In India, cancelling a ticket online and getting a refund back to a credit card or bank account is a lengthy process.
The majority of these delays are due to the bank processing times - they can take anywhere between two to six business days to pass the money back into customer's account, says Cleartrip.
Indian online travel agents have been constantly rolling out new features to minimize this refund-credit duration. For example, early this year, goibibo launched a service by name goCash, a digital wallet that allows users to store their cancelled ticket's money for bookings in the future.
Senior vice president for flights at MakeMyTrip, Ranjeet Oak, says:
"To enable refund on flight cancellations and modifications, MakeMyTrip not only offers travellers refund choices but also provides an option of digital wallet - MyWallet. This is valid on both international and domestic flights.
"While cancelling bookings one can transfer their refund amount to their MyWallet account and can use the same amount (instead of credit/debit card) to make quick bookings for next travel.
"Customers opting for Digital Wallets receive additional rewards in our Loyalty Programme (MyTripRewards) and exclusive discount on their next purchases as well."
Goibibo also ties its goCash wallet with its loyalty program. Cleartrip also has a wallet feature, but the company doesn't have a loyalty program.
Online ticket cancellation and modification: Cleartrip
From a study that Cleartrip conducted among its customers, one of the big pain points for online bookers was related to refunds.
On average, Cleartrip takes less than 24 hours to refund money to banks, however, rest of the time-consuming process happens at the bank end of the equation.
Among the refund-related phone calls to Cleartrip, for 30% of them the refund would have been already processed by Cleartrip, but it would be still pending with the bank.
Interestingly, over 68% of all Cleartrip cancellations are converts to re-bookings. 15% of all cancellations on Cleartrip happen on mobile apps.
Cleartrip saw a 20% shift from "cancel and rebook" to "amendments" since launch of Online Amendments feature.
So, to make the refund process smoother, Cleartrip recommends users amend a booking rather than cancel and re-book.
Almost 12% customers who book in Cleartrip, come back to cancel and amend their tickets, and of these:
- 80% are online and 20% are offline (calls to customer care)
- 40% are for trains and hotels. Of these, 85% are online and 15% are offline
- 60% of these cancellations are for flights
- About 70% of flight cancellations are done online
- The rest are through calls to customer care
- A large number of the offline cancellations happen over phone because customers don’t have access to a laptop/desktop at the time of cancellation, but they do have a mobile phone handy
Another trend that's been observed by Cleartrip is the pattern of train ticket cancellations. In India, making a train reservation at the last minute is a very difficult task (due to the severe load on server, the site becomes too slow).
Cleartrip recently launched train ticket cancellation facility on desktop and on its mobile apps. The company says:
"Because of the low penalty for train booking cancellations and the restricted availability, people book train tickets in advance, even if their plans are not frozen.
"They would then cancel these bookings if plans changed closer to the travel date. Since there is no way to reschedule train tickets either, we feel allowing trains cancellations on mobile will be a big boon for our train customers."
Online ticket cancellation and modification: Goibibo & redBus
On Goibibo, 5% of the total bookings result in a modification/amendment scenario.
When it comes to cancellation numbers for each line of businesses - 10% of flight bookings turn into cancellations, for hotel and bus business, the numbers stand at 10-12% and 10% respectively.
Goibibo supports cancellation via its website and mobile apps.
Currently, 10% of goibibo's daily bookings are made using the company's digital wallet service, goCash.
CEO Ashish Kashyap, says:
"We have kept goCash as transparent and flexible as possible by giving revert to card option for goCash customers. This gives the complete freedom to the user to convert goCash back to cash whenever the user would like todo so. This is currently done only by goibibo."
This goCash launch has doubled the conversion rate and increased the repeat usage at goibibo.
Apart from the goCash rollout to hotels cancellations/modifications, the company is also in the process of adding international flight cancellations to goCash.
On goCash, Kashyap says:
"We are in the process of creating a goibibo loyalty program based on goCash. We are really looking forward to it especially for hotels segment and strongly believe this loyalty program will drive a lot of conversions on our hotel product too.
"We are constantly evolving goCash and committed to provide disproportionate value to our loyal customers through goCash.
"Instant Refunds was first, Referral Program was second and there are a lot more to come centered around goCash."
NB:Postpone image via Shutterstock.