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They Will Keep Your Deposit

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21 hours ago, John Bull said:

Gotta say it - to me it seems pretty pointless to take a deposit if it's refundable at the whim of the customer :classic_huh:

 

JB :classic_smile:

 

 

But this is very common in the US.   
 

If I special order a car, I have to put down a deposit.  However, by law, I do not have to actually buy the car, and the dealer has to refund the deposit.

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2 hours ago, CPT Trips said:


Why would any consumer want to pay a company for a good or service that is never delivered? Sure it’s great for their bottom line, so I can understand a company’s PR department making that argument, but a customer?

If a customer cancels a trip well before the the actual trip the company has not delivered any product to the customer. The company has not incurred any cost and has given up nothing in exchange for keeping a deposit after having OPM (other people’s money) for a time.

To me the value of retaining the right to go ahead with a purchase or to cancel a trip, at no cost, three or four months before the trip is actually delivered is nothing. It seems the company also agrees to this valuation because will pay me absolutely zilch if they cancel the trip with even less notice. 

 

One reason is, you can see threads here on CC about people booking 2 or more, even up to and over 10 cruises around the same time frame, then cancelling all but one on the last day before Final Payment.

 

This leaves the cruise line with a bunch of cabins to sell on a short notice, which they typically have to discount to do so.  So the cruise line has lost money.

 

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43 minutes ago, SRF said:

 

One reason is, you can see threads here on CC about people booking 2 or more, even up to and over 10 cruises around the same time frame, then cancelling all but one on the last day before Final Payment.

 

This leaves the cruise line with a bunch of cabins to sell on a short notice, which they typically have to discount to do so.  So the cruise line has lost money.

 

 

 

I have to admit that we've jumped onto the same bandwagon on road-trips in the States.

Months in advance, when prices are low and the choices wide, we've booked hotels for multiple nights because we didn't know precisely when we'd be in the area. Then - at no cost to ourselves -  a few days out we'd cancel all except the night/s which turned out to be suitable.

Worked beautifully for us, but we added to the potential for empty rooms.

Needless to say we didn't have the heart (and didn't want the embarrassment) of doing that to family hotels, we did it just at chain hotels whose staff didn't worry - and mebbe didn't even know.

 

The flip side is that for locations where we've needed to book just a few days out, the very limited choice was doubtless due in part to other folks' reservations which were subsequently cancelled.

 

I can see the pros for the customer - and the cons for the supplier.

And it just doesn't feel right to be so cavalier about bookings.

 

But more and more I'm seeing twin pricing for accommodation world-wide including the US - a discount for choosing to book without cancellation rights. 

And from what I read on Cruise Critic that now includes cruises.

 

JB :classic_smile:

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6 hours ago, navybankerteacher said:

The simple fact that you want to be able to put down a deposit to reserve a space on the cruise gives it value.  You WANT it, therefore it has value to you.  As long as you hold the reservation for that space the company is without the right to sell it to someone else, so they have lost that right - ie: given that value to you.  

 

The notion of that value becomes even more clear if, because of demand, the price goes up (which is certainly a possibility) —simply  protecting yourself against a fare increase is a value to you.

 

Sure:  you want to get something for nothing - and you should try to understand the cruise line’s reluctance to give up that something for nothing.

 

In financial services comparable transactions take place all the time:  options to purchase a security are bought and sold regularly — those options represent value — whether or not they are ever exercised — similarly your option to purchase a cruise at a stated price has value — whether or not you exercise it.

 

 


I want a cruise enough to pay X dollars for it. I am willing to pay a refundable deposit now in order to pay for and take the cruise at a later date. That isn’t the same as wanting to pay .2X for it today with no chance of getting any of that back if I don’t cruise and then pay the remaining .8X for it later.

 

Financial market stock or commodity options are a unique set of products that are speculative, generally carry considerable risk, and have income tax implications. They are not available to the general public, individual participants are subject to significant industry requirements, and the market is heavily regulated by the government. None of that applies to buying a cruise. There really isn’t any comparison. 

 

4 hours ago, SRF said:

 

One reason is, you can see threads here on CC about people booking 2 or more, even up to and over 10 cruises around the same time frame, then cancelling all but one on the last day before Final Payment.

 

This leaves the cruise line with a bunch of cabins to sell on a short notice, which they typically have to discount to do so.  So the cruise line has lost money.

 


Yes, there are threads about that. But I suspect that situation is relatively infrequent in the overall cruise market. Certainly the cruise line doesn’t like this to happen at all. None of us really know how many cabins return to inventory on those last days before final payment. The cruise industry continues to stay profitable and is expanding, so things can’t be that bad.
 

 

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w I think our good friend, JB, has it right.  In the past few years we have seen a major change in booking options.  Nearly every hotel/motel offers two prices.....a lower price for those who are willing to book a non-cancelable reservation and a higher price where you keep your ability to cancel without penalty.  We have even seen some hotels offering a third option which is allowing cancellations up to 3 days (sometimes it might be 4 days) with no penalty....but this will cost somewhat more then a non-cancelable reservations.  This kind of policy has also become relatively common with many European hotels.

 

These options make a lot of sense.  Folks can either choose to save money or pay more to keep their cancellation options.  Cruise lines would like to move to a similar model but have the problem of what they would then do to fill unsold berths.  Celebrity has tried to play the game where their CEO said there would not be the great deals for last minute bookers.  However, they quickly moved away from that policy, which we predicted when the policy was announced, because they do not wait to sail with empty berths.  An empty berth equals "opportunity lost revenue" which is money lost forever.  Cruise line executives can talk a good game, but they also need to fill those empty berths.

 

Hank

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We recently cancelled a cruise to Alaska that sails in September.  We lost the entire deposit amount we placed with RCCL.  They won't allow us to use the funds on a future cruise as well.  You can betcha, I will ask this question and get a very clear answer, before we give any line our hard earned money.  I understand the point of business is business, but you would think they could have let us use it on a future sailing, as a  one time goodwill gesture.  The representative said I could use it towards a future cruise, but our travel agent said, that was not correct.  So there you go.  Information shared out, is not always correct.  The agent had no reason to advise differently, as it was his loss of commission.  Oh well, live and learn.

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8 hours ago, CPT Trips said:

Yes, there are threads about that. But I suspect that situation is relatively infrequent in the overall cruise market. Certainly the cruise line doesn’t like this to happen at all. None of us really know how many cabins return to inventory on those last days before final payment. The cruise industry continues to stay profitable and is expanding, so things can’t be that bad.

 

RCI found it prevalent enough with suites, that all full suites are non-refundable deposit now.  No choice.

 

And strangely, availability to book suites has gotten better.

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46 minutes ago, Derbie said:

We recently cancelled a cruise to Alaska that sails in September.  We lost the entire deposit amount we placed with RCCL.  They won't allow us to use the funds on a future cruise as well.  You can betcha, I will ask this question and get a very clear answer, before we give any line our hard earned money.  I understand the point of business is business, but you would think they could have let us use it on a future sailing, as a  one time goodwill gesture.  The representative said I could use it towards a future cruise, but our travel agent said, that was not correct.  So there you go.  Information shared out, is not always correct.  The agent had no reason to advise differently, as it was his loss of commission.  Oh well, live and learn.

 

RCI non-refundable deposits, only $100 per person is not refunded in any way.  Any deposit over $100 per person is issued as a Future Cruise Credit, that must be applied to a future cruise (not as a deposit) within one year of the FCC being issued.

 

So, unless you had a reduced deposit of $100 per person (possible in some instances), some part of your deposit should be refunded as FCC.

 

I question what your travel agent is doing/saying.

 

A good travel agent could have gotten your deposit transferred to a different cruise, with you only having to pay the $100 per person portion.  I did with with a cruise we had booked for July 2020, and moved to September 2020.   

 

But it had to done to a specific cruise, not some credit for some cruise.

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8 hours ago, Hlitner said:

These options make a lot of sense.  Folks can either choose to save money or pay more to keep their cancellation options.  Cruise lines would like to move to a similar model but have the problem of what they would then do to fill unsold berths. 

 

Airlines do this all the time.


You have the absolute lowest fare, which allows no refund and possibly no transfer to another flight.  For more, you can transfer for a fee.  For more, you can transfer for free.  For even more, you can cancel and get a full refund.  YOUR choice.

 

 

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It is simply silly for someone to think that a reservation that he wants has no value to the cruise line.  If he wants it, he has put value on it.  The fact that many lines will offer two prices for the same reservation proves the point:  the higher price gives the prospective cruiser the right to cancel and get a refund of his deposit;  the lower price requires a non-refundable deposit — the difference between the two represents the value of the right to cancel.

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On 1/17/2020 at 1:27 PM, CPT Trips said:


...

To me the value of retaining the right to go ahead with a purchase or to cancel a trip, at no cost, three or four months before the trip is actually delivered is nothing. 

...


 

Right here is your problem: if you say the value of retaining a right at no cost is nothing,  why would you want it?   The fact is that you do want it — that means you do put some value on it — and yet you still think the company should give it to you for nothing.

 

Lines which do let people make reservations without risking their deposit are effectively giving away something with no value to the line - and similarly no value to their customers, because it is obvious that they could most likely come back a couple of months before sailing for the same deal - in which case there is no point in tying up deposit money in the first place.

 

Sure, NCL and others- probably Carnival and Royal Caribbean will frequently give you that option - but they will also offer discounted deals (which do have value) for non-refundable deposits: those are the only reservations which do have real value.

 

 

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