ARC investigates cause of 7% increase in agency debit memos

The Airlines Reporting Corp. is looking into the causes of a 7.1% increase in the number of debit memos in the U.S. between 2015 and 2016.

The increase came even as the majority of U.S. carriers have seen a substantial decline in debit memos.

ARC, which serves as the billing and settlement plan for travel agencies in the US, said credit card chargebacks remain the top reason for debit memos.

ARC’s Debit Memo Working Group reported at its recent meeting that dollar volume for chargeback debit memos increased 10% between 2015 and 2016.

The group reported a 29% increase in chargeback memo count for the same period.

Over the two-year period, the credit card industry in the US began a transition to chip-embedded credit cards.

The US is the last major market still using the magnetic-stripe card system. The mag-stripe contains static information that once stolen is stolen forever and can be replicated.

But when a chip card is used for payment, it creates a unique transaction code that cannot be used again.

The working group suspects that the transition may be a leading cause of the debit memo increase by shifting many instances of fraud to online vendors.

The group has made the issue a priority for the rest of the year, with a goal of uncovering solutions by the fall.

It also will focus on how carriers communicate the rules for the fares they file in an effort to increase ticketing accuracy, reduce complexity and help to reduce errors that result in debit memos.

The group includes representatives from airlines, travel agencies, system providers and key stakeholder organizations.

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Michele McDonald

About the Writer :: Michele McDonald

Michele McDonald is a senior editor at Tnooz. She has worked as a journalist covering the travel industry for more than two decades.

She is a former managing editor of Travel Weekly (US) and former editor-in-chief of Travel Distribution Report.

In 2002, she founded Travel Technology Update, a newsletter for distribution professionals. She remains editor and publisher of Travel Technology Update. She also contributes to Air Transport World.

 

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