Can a travel provider charge me extra once I’ve paid?

Say you paid $1,499 for a new high-definition TV set last week, took it home, then, today, you got a call from the salesperson saying that the price was actually more than you paid and asking for an additional $200. Sounds crazy? It would be in most consumer markets, but not travel. All too often, travelers face price hikes on trips which they have already reserved and even paid for in full.

One reader’s experience tells such a tale: “I booked a tour and paid for it in March 2006 with a travel agent, and we completed it in April. But the agent called at the end of June to say the tour operator had just notified her that it did not charge us enough—that we owed an additional $324—and the agent wants us to pay that amount. Can they do this?”

As is par for the course in these reports, the answer is an unqualified “maybe.” It all depends on the specifics of the situation—whether the increase was a due to a mistake or a retroactive price hike, what’s in the fine print, and which “they” is responsible. The reader’s letter didn’t include enough specifics for me to provide an answer to his individual question, but it does serve as an introduction to some common pricing problems. Here’s my take.

Online mistakes

You’ve probably read about one of those rare cases where an airfare that was supposed to be, say, $299 mistakenly got loaded into an airline’s website as $2.99, the word got around quickly, and hundreds of people bought tickets at an incredible bargain. As I recall those cases, some airlines honored those tickets for the PR value, while others did not.

This sort of mistake—the equivalent of a typo in a print brochure—is almost entirely confined to online purchasing. And most travel websites I’ve seen lately include a disclaimer that allows the supplier to renege on a price posted “in error” or “by mistake.” So if a supplier can show that a posted price is really a mistake, it can refuse to honor any and all purchases at that price. However, it should also give you, as a buyer, the choice of paying the right price or getting a full, no-fee refund.

As a practical matter, mistakes of this sort should be caught in a matter of minutes or hours, not months. I’d say that if you don’t hear about a mistake of this type by the time you start your trip, much less after you’ve returned, you’re well within your rights to refuse to pay extra.

Clerical errors

To our reader, a more likely explanation is that the tour operator’s booking agent quoted the wrong price to your travel agent—the price for a lower class of hotel than the one where you actually stayed, for example, or the low-season price for a high-season trip. Such an error might well remain undetected until a subsequent audit, months later.

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I can’t speak to the legalities of such a case. But it seems to me that if you weren’t told about the price hike before you took the trip—in fact, early enough to cancel if you decided not to pay the “real” price—you’d be within your rights to refuse to pay extra. After all, you presumably bought the trip in part because you thought it was at a good price, and you might not have bought at the corrected price.

Retroactive hikes

The fine print in some tour and cruise contracts allows tour operators and cruise lines to increase prices retroactively. Price increases prior to the time you’ve paid in full are common; price increases on fully prepaid tours and cruises less so. Federal law allows operators of tours based on charter air service, for example, to increase prices up to 10 percent without your automatic right to cancel and get a refund. Although comparatively few tours use charter air these days, some operators still reserve the right to increase prices under a variety of circumstances.

In this case, the answers reside entirely in the fine print. If the contract says the operator can increase the price, it can; if not, you don’t owe anything.

Who gets stung

As a general rule, the party responsible for a mistake should pay for that mistake. Unfortunately, the travel business doesn’t always work that way.

Take, for example, the case where a tour operator misquotes a rate to a travel agent, who sells the package, in good faith, at the incorrect price. Normally, in such a situation, the tour operator would have to swallow the cost of its own mistake. Unfortunately, however, a tour operator often bills the travel agent, anyhow, telling the agent, in effect, “pay us, then you can either ask your client to pay you or cover it yourself.” Airlines have huge leverage over travel agencies, and they routinely coerce agencies into paying questionable assessments. Tour operators have less leverage, but they, too, can make life miserable for agencies that don’t pay for such billings, however arbitrary they might be.

If our reader is in this situation, he faces an ethical dilemma. In all equity, he shouldn’t have to pay any more. But if he doesn’t pay, the burden will almost certainly fall on his travel agent, who was merely an innocent conduit for the misinformation, not the source. Oh, well, nobody said life was fair.