Want to Keep Customers Returning? Let Them Go

cancellations, refunds, travel, events

COVID-19 has ushered in an age of cancellations, with waves of conferences, concerts and vacations being put on hold.

So, how do you keep those customers coming back when travel and public events are safer? Make it easy for them to leave.

As PYMNTS’ research has shown, merchant cancellation and refund policies can have a significant impact on both customer retention and customers’ willingness to patronize hospitality services.

Our research shows that 70% of customers who canceled bookings with attractions and received a full refund were “very likely” or “extremely likely” to use them again in the next year.

Refunds for events are even more crucial, as 76% of consumers who received full refunds for canceled events said they were “very” or “extremely” likely to attend them in the next year.

At the same time, our research shows that merchants risk customer loyalty with inflexible refund and cancellation policies. Seventy-six percent of consumers said they they are unlikely to return to a hotel, venue or attraction that denied them a refund, while 74% said they are more likely to go back to a place with looser cancellation and refund policies.

Meanwhile, 70% of consumers said they will conduct a careful review of a merchant’s cancellation policy before booking a room or purchasing a ticket.

Even consumers who received partial refunds said they are “very” or “extremely” likely to patronize those merchants in the year ahead — for example, 70% of the consumers who received refunds of 75% to 90% say they are “very” or “extremely” likely to book a stay in the next year.

The same holds true for 62% of the consumers who were refunded 50% of their payment, and the 59% who received less than 25%.

Consumers Are Ready to Travel Again

Our research also showed that consumers want to begin using hospitality and transportation services again. More than half say they are likely to book a hotel room in the next 12 months, while 48% said they are interested visiting an attraction.

Would you like to read more about our findings? Download your free copy of Merchant Refund Policies: Keeping Travel And Entertainment On Track, a PYMNTS and Fortis collaboration.