it simply, no. Customers have different rights depending on how they booked their holiday. For example:

Package Holidays

Those who booked a package holiday, and had their holiday cancelled by the tour operator, are legally entitled to a full cash refund within 14 days under the Package Travel Regulations Act.

Flight only

Those who had their flight cancelled by the airline are entitled to a refund Under EU Law. However, most airlines have their own refund timescales at the moment due to the sheer volume of flights that have been cancelled.


How long is the Refund Credit Note protection in place?

Any refund credit note issued between March 10, 2020, and March 31, 2021, for a package holiday will remain protected under the ATOL scheme until September 30, 2021. The Civil Aviation Authority (CAA) has also confirmed that any ATOL protected flight RCN’s will also continue to be protected until September 30, 2021.


What about travel insurance? Can I claim for cancellation on my policy?

In order to make a claim on a travel insurance policy for a refund due to cancellation, customers will need confirmation from their travel provider or tour operator that they are unable to get a refund or credit note from them.

The reason a travel insurer may ask for confirmation that these costs are not recoverable is that travel insurance policies are designed to put customers back in the same financial position as they were before a loss. Therefore, if a customer is able to move their holiday, or attain a credit note to book their trip at a later date, there is nothing to claim back.

Of course, customers who are unable to recover lost costs, and have the right cover under their travel insurance policy, would be able to submit a claim for consideration.


What if my holiday and/or flight isn’t cancelled, but I decide I don’t want to travel?

Unfortunately, customers who choose not to travel would normally forfeit the refund owed to them by tour operators.

They would also not be covered to submit a claim to their travel insurance, as this would be classed as ‘disinclination to travel’. However, it is worth knowing that most travel insurers are allowing customers to change their dates for single trip policies, if they are able to move their holiday to a later date.

Therefore, we would recommend that those who do not wish to travel contact their tour operator or airline to see if they are able to move their holiday to a later date in the first instance as, in most cases, tour operators are not charging admin fees to delay or move trip dates.