At this time of the COVID-19 crisis travel bans and restrictions on gatherings has resulted in a flood of cancellations within the travel, entertainment and tourism industry.

This has caused widespread confusion about the rights and responsibilities of affected parties in relation to claims for refunds, says Consumer Goods & Services Ombudsman (CGSO), Magauta Mphahlele.

“While it is the view of the CGSO, based on its interpretation of the spirit and intent of the Consumer Protection Act (CPA), that consumers have a right to a full refund in these circumstances – if a postponement is possible, we urge consumers to rather take this option rather than request a refund to minimise the impact on suppliers who are also not at fault,” said Mphahlele.

It is clear that suppliers cannot impose a postponement on a consumer without the option of a refund. It is important for both consumers and suppliers to be reasonable and a supplier cannot just have a blanket policy of no refunds

Section 17 of the CPA deals with consumers’ rights to cancel bookings and reservations. In this section suppliers can charge a reservation deposit and a reasonable cancellation fee should a consumer cancel prematurely.

However section 17(5) provides that:

“17 (5) A supplier may not impose any cancellation fee in respect of a booking, reservation or order if the consumer is unable to honour the booking, reservation or order because of the death or hospitalisation of the person for whom, or for whose benefit the booking, reservation or order was made”.

Section 47(3) provides that:

(3) If a supplier makes a commitment or accepts a reservation to supply goods or services on a specified date or at a specified time and, on the date and at the time contemplated in the commitment or reservation, fails because of insufficient stock or capacity to supply those goods or services, or similar or comparable goods or services of the same or better quality, class or nature, the supplier must—

(a) refund to the consumer the amount, if any, paid in respect of that commitment or reservation, together with interest at the prescribed rate from the date on which the amount was paid until the date of reimbursement; and

(b) in addition, compensate the consumer for costs directly incidental to the supplier’s breach of the contract, except to the extent that subsection (5) provides otherwise.

The above section entitles the consumer to two types of recourse if the supplier is at fault, a full refund with interest plus compensation for direct incidental costs.

It seems that in the current circumstances which are not within our scope of reference as a society we are called on to apply a reasonableness standard which balances the needs of consumers as well as suppliers. It can be accepted that, in contrast to the norm, neither party is at fault.  

It may be necessary to approach the ombudsman to resolve disputes between suppliers and consumers if a reasonable solution for both parties cannot be negotiated.

Author: Brenda Munro

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