Beware When You Go Via Voucher

Standardized travel vouchers that allow consumers to prepay hotel, car rental and other travel-related services are coming more into vogue.

The major credit card companies have long sought to establish such bank-issued, travel agency-handled vouchers that can substitute for cash while serving both as confirmation and payment.

Vouchers are not new, as they have long been used with hotel rooms and other travel services. But there hasn’t been a uniform system in operation.

Now there are three, emanating from MasterCard, Visa and Citicorp, with the trio all aiming for worldwide acceptance in 1987 and optimistic that the uniform vouchers will substantially alter the means of payment by travelers in coming years.

“The travel voucher program by MasterCard and its competitors are attempts to capitalize on what is essentially a $16-billion cash industry by converting existing inefficient voucher methods to a standardized system,” said Robert Moloney, vice president and general manager of the MasterCard Universal Travel Voucher program.

“Vouchers may not become as common as credit cards, but they should replace the current types of travel vouchers and the use of cash as methods of payment,” said Vincent La Paglia, vice president of Visa Travel Voucher.

MasterCard indicated that about 500 U.S. travel agencies use its voucher system, and expects to have as many as 3,500 by the end of this year. Most of the agencies using the Visa system are overseas, with Visa anticipating having 5,000 agencies worldwide next spring. Citicorp has about 500 agencies using its system in the United States, with just under 1,000 expected to be involved by the end of 1986.

Differences Among Systems

There are differences among the three voucher systems. The common element for travelers is said to be more security of hassle-free acceptance from many more establishments already accepting credit cards issued by these companies. Consumers can also avoid currency fluctuations through prepayment of these vouchers.

From a trade perspective, the standardized vouchers are designed to provide quicker payment for hotels and other suppliers; travel agents gain more acceptance from suppliers (agents and hotels, for example, can work together without individual agreements) as well as improved collection of their commissions at guaranteed exchange rates.

Naturally, the banks involved in the process are not left out. They make some money, too.

While relatively new in the United States, these voucher systems have been tested overseas. Endorsement has also come from major hotel and travel agency associations, which doesn’t mean that the systems are trouble-free.

Prepayment Required

With all three systems, you generally have to prepay for vouchers through your travel agent. Of course, agents prefer full payment, as this enables them to subtract their entire commission before remittance of the balance. While the expectation is that you will eventually be able to use credit cards, this isn’t the case yet with all three systems.

“MasterCard is reviewing the use of our credit cards for payment of these vouchers, and their use is likely to be available by mid-1987,” Moloney predicted.

With Visa, it’s up to the individual agency whether or not to accept credit cards for payment. Citicorp said its credit card can be used for voucher payments.

The vouchers, in some cases, may also be used for confirmation purposes, with travelers paying directly to the supplier. These “no value” vouchers may be particularly advantageous if you think the value of the dollar is going down.

While you pay for your vouchers in dollars, find out what conversion rate your travel agent is using. “This rate will be a better one than the retail rate that travel agents normally get,” Moloney said.

“Consumers get the same rate that Citicorp gets and this rate is better than the one used in credit card conversions,” pointed out Sandra Jaco, vice president-World Travel Products for Citicorp.

Take Precautions

Like other travel documents, consumers should take some security precautions. Make separate copies of pertinent numbers, taking one with you and leaving another at home. Find out from the issuing agent what the procedure is for replacement of lost or stolen vouchers, what the refund possibilities are for any unused portions of arrangements you have bought vouchers for, and how long it takes to get a refund. The vouchers are generally fully refundable, but that doesn’t mean you might not be inconvenienced.

Refunds are supposed to be relatively speedy through use of the existing credit card system, some of which are speedier than others. But there isn’t much of a track record to go on yet. The refund will come back from the original travel agent you received the vouchers from, not the credit card company or supplier. It’s possible that some agents may charge a refund processing fee.

You may see electronic authorization terminals at some travel agencies using the MasterCard voucher system.

Vouchers are not transferable and can only be used by the person in whose name they have been issued.

The Citicorp version also combines a check for payment of the service with the voucher, with the voucher issuable in 16 different currencies. The check is given to the traveler in a sealed envelope for presentation to the hotel or other supplier/establishment upon arrival.

“This check can only be deposited and cashed by the hotel, and this system is safer than a credit card because a lost credit card can be used by anyone until reported as lost,” Jaco said. “Consumers are not responsible for loss of the check, which can only be used for the goods and services as noted on the voucher.”

Lost Voucher Charges

If the voucher is lost or stolen, contact your travel agent immediately. Agents can then request a cancellation, issue replacement vouchers and notify the service establishments. Again, agents may impose a fee for the cancellation service. Credit card companies also have toll-free 800 numbers you can call.

If you lose the voucher overseas, see if the service establishment can contact your travel agent on your behalf. There are service centers you can call in Europe, and you may be able to call the credit card company collect in the United States.

However, despite verification of your original voucher payment (the hotel should have your voucher number), if you have lost a voucher you may still have to pay twice if you still want the same room or other service, and then seek a refund upon return.