PUnited Expands CC Merchant Transfer Initiative To ConsolidatorsPremium Advisories - ASTA

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United Expands CC Merchant Transfer Initiative To Consolidators

April 16, 2010

While United (UA) has not expanded its credit card transfer initiative to additional retail travel agents, several consolidators have reported that United (UA) has transferred the merchant of record responsibility from United to consolidators with “Net” and “Percent Off” marketing agreements. UA’s “Net” agreement allows an agent to act as a consolidator by allowing the agent to markup the ticket price that is offered to consumers and/or other travel agents. UA’s “Percent Off” agreement allows an agent to collect upfront commissions in certain markets. Affected consolidators that use UA’s merchant agreement to process credit card payments will be assessed a $75 per transaction fee. This action appears to be designed to bring some nonconforming consolidation contracts into UA’s preexisting policy on merchant account usage that has been in place for some time.

The result of this unbundling of credit card costs will likely be a shift in costs to consumers. To cover this additional cost burden, affected consolidators will likely have to: 1) increase fares to; 2) add a credit card surcharge if allowed by the state; or, 3) accept “agency check” only.

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