The pandemic has hit every industry hard over the past 18 months, but few have been as badly impact as the cruise sector. With little to no travel during this time, operators have seen significant financial losses. Industry giant Carnival Corporation alone saw a $3 billion profit in 2019 turn into a $10billion loss in 2020. While seasoned cruise travellers will no doubt be swift to return and enjoy trips once again, attracting new customers is always much harder. Nonetheless, the cruise industry will need to tempt new customers if it is to return to profitability and growth in future. Consumers are still concerned about holidays being cancelled or amended, which means refund policies and processes have become business critical.
Cruise lines have been quick and successful in adapting to this new change. For example, Royal Caribbean International and Norwegian Cruise Line now offer refund credits worth 125 per cent of the original booking fee. While these discounts and promotions have been well received, it’s no secret that they are unsustainable as a long-term solution. Instead, cruise lines need to review and update their refund processes and systems to be the backbone of their future growth and profitability. It is, therefore, worth looking at the three stages of the refund process, and what cruise lines can do in each to enhance their existing set-ups.
The refund process starts long before a customer contacts a business. Data from Narvar's Making Returns a Competitive Advantage survey showed that 49 per cent of consumers look at refund processes during their purchasing journey, and most will revisit it before asking for one. Consequently, it is worth cruise operators reassessing refund policies to ensure they are clear, easy to read and quick to find. In addition to this, the communication channels on offer for refunds is equally important. Offering in-person, phone and online communication channels for refunds greatly increases the customer experience by removing a point of friction. Making the process for applying for a refund as quick, simple and as easy as possible will immediately put customers in the best frame of mind and underline to them that they are a priority for the business.
Once a refund request has been filed, customer support teams need to act fast. Slow response times and delayed confirmation of refund requests being received can severely damage customer relations and lead to increased churn. Having streamlined processes and internal systems in place that provide clear ownership with who should respond and how will make this process much easier. Technology can also improve this further via the use of chatbots for online requests. Using simple, automated chatbots to handle simple requests and support the initial phase of a refund process, takes the pressure off human teams and allows them to focus on speaking with customers directly to deliver a first-class experience.
Although speed is of the essence, the process must not be rushed. Conducting a full investigation into requests and checking for fraud needs to be carefully undertaken, or it risks increasing financial losses and damaging customer relationships. Unfortunately, fraud has been on the rise since the start of the pandemic. Data from Finance UK’s The Definitive Overview of Payment Industry Fraud report found that in 2020, impersonation fraud – including those for refunds – grew by 97 per cent in volume, highlighting just how big a problem it is. Luckily, technology can help. Robotic process automation along with advanced artificial intelligence algorithms can automate and speed up back-end processes during a refund request, allowing businesses to operate at speed without reducing the checks they conduct. By checking details against existing databases and scanning for fraudulent behaviour and tells, these systems can guide customer support teams with issuing a refund or highlighting a claim or additional checks.
However, despite the use of these technologies, the fraud checking process can be negatively impacted and slowed by overly complex payment systems. Legacy systems that operate in a siloed way can impact automated systems and require manual assistants to progress. With the latest payment systems in place, though this does not need to be an issue. Cruise lines can reduce the complexity of their payment systems by using a single integrated payment gateway that all transactions pass through regardless of currency, payment method, or acquiring bank. This makes it much easier for automated systems to operate while also adding flexibility to the system when dealing with refund requests from multiple regions and countries.
Furthermore, by reducing the complexity of payment systems, once a refund has been approved it can be paid quickly as there is no issue with navigating currencies or acquiring banks. By simplifying the payment system, cruise lines can ensure they continue to deliver the first-class, consistent experience customers have come to expect.
Once the fraud checks are complete and the refund is processed, the post-refund phase can begin. This should start with following up with customers to check they are happy with the resolution and crucially have received the funds too. After that is complete and the refund process has been resolved, it is worth cruise lines asking for feedback. By gathering feedback from customers, refund processes can be further enhanced and improved as a feedback loop for refunds is created. What’s more, positive quotes and comments from customers can be used to advertise and promote the ease of the refund process helping draw in additional customers too.
The past 18 months have been a period to forget for the cruise industry. However, light is beginning to finally emerge at the end of the tunnel. Vaccines are proving successful in limiting the impact of the virus, travel restrictions in many regions are lifting, and customers are increasingly looking to travel abroad. Having succeeded in dealing with the immediate issues of the pandemic and adapting refund policies to match cruise lines need to turn their attention to the future. As the world transitions to living with the virus, re-evaluating and updating refund systems and processes will provide the foundation cruise lines need to return to profitability and growth once again.
David Maisey is CEO MultiPay Global Solutions
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