Travel bans
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  • Many South Africans are struggling to get money back from airlines, accommodation and car hire after coronavirus-related cancellations
  • What your rights are will depend on the terms of your contract.
  • But you should be able to claim your deposit back.  
  • And if you received a voucher as compensation, you should have three years to redeem it
  • For more stories, go to Business Insider's home page.

South Africa’s Covid-19-related lockdown has had severe implications for businesses - especially those in the tourism industry

Since the South African government issued calls for social distancing, and subsequently enforced these via a national lockdown, consumers have been scrambling to reclaim money spent up front on flights, accommodation, cruises, and car and venue hire. 

When it comes to refund requests, how successful you are may depend on whether your booking was due to come into effect before or during lockdown, and what the contract between you and the company in question specifies in the case of an ‘act of God’.

Airlines in South Africa were among the first to offer varying forms of compensation for those unable, or unwilling, to take flights because of the coronavirus - mostly in the form of future vouchers or credits. 

But subsequent to these announcements, airlines have been flooded with complaints by people unable to secure confirmation of refunds. Customers of Kulula.com, for example, have posted several dozen messages on the company Facebook page that say it’s impossible to reach call centre staff to cancel flights and receive refunds.

There are also complaints about other businesses in the sector simply not willing to issue refunds - both before and during the lockdown phase. 

One Facebook user says that cruise company MSC Cruises refuses to refund cash spent on a trip, and instead will only issue a voucher.

Local accommodation booking site Lekkeslaap.co.za has received mixed reviews on customer review site HelloPeter about its cancellation policies due to the coronavirus - with some complaining normal cancellation policies seem to apply. One Lekkeslaap customer says she had no option but to forfeit R3 000 that she had already paid to them. Another accused them of “playing hardball” over R1 500.

Lekkeslaap responded that if dates fell within the 21-day lockdown period customers would have the choice of “a full refund, a free date change or a voucher refund”. Outside of the lockdown period, their normal cancellation policy would apply.

Car hire company Thrifty has also confirmed to some clients that they are unable to refund customers’ bookings due to “force majeure” (another name for an act of God) - but they are willing to allow flexibility with regards to rebooking vehicles at a later date.

So, what are your rights?

According to Lisa-Marie Bowes, a partner at Schindlers Attorneys, people looking for refunds on bookings and deposits affected by Covid-19 have some legal options - but there are limitations.

“The present pandemic undoubtedly constitutes an ‘act of god’, or what is commonly referred to in the legal world as ‘vis major’.”

Bowes says that where vis major is not specifically addressed in a contract, the common law will apply. This means that consumers may have some options - but not necessarily immediately.

“Where, as a result of the lock-down, one of the parties cannot perform on time (for example in contracts for delivery of non-essential goods), such obligation, as well as the other party’s reciprocal obligation (which is generally to make payment), will automatically be suspended during the lockdown,” says Bowes. “This must be performed within a reasonable time after the lock-down is uplifted.”

What constitutes a reasonable time, however, will depend on the facts of the case, says Bowes.

Where the date of delivery is material and if one of the parties cannot perform at all - such as when accommodation was booked during the time of the lockdown, Bowes says the obligations arising from that particular contract will be “extinguished” - including the obligation to make the payment.

Even so, Bowes says if a contract says otherwise, consumers may be bound by these terms instead of the common law. 

“Whilst contractual terms addressing vis major events generally follow the common law, this is not always the case. Consumers should carefully consider the terms of their contract to determine their legal position.”

Deposits must be paid back 

Those who have paid deposits for items like car hire, cruises and accommodation, also have some options at their disposal.

“If consumers have paid a deposit for services to be delivered on a material specified date and, as a result of the lockdown, the service provider is unable to deliver on that date,” says Bowes, “consumers will enjoy a claim for repayment of the deposit, unless the contract stipulates otherwise.” 

In cases like these - where the contract does not say otherwise - Bowes says “the supplier is not entitled to refuse to refund the deposit or to advise that the services will be delivered on a later date, to be agreed to between the parties. If the supplier attempts to do so, the consumer will be in a position to launch proceedings to recover its deposit.”

Vouchers or credit

Many companies in the tourism sector, including airlines and car hire, have avoided offering cash refunds, and instead  offer credit or vouchers to be redeemed once South Africa’s lockdown period has ended. Some of these vouchers, however, have limited validity periods - some as short as six months.

In these situations, consumers may be able to turn to the Consumer Protection Act (CPA) for assistance. Bowes says there are several factors that may limit the applicability of the CPA on cases relating to Covid-19, but if this is not the case it may be possible to use the CPA to request a voucher with a longer validity period.

“To the extent that it does apply to a particular transaction, the Consumer Protection Act provides that vouchers must remain valid for a minimum period of three years, unless they are redeemed in full on an earlier date. The three-year period can, of course, be extended by agreement between the parties.”

What happens if a company can’t afford to pay you back?

In some cases, the company in question may simply not be able to afford to refund customers - which is a situation also accounted for in South African law.

If a company is obligated, but financially unable, to make repayment of deposits to its customers, it may fall within the definition of financial distress - in terms of the Companies Act. 

“The board of such company may be obligated to resolve that the company be placed into voluntary business rescue, or explain to its creditors why it has elected not to place the company into business rescue,” says Bowes.

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