ARC Introduces Best Practices for Debit Memos

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ARC Introduces Best Practices for Debit Memos

ARC is proud to announce the travel industry’s first set of best practices for preventing and resolving debit memos, created by the Debit Memo Working Group (DMWG).

The Best Practices for Effective Debit Memo Resolution and Prevention include guidelines for airlines, travel agencies, global distribution systems (GDSs) and ARC. The goal of these best practices is to produce more effective, timely and predictable debit memo resolution, as well as the prevention of debit memos wherever possible.

Every day, ARC settles approximately $238 million in airline ticket transactions between more than 220 airlines and 12,000 travel agency locations. In 2017, a daily average of $337,000 in debit memos was issued to U.S. travel agencies. Historically, each agency and airline has handled these debit memos in disparate ways — resulting in a complex, time-consuming and often unpredictable environment.

Thanks to the work of ARC’s DMWG, the industry now has a set of guidelines for more effective, timely and predictable debit memo resolution. These best practices equip organizations throughout the travel industry to streamline processes, save time and resources, and enhance communications surrounding debit memos.

Download Best Practices

"The best practices for handling debit memos will enable airlines, travel agencies and GDSs to manage debit memos in a more consistent and efficient manner. In addition, the guidelines emphasize the importance of training and communication, that are key to supporting our common goal of reducing the volume of debit memos that are issued. I applaud ARC for all of their guidance and support in making this effort a success.”

–Jackie Baxter, Senior Manager, Travel Agency Audits, United Airlines

For more than a year, the Debit Memo Working Group has been working to identify key issues surrounding debit memos. In a series of workshops throughout 2017, the DMWG collaborated on proposed solutions that would benefit the industry as a whole. In December 2017, the DMWG voted to approve the finalized set of best practices.

The best practices span four segments of the debit memo life cycle: debit memo communications and training; auditing and debit memo issuance; debit memo research, communication and response; and debit memo settlement. Each segment outlines responsibilities for travel agencies, airlines, GDSs and ARC.

It is important to note that these best practices are guidelines, and they are not enforced by ARC. ARC understands the need for each airline, travel agency and GDS to make its own commercial decisions. However, ARC encourages these entities to consider adopting some or all of these best practices in order to provide a more predictable, clear and effective environment for the air travel industry — ultimately resulting in fewer debit memos and more efficient resolution of the memos that remain.

As these best practices are adopted, ARC will benchmark their impact throughout the travel industry. The DMWG plans to revisit this document as needed, making any necessary revisions as the industry evolves.

“When debit memos do arise, we can all leverage this document to examine our habits, and align to the best of our ability with what the industry has defined as best practices. This will drive consistency in our processes and allow us to work more effectively with our industry partners.”

–Paula Peitz, Director of Airline Accounting, Carlson Wagonlit Travel

For an overview of the Best Practices for Effective Debit Memo Resolution and Prevention, sign up for one of ARC’s upcoming webinars:

Debit Memo Best Practices for Agencies
March 7, 2018
2-3 p.m. EST

Debit Memo Best Practices for Airlines
March 8, 2018
1-2 p.m. EST

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About the author

Megan Leader is a senior brand and content strategist for ARC. She writes about air travel data, trends and destinations for readers throughout the travel industry. An avid traveler, Megan loves to explore art, design and food culture in cities around the world.