Trip.com fined 10 million won for issuing airline vouchers instead of cash refunds

Trip.com has been sanctioned by the Korea Fair Trade Commission after it was found to have issued more than 3 billion won in airline ticket refunds as airline vouchers rather than cash.

The Fair Trade Commission said Sunday it decided to issue corrective and reporting orders against Trip.com Travel Singapore Pte. Ltd. and Trip.com Korea for violations of the Electronic Commerce Act, and to impose a fine of 10 million won ($6,650).

According to the Fair Trade Commission, Trip.com Singapore and Trip.com Korea jointly operated a domestic website and, from February 2020 through July last year, provided refunds worth approximately 3.155 billion won ($2.1 million) as airline vouchers — rather than returning funds through the original payment method — across 13,010 canceled airline ticket purchases.

The investigation found that some low-cost carriers, including VietJet Air, Peach Aviation and Philippines AirAsia, had policies of issuing refunds as vouchers upon cancellation, and that Trip.com had simply applied those policies as-is.

The Fair Trade Commission determined that the practice violated the Electronic Commerce Act, which requires that refunds for canceled airline tickets be returned through the same payment method the consumer originally used, such as a credit card.

The commission said that even if a company follows an airline's own refund policy, doing so still constitutes a legal violation if that policy is less favorable to consumers than the rights guaranteed under the Electronic Commerce Act.

In addition, the two companies were found to have affected consumers' right to cancel purchases by informing them during the cancellation process that refunds could only be issued as airline vouchers under airline policy.

Separately, Trip.com Singapore sold and provided airline ticket booking services to domestic consumers from November 2017 through September last year without registering as a mail-order business. Trip.com Korea did the same from April 2020 through January last year.

The two companies completed their mail-order business registrations in September and January last year, respectively.

They also repaid consumers in cash to remedy the harm caused by the voucher refunds, and stopped selling tickets for airlines that only offer voucher refunds after July last year.

The Fair Trade Commission said it plans to continue monitoring whether online travel platforms and other platform operators are properly upholding consumers' right to cancel purchases and complying with relevant regulations.