Debit Memo Best Practices in Action

How Airlines and Agencies are Using the Best Practices for Debit Memo Resolution and Prevention

At the end of last year, ARC’s Debit Memo Working Group (DMWG) voted to approve the travel industry’s first set of best practices for handling debit memos.

We checked in with several members of the DMWG — airlines, agencies and GDSs — to see how their organizations are using the best practices, and the impact they’re seeing in the industry. We heard from:

  • Lisa Taylor, Agency Audit and Memo Collection Supervisor, Alaska Airlines
  • Robbi Hamida, Vice President, Nexion, LLC
  • Blake Houser, Implementation Specialist and ARC Manager, Virtuoso
  • Cheryl Anderson, Team Leader, Customer Relations/Claims, Amadeus
  • Shannon Keever, Debit Memo Analyst and Reconciler, Altour
  • Barbara Olejarczyk, Manager, Debit Memo Support, BCD Travel
  • Teresa Young, Senior Manager, Global Debit Memos, Expedia

While many challenges still exist, often regarding communication timeliness and clarity, respondents agreed that the best practices are practical, usable and relevant to the issues facing those who manage debit memos. The DMWG will continue working toward greater adoption and consistent use of these best practices across the industry.

ARC: Have you started using the best practices?

All respondents echoed a resounding “Yes,” with some noting that their organizations’ existing operations were already well-aligned with the best practices. Nexion’s Robbi Hamida noted that his agency has already shared the best practices with their entire agent population, and they are already teaching it in webinars. Altour’s Shannon Keever mentioned that her agency sends email alerts with tips on avoiding debit memos based on the debit memos received.

Which best practices have been the most effective for you and your organization?

Respondents noted that communication surrounding debit memos is critical, with several referencing elements of Section 1: Debit Memo Communications, which spans everything from chargebacks to contracts and employee training. Others referenced Section 2 of the best practices, which covers auditing and debit memo issuance, much of which is handled through ARC’s Memo Manager tool.

Robbi Hamida, Nexion, LLC: All of Section 1.

Shannon Keever, Altour: Responding to debit memos in a timely fashion helps to keep a manageable workflow . Maintaining commission contract[s] internally and making them available to all ticketing agents.

Blake Houser, Virtuoso: We have requested airlines to remove ticket designators from contracts.

Lisa Taylor, Alaska Airlines: We are very proactive when it comes to working chargebacks. We always reach out to the agency community for additional support to represent chargebacks to the bank. We have found quite a bit of success by partnering with the agency community.

Barbara Olejarczyk, BCD Travel: Set timelines, issue [the debit memo] within nine months of ticket issuance. Agencies must process [debit memos within a] set time.

Teresa Young, Expedia: One of the most helpful best practices for us is about keeping debit memo communication within ARC Memo Manager. The scale of our business makes it important to have a central tool in order to efficiently handle debit memo operations.

Cheryl Anderson, Amadeus: I have used Memo Manager’s data to identify specific training topics and debit memo trends. Most recently, for [debit memos] involving exchange of negotiated-fare tickets with markups. Presented internally with supporting documentation to review what to look for, and how to properly investigate, since [the debit memo] reason usually comes across as “fare under-collected” with no additional information and actually related to commission.

What is your biggest pain point around debit memos? Do the best practices help address them?

Several respondents noted that response timelines continue to be an issue, especially surrounding disputes. Clear communication — avoiding technical language and jargon — is also needed to improve effectiveness. This is seen most frequently in cases where debit memo management is outsourced to a third party outside the air travel industry.

Anderson: Biggest pain point is time to resolve [debit memos], especially when the memo reason is not very clear. It just takes longer than it probably should with the back and forth for clarification. Hopefully the best practices guidelines will be followed and everyone benefits from positive results.

Houser: Carriers’ or GDSs’ timeline on disputes is my biggest frustration. Best practices may help with the carriers that are implementing them.

Young: The biggest pain point around debit memos is communicating complex ticketing restrictions to front-line agents in a way that is simple enough to efficiently sort through massive amounts of information to reach the right conclusion. One of the biggest areas of concern is around irregular operations, such as schedule changes caused by winter storms. While the best practices don’t help this directly, there is a movement within the DMWG to address this holistically amongst the DMWG participants to see if our ambitious group can tackle this long-standing industry driver of debit memos.

Keever: Disputes are the biggest pain point. They take forever to resolve and usually involve multiple attempts. If all involved would provide detailed information that addresses the reason the memo was issued and/or why it’s being disputed, and if a dispute is denied, acknowledge what was in the dispute and why that is not valid. As it’s very random on how quickly a dispute is responded to, it becomes cumbersome continually looking for updates and you sometimes miss updates for others who have responded quickly. Improvements in [ARC’s Memo Manager tool] for recognizing dispute responses would be a great help.

If disputes were handled in a timely manner, all communicated via [Memo Manager], where disputes were not limited to less than three and the correspondence back and forth included detailed responses addressing the issue, this would greatly improve this, and the best practices address all of these areas.

Taylor: Our biggest pain point is the GDS response to memos. The technical jargon is just unbelievably hard to understand. They believe the intent is that the carrier would forward this to the fare filing team to review since it speaks “their language,” but that is just not a possibility for every dispute received. The filing team is not part of the debit memo/audit team, and to expect them to make time for every single dispute is unrealistic. We do have a best practice of using “layman’s terms” in a dispute, but I haven’t seen that practice put in place.

Hamida: Biggest pain point is new rules, which are hard to read and outsourced [to] collections, who do not understand the industry.

Olejarczyk: Airlines who do not respond to disputes, or rubber stamp as rejected without consideration of evidence (third party).

Which best practices were the most difficult reach consensus on?

Several respondents agreed that timelines for debit memo correspondence took a lot of work to establish, but that overall, the conversations to create the best practices were productive and honest.

Houser: I think the technology pieces is where we had the most [conversation], considering that not all agencies can afford the technology.

Anderson: Missing endorsements.

Young: I believe two of the of the most difficult best practices to reach consensus on were around appropriate timelines for issuing, disputing and paying memos, as well as what part agencies play for auto-priced ADMs that are GDS liability but issued to agencies.

Hamida: I found that anything related to timing was a cantankerous issue. Everyone had a different perspective of [whether we should] go strict to close memos, or give longer research periods. Also, timing dictated by the GDS partners on when they will even look at a memo.

Taylor: I don’t recall any practice that was difficult. I really felt there was open, honest communication amongst the group and the goal of developing a usable tool was achieved.

Keever: Timelines. I like having timelines to encourage quick action, but worry about mandates that say you lose your ability to dispute if not done within 30 days, for example. This isn’t in the best practices, but [I] worry that a carrier may think this is always reasonable, based on the best practices... [Additionally,] simplifying fare rules seems beyond the scope of everyone involved.

Olejarczyk: None really, essentially all stakeholders were on the same page. The most difficult part is cooperation from the entities who do not participate in the group.