Expedia’s Virtual Card Lawsuit That Never Materialized
A Warning for Hoteliers
In 2019, a law firm was collecting evidence for a class action lawsuit against Expedia from hoteliers, unfortunately it never materialized because of lack of evidence. In this week’s article, I’ll shed light on how Expedia steals from their hoteliers and how they get away with it.
The Expedia Virtual Card
If your hotel works with Expedia you know what an Expedia Virtual Card is. A customer books a hotel reservation on Expedia, pays Expedia directly, and the room rent amount minus the commission is sent to the hotel via a virtual card.
In this scenario, let's say the cancellation policy is 24 hours in advance. The customer decides to cancel after the cancellation policy has taken effect and they notify Expedia to make an exception for their situation whatever it may be. Bear in mind, since it’s an Expedia pay reservation, Expedia is the one that is holding the customers credit card information (and funds); not the hotel.
The Wide Eyed Front Desk Agent
The next step is for the Expedia customer service representative to call the hotel and speak with the front desk agent about this reservation cancellation. The front desk agent’s name, we will call him “Adam”, is recorded by Expedia (more on that later). The front desk agent abides by the policies for the hotel, especially cancellation policies. He expresses that same sentiment to Expedia and that any exceptions must go through a manager. Therefore Adam declines Expedia’s request for compensation on the reservation. Here’s where things start to get into unfair trade practices territory.
Expedia’s customer service representative will say that Adam said the exact opposite and approved the cancellation, when in fact, he did not. What is more interesting is that, while on the phone still, that they will tell the front desk agent that they will let the customer know that the hotel did not accept their approval for refund on their cancellation. We also don’t know if the customer actually received their money back or not.
Fast forward a month or two later, the hotel manager sees a credit card dispute for that specific reservation for the full amount. In the dispute summary, they cite “Adam” as the one that approved the refund but since it was never processed by him, Expedia is disputing the entire stay.
The general manager confronts Adam regarding this specific reservation and he vehemently denies approving this request. The manager is asking himself, Who is right and who is wrong? The hotel didn’t record the call and therefore they don’t have the evidence. This was the reason the class action lawsuit also failed.
Eventually this conversation with an Expedia rep will happen when the actual manager takes the call and to no surprise, they will do the same thing. How do I know? This exact situation has happened to me. Multiple times. Some of these Expedia virtual card disputes were even from reservations that actually stayed at my location as well.
This should come to no-ones surprise because Expedia has been doing this sort of thing and getting away with it for years. I was part of a class action lawsuit on this issue in 2019 and the only reason it didn’t come to fruition was because not a single hotel had the recorded phone conversations with Expedia. Expedia would always win because they always initiate this conversation over the phone. You can’t sue them if you don’t have evidence, and they know this.
The hotelier can try to fight a virtual card chargeback with the credit card processor and they may even win the first round. Unfortunately, Expedia has a dedicated chargeback department that will take it to a secon or third round and then to arbitration. They have all the time in the world to fight every single round and eventually, they will win. This is why Expedia is not a true partner for any hotel.
Has this happened to your hotel? Share your experience in the comments.
