How an online travel agency created an automatic airfare refund service

This week, Cleartrip, one of India’s leading online travel agencies launched Pricewatch, a tool which will automatically issue a refund when a purchased airfare drops below the booked price and its associated amendment charges.

This is the first of its kind from an Indian OTA.

Other similar services launched in recent years include the Tingo brand from TripAdvisor. The booking site automatically reimburses a user if they book a hotel room and the prices drops ahead of the arrival date.

We had the opportunity to discuss the move with Cleartrip’s Pricewatch team. Here are some notes from the discussion:

Why is Pricewatch not applicable for domestic flights?

Domestic airfares rarely drop – in fact, as far as domestic flights are concerned, the best fare to book at is the one available right now.

International fares oscillate due to several factors (currency exchange rates, oil prices, airline revenue management systems etc), hence this feature is more suited for international flights.

If there is no Pricewatch for domestic flights, is there a plan to eventually implement a price-drop alert/notification to the domestic flying customers?

We’ll keep you posted as soon as something like that is happening at Cleartrip.

Pricewatch in some cases rebooks in a “different fare class” altogether. Different fare classes have different rules and restrictions. Changing a fare class means changing the rules & restrictions associated with a ticket. For example, at the time of booking, in the fare class that a traveler booked, a fare might be a refundable fare upon cancellation. After Pricewatch changes the fare class, there might be a possibility that the fare changes to a ‘non-refundable’ fare. How are these scenarios handled?

Yes, different fare classes have different restrictions. In the event that the cheaper fare class has a non-refundable fare (while the earlier fare class was on a refundable fare), Pricewatch will not rebook and alter the booking. So we will ensure that the terms and conditions on the new fare class are the same as that on the original fare class.

If the customers do not want Fare class to be changed, can he opt out of Pricewatch?

Currently its not an opt-in feature, hence cannot opt out. However, when we re-book, we will ensure that the fare restrictions on the cheaper class are the same as on the original class.

Any study / observation on how much on average a traveller will save using Pricewatch?

At minimum, we will refund Rs. 500 with Pricewatch. Average refund to customer is expected to be between Rs 500 and Rs 4,000.

There are many flight fare (price drop) alerting applications like Yapta, Tripit Pro. But, very few (like CheapAir and Orbitz) companies automatically refund money. Cleartrip has clearly gone a little ahead and joined the elite club. Are there more such solutions/offerings coming up?

At Cleartrip, we’re always working towards intuitive and innovative ways to take the hassle and friction out of your travel. That’s what keeps us coming to work everyday. This will never stop.

NB: This article first appeared on Travopia.

Related posts:

1. CheapAir debuts Price Drop Payback but not all paybacks created equally
2. Yapta launches iPhone app for airfare tracking and refund grabbing
3. ChangeYourFlight brings refund service to travellers with non-refundable tickets