To effectively resolve debit memos in our industry, it’s important that all travel agents with ticketing capabilities gain a solid understanding of debit memos, their causes, and how to avoid them. Additionally, airlines should be proactive in clearly communicating fare rules and policy changes to travel agencies. In many cases, debit memos can be avoided altogether with comprehensive communication, training and educational resources.

Training and Educational Resources

Agency Responsibilities

• Encourage training for employees (from ARC, IATA and GDSs) encompassing debit memo avoidance training, to include refunds and exchanges.
  Provide fare rule training, including refund and exchange processes, to agents in order to avoid errors and subsequent debit memos.
• Provide rules, as well as booking and ticketing training, to employees.
• Use past debit memos as training tools and create internal best practices from “lessons learned.”
• Use Memo Manager data to identify specific training topics and debit memo trends.
• Establish and communicate best practices with sub-agents for debit memo resolution and payment.
• Ensure staff is aware of and understands the Best Practices for Effective Debit Memo Resolution and Prevention.

Airline Responsibilities

• Ensure that internal teams work together to raise awareness of the impact their decisions, especially around sales contracts, have on auditing and revenue accounting.
• Be forward-thinking when making policy decisions or changes, anticipating potential issues that may result in debit memos. Include colleagues from different teams when making changes that impact fare filing, booking, ticketing, reporting and sales contracts in the agency distribution channel.
• Educate audit teams regarding all updates and changes to contracts, programs and technology to allow time for audit adjustments. This includes any external audit vendors.
• Establish and update training materials and audit protocols.
• Provide travel agencies with advance notice of debit memos with high volume and/or value.
• Work with GDSs to ensure fare processing, fare interpretation and fare intent are captured correctly.
• Provide advance notice of new memo types to be issued.
• Publish a “Tips and Tricks” or “How to Avoid a Debit Memo” document for agency reference.
• Ensure staff receives training on the Best Practices for Effective Debit Memo Resolution and Prevention.
• Publish booking, ticketing, IROP and ADM policies on the airline’s website.
• The website should include a dynamic search engine that makes these policies easy to locate.
  These policies should be accessible with no login required.

ARC Responsibilities

• Agency administrators are able to publish their policy link in Memo Manager, which appears on every memo within AMM which appears on every memo within the tool. ARC will maintain the policy links on arcccorp.com.

Contracts

Agency Responsibilities

• Review contracts prior to system load and test contract terms within the agency’s systems. This should take place prior to issuing live tickets under the contract.
• Maintain updated contract information internally, and make current contracts available to all ticketing agents.
• If short notice is given by the airline for a contract or a contract change, work with the airline to obtain a short contract overlap (e.g., a two-week transition period).

Airline Responsibilities

• Create contracts that can be filed with ATPCO, and work to file them in a timely manner.
• Work to reduce contract complexity and be clear in contract parameters (e.g., clearly communicate contract receipt date versus contract effective date).
• Take responsibility for implementing and testing contract terms.
• Communicate contract changes (including addendums) to travel agencies with adequate time to update ticketing operations. At least two weeks’ notice is preferred.
• All parties (airline, agency, auditors, sales and revenue management, and joint business partners) must remain in sync with identical contract terms and any changes to those terms.
• Airlines should not verbally issue contracts or updates to contracts. Any contract changes should be provided in writing via mail or email.
• If short notice is given for a contract or contract change, offer a short contract overlap (e.g., a two-week transition period.)

Automation

Agency Responsibilities

• Use GDS auto-pricing when possible to avoid errors.

Airline Responsibilities

• Strive to use automation when loading all fares to ATPCO, including refunds and exchanges.
• When an automated category conflicts with a manual category (e.g., ATPCO Category 31 versus ATPCO Category 16), the automated category should take precedence over the manual one.
  For example, if a ticket is issued using the automated Category 31 and a conflict exists between Category 31 (automated) and Category 16 (manual), a debit memo should not be raised for a Category 16 violation.

Ticket Designators

Airline Responsibilities

• Minimize — or eliminate, when possible — the use of manual ticket designators.
• No manual ticket designator or tour code should be included in contracts; ticket designators and tour codes should only be used if filed with a fare.

Chargebacks

Agency Responsibilities

• Employ all Best Practices for Card Acceptance and Risk Management to minimize chargeback debit memos. These Best Practices with a list of Fraud Detection Tools can be found in Section 6 of the Industry Agents’ Handbook.

Airline Responsibilities

• Employ all Best Practices for Card Acceptance and Risk Management to minimize chargeback debit memos. These Best Practices with a list of Fraud Detection Tools can be found in Section 6 of the Industry Agents’ Handbook.
• Notify agents of chargebacks before a memo is issued (pre-notification).
  Pre-notification of chargebacks should eventually be sent via ARC’s Memo Manager, but this functionality is not yet available. Until that is built, they should be sent via email with a distinctive subject line of “Pre-Chargeback Notification.”
  Include a timeline on the pre-notification memo so agent is meeting the carrier’s deadline to respond to the credit card company. The airline should not issue a debit memo to agent until the deadline noted on the pre-notification has passed.

ARC Responsibilities

• Evaluate the ability to create a pre-notification function within Memo Manager.

Fare Rules

Airline Responsibilities

• Work to simplify fare rules, which will promote more efficient use of automated ticketing.

Audit Consistency

Airline Responsibilities

• Third-party audit teams must have the same education (fares, taxes, contracts, etc.) that internal auditors receive and should apply policies consistent with those of the airline’s internal audit teams.
• If fare filing information is not available to third-party auditors, the airline should work with them to help interpret fare rules.

Waivers

Agency Responsibilities

• Do not accept any verbal waivers from an airline.

Airline Responsibilities

• Do not provide verbal waivers.
• Employ automated waiver tools to disseminate information to agencies in Irregular Operations (IROP) situations. This would expedite the exchange of passenger tickets (especially in natural disaster situations).

Timely auditing and issuance of debit memos, as well as a centralized method of communication in Memo Manager, creates a more efficient and predictable environment for debit memo resolution. It’s also important for airlines to provide as much detail as possible within the fields of Memo Manager; this gives agencies the context they need to conduct thorough research and ultimately prevent future debit memos.

Timing of Issuance

Airline Responsibilities

• Issue debit memos within nine months of the last travel date for straight and exchange sales, and within nine months of the date of refund.
• Issue chargeback memos within 45 days of the chargeback.
• Issue usage fraud memos (determined by an established pattern) within two years.
• Issue interline memos within nine months of other airline (OAL) reject billing.

Reason Codes

Airline Responsibilities

• Use ARC’s standard reason codes for all memos.

Ticket Numbers

Airline Responsibilities

• Include all ticket numbers on the memo, not in an attachment or spreadsheet, with memo amounts shown for each ticket. Attachments may supplement the memo, but the ticket information should be listed within Memo Manager.
• If a memo is issued for a transaction with no ticket number, the passenger name record (PNR), pseudo city code (PCC) and GDS should be included on the memo.
• The agency’s ticket number should be listed on the memo, even in the case of an airline exchanging an agency-issued ticket.

Memo Manager (AMM)

Agency Responsibilities

• Use Memo Manager for memo disputes and memo-related communications.

Airline Responsibilities

• Issue memos electronically via Memo Manager, not via mail or email.
• Use Memo Manager for memo disputes and memo-related communications.
• In Memo Manager, all available fields and amounts should be completed and correct when loading a debit memo. Do not use attachments to provide this information.
  Only use attachments for supplemental information, not to communicate key information about the memo

GDS Responsibilities

• Use Memo Manager for memo disputes and memo-related communications.

ADM Issuance

Agency Responsibilities

• The ticketing agent, not the booking agent, is responsible for the debit memo.

Airline Responsibilities

• Issue memos to the ARC number that issues the ticket (the ARC number displayed on the ticket).

Once a debit memo has been issued, all parties should commit to timely response, thorough research and consistent communication in an effort to resolve the debit memo. Debit memos should ideally be resolved within 90 calendar days of memo issuance.

Response Timing

Agency Responsibilities

• Acknowledge the receipt of a debit memo within 10 business days of issuance. This will be indicated by an automatic change in memo status when the agency opens the debit memo.
• Return chargeback responses to the airline within seven calendar days of issuance.
• Dispute any memos within 30 calendar days of issuance. (This includes memos sent to the GDS; agencies should notify the airline if a memo has been sent to the GDS.)

Airline Responsibilities

• Respond to disputes within 30 calendar days of receipt of the dispute.

GDS Responsibilities

• Respond back to the agency within 30 calendar days of receipt of a debit memo.

Dispute Communication

Agency Responsibilities

• Disputes should address the specific issue raised in the memo, and why the agency considers the memo invalid.
• Provide documentation to support the dispute (e.g., PNR, contract, fare rule).

Airline and GDS Responsibilities

• If denying a dispute, airlines and GDSs must give a clear, concise, but descriptive professional response as to why they are denying or rejecting the dispute.
  Do not use generic dispute responses (dispute denials) such as “memo stands,” “memo valid” or “dispute denied.”
  Address the specific issues noted by the agency in their response.
  Clearly communicate to the agency what materials, if any, the airline would accept in order to invalidate a memo (e.g., a contract addendum or waiver).
• GDS responses may include a technical explanation for the airline, but these should also be clarified in layman’s terms to ensure clear communication.
• Third-party vendors must follow established best practices.

Escalation Process

Agency Responsibilities

• Establish an escalation process that takes effect after the memo has been unsuccessfully disputed twice.
• Provide airlines with an email address for the escalation process.

Airline Responsibilities

• Establish an escalation process that takes effect after an agency has unsuccessfully disputed the memo twice.
• Provide agencies with an email address for the escalation process.

Aging Memo Reports

Agency Responsibilities

• Run monthly reports to ensure all debit memos are being reviewed and the oldest ones are actioned, with the goal of reducing the number of memos reaching in “inactive” or “moved to collections” status.

Collections/Inactive Status

Airline Responsibilities

• Respond to agency disputes and review fare rules prior to sending a debit memo to collections or changing to inactive status.

Dispute Limits

Airline Responsibilities

• The minimum dispute limit should be set to three in Memo Manager.

When a debit memo reaches settlement, agencies, airlines and GDSs should clearly communicate any special arrangements to all parties involved (e.g., payment plans, partial payments or GDS payments to agencies). Payments made through Memo Manager should then be closed with a note indicating the reasons for the memo’s closure.

Payment Methods and Timelines

Agency Responsibilities

• Make all payments, including GDS payments and partial payments, via Memo Manager or Interactive Agent Reporting (IAR).
• Pay a memo within 14 calendar days of determining it is valid.
• Pay a memo within 14 calendar days of receiving payment from the GDS.

GDS Responsibilities

• Pay the travel agency within 14 calendar days of accepting responsibility for a memo.

Duplicate Payments

Airline Responsibilities

• Issue a credit to the travel agency within 14 calendar days of receiving an overpayment.

Partial Payments

Agency Responsibilities

• In order to make a partial payment, an agency must first dispute the memo in Memo Manager, and the airline must agree to a memo reduction.
  Upon agreement to a memo reduction, the airline should update Memo Manager with the adjusted amount.
• Agencies may make partial payments in the case of an agreed-upon payment plan.

Airline Responsibilities

• If the airline agrees to adjust a debit memo, update Memo Manager with the adjusted amount within two business days.
• If a payment plan has been agreed upon, document the arrangement in Memo Manager.

Closing Memos

Airline Responsibilities

• Close memos in Memo Manager within 14 calendar days of receiving payment.
• When fully or partially closing a memo, provide an explanation of why the debit memo is being closed.

GDS Responsibilities

• Provide detailed information about what the GDS is (or is not) responsible for and what it will (or will not) pay.
• Maintain clear communication with the agency regarding memo resolution, and document the memo’s resolution and closure within Memo Manager.