Debit Memos

» Posted by on Aug 7, 2011 in Airlines | 1 comment

My supervisor calls me the debit memo queen.  This is because I believe in staying on top of debit memo’s as they are received and believe it or not I actually enjoy the task.  I began working with debit memos for the purpose of assisting account managers with timely resolution and to keep the total amount of outstanding memos to a minimum.  Before I began working with debit memos our ARC team would forward all of those incoming to the proper account manager as they were received.  Due to the vast responsibilities of the managers such as ensuring 100% customer satisfaction, keeping staffing properly balanced, providing guidance to agents, and being on the front line in regards to ticketing procedures memo’s easily became a burden for them.  Dealing with debit memos is certainly not enjoyable for anyone involved, however unfortunately they remain an issue for all TMC’s.

The following is a detailed list of reasons that airlines may issue debit memos to the TMC or booking agency. Churning/double booking which may include excessive bookings, fictitious names, or segment violations.  Commission recall which may include commission not valid on fare, tickets refunded in error, credit card transaction rejected by passenger, incorrect/expired contract number, and credit memos. Exchange errors which may include miscalculations, nonrefundable exchanged for refundable, uncollected penalty, wrong coupon numbers, expired fares, missed ticketing deadline and improper reporting. Form of payment errors which may include credit card transactions have been rejected by passenger, invalid form of payment for government fare, and missing approval code. Missing data or documentation may include endorsement box missing information, tour code and ticket designator errors, and incorrect or expired contract numbers being used. Refund errors which may include tickets refunded improperly, duplicate ticketing errors, non-refundable errors, uncollected penalty, over refunds, and wrong coupon numbers used. Tax violation errors such as validating carrier and under collection violations.  Ticketing errors which may include endorsement errors, fare exceeded contract rate, fare rule violation, incorrect/expired contract number, invalid fare basis, missed ticketing deadline, under collected fare, unreported sales, validating carrier violation,  and improper reporting.  To define a debit memo in the simplest form is to say that airlines may issue debit memo’s for failure to follow ticketing rules or when errors occur during ticketing and/or booking.  The majority of memo’s on hand for the TMC in which I am employed are due to ticketing errors, refund errors and churning.

The best way to deal with debit memo’s is naturally to prevent them. This means that agents must be properly trained to understand the booking and ticketing process.  Also, understanding how to pull up and read the rules of the fare at the time of booking and/or ticketing is becoming increasingly important for everyone involved, especially the agent as they risk having to pay the error.  Fare rules are becoming more and more complex and airlines are issuing more debit memo’s to increase their revenue.  Even though there are tools in place such as auto price many errors are related to exchanges and refunds. Therefore, it is a constant need for the TMC to learn, understand and continually train employees who make reservations as rules change.  Unfortunately, the airlines are not always right and we the TMC will therefore fight the debit memo by disputing the reason for issuance with the airline and/or GDS. This process that requires the TMC to prove the fault is not their own not only takes extra time for the TMC involved, it also requires waiting on the airline to respond to the dispute.  Most of the time the airline does not respond to the dispute and the TMC must literally beg for an answer.

If I could change two areas in the way that airlines go about issuing debit memo’s it would be the following. First, a more timely response from airlines regarding issuance and dispute responses is greatly needed.  The time lapse from the original booking/ticketing date in which the error has occurred to the time that the TMC actually receives the debit memo can be anywhere from 3 to 12 months.  This is entirely too long of a waiting period! If airlines must issue memo’s I don’t think it is asking too much that they go about it in a more timely manner, however they somehow get away with this and seem to continue to have the upper hand in the matter.  Somehow airlines need to be held more accountable in this area.  The GDS only holds reservation information for approximately 3 months.  Therefore, memo’s received more than 3 months after the error has occurred cannot be researched without a PDR (Past Dated Record). The PDR must be requested from the GDS provider and can take up to 3 weeks or longer to receive depending on the GDS. If the item is to be disputed most airlines require that the dispute be submitted within a month after the issue date so one can see that this is a very close time restraint. This long time lapse also makes it very difficult when the client must be involved as the client must also research their records and may become easily and unnecessarily frustrated with the TMC. Second, there needs to be better communication between the airline(s) and the GDS providers.  Debit memo’s that are issued as a result of an over refund to the client are often based on the airlines status of coupons or segments.  After the flight has been taken by the passenger the airline many times does not properly update the coupon status and a used coupon will therefore show as “open for use” in the GDS system which is to be properly updated by the airline.  This “open for use” status results in a refund to the client which is not due.  We the TMC will dispute these types of debit memo’s with the airline stating that “the coupon status showed as open for use resulting in an over refund”.  The airline will say that they notified the GDS provider who then says that the airline did not notify them.  The TMC is ultimately caught in the middle.  As a result of this miscommunication between the airlines and GDS the TMC becomes involved and must correct the error as the money is indeed owed to the airline.

Airlines clearly have the upper hand when it comes to debit memo’s.  They issue them way too late and then many times they are the result of the airline or GDS not communicating correctly.  The TMC then may become involved unnecessarily.  The TMC however must correct the error in order to maintain a positive working relationship with the airline and ARC.  Finally even though the TMC or client may not be at fault the airline still gets their money plus an administration fee of anywhere from $25.00 to $50.00.  The industry could certainly use some improvement in this area.

By Michelle Prince


1 Comment

  1. To whom it may concern.

    We received debit memo for tickets without endorsement, this debit subjected to dispute it because my reason is that the endorsement is not the responsibility of the agent who issued the ticket, nor is the GDS, because the endorsement appears automatically as long as the airline has filed this restriction through ATPCO, otherwise if they forgot the debit is not valid.
    But the airlines don’t accept my answer.

    Could help to clarify whether I’m right or my answer is wrong.

    Thanks in advance for your help.


    Elizabeth Castillo
    ARC Audit, Travel Dept.

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