Virgin Holidays is damaging its reputation due to refunds process

Virgin Holidays customers do not feel reassured due to the uncertainty around the future of travel. Credit: Richard Podgurski / Shutterstock.

Thousands of customers are still waiting for a refund from Virgin Holidays, despite rules requiring companies to pay out within 14 days. Watchdog has received 27,000 consumer complaints about airlines and holiday firms failing to provide refunds for cancelled trips and has since launched an investigation. It is critical for companies to be reassuring customers during these uncertain times, otherwise there will be negative repercussions.

Virgin Holidays said it could assure customers that refund payments would be paid within an ‘absolute maximum of 120 days’ from when the request was submitted. However, customers do not feel reassured due to the uncertainty around the future of travel and the companies operating in the sector. According to GlobalData’s week 10 Covid-19 global consumer survey, 80% of respondents are either ‘extremely’ or ‘quite’ concerned about the outbreak of Covid-19. These concerns will be heightened if they are unsure of when they will be receiving their refunds.

During these uncertain times, companies must be focusing on their image to shorten their recovery periods. In GlobalData’s week 10 Covid-19 global consumer survey, 32% of respondents stated they are spending more time reading online reviews and blogs about products / trends. This highlights that one negative review or online post can impact a company’s image indefinitely. Once an image is damaged, it is difficult to restore.

To retain customer loyalty the company must be showing it is reacting efficiently to problems created by the outbreak of Covid-19. Dealing appropriately with refunds is one way to enhance customer loyalty. Virgin Holidays could provide an incentive to customers who are still waiting for a refund, this could be a voucher to spend when they book their next holiday with the company. A ‘sweetener’ needs to be in place to reduce growing frustration.

Virgin Holidays are not the only company facing backlash over refunds. TUI has also been the face of negative press after customers that opted for a credit refund have found rebooking the holiday is costing more than the original price. Although this shows Virgin Holidays is not alone in facing criticism, there is an opportunity to restore its image in a timely fashion to gain a competitive advantage.

Virgin Group has already suffered a financial loss of $60m in the first quarter of 2020 for its ‘Virgin Galactic’ space travel venture. Its other tourism and leisure related interests have also been savaged by the effects. The group should now be aiding its recovery process; it does not want to face further, unnecessary economic loss as it is obviously already reeling from the coronavirus crisis.

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