Over 7,000 Refund Inquiries Received Last Year
Cancellation Possible Within 7 Days Under Current Law
#Office worker Park (32) recently booked a 5-star resort in Bangkok, Thailand, through a lodging reservation platform. The next day, realizing he had mistaken his departure date, Park requested a refund from the platform. However, despite the stay being about two months away, he was told a refund was not possible. As a result, Park faced losing 1.2 million KRW for a 3-night, 4-day stay.
As the vacation season approaches, consumers are increasingly experiencing refund issues with overseas lodging reservation platforms. Although the current Electronic Commerce Act allows withdrawal of a purchase contract within 7 days, platforms are refusing refunds based on their own terms and conditions.
According to the Korea Consumer Agency on the 5th, last year, there were a total of 19,418 international transaction consumer consultations, a 17% increase from the previous year (16,608 cases). Among these, the largest category was airline tickets with 5,254 cases, accounting for 28% of the total. Consultations related to lodging accounted for 12% (4,665 cases), the second largest category after clothing.
Regarding reasons for consultations, cancellations and refund delays or refusals accounted for the largest share at 38.7% (7,521 cases). Issues related to delivery and unfair penalty or fee charges followed with 14% (2,647 cases) and 12% (2,271 cases), respectively.
Notably, some consumers reported cases where they canceled their reservation within hours but did not receive a refund. Graduate student Choi (27) recently booked a resort in Da Nang, Vietnam, through an overseas lodging reservation platform and requested a refund from customer service just 3 hours later. However, the customer service informed her that refunds were not possible, citing that the reservation was made under a discounted special offer that did not allow refunds.
Opinions differ on whether such actions by overseas platforms constitute illegal conduct. The Consumer Dispute Mediation Committee of the Korea Consumer Agency holds that consumers who enter into lodging contracts under the current Electronic Commerce Act can withdraw their contract within 7 days. The Fair Trade Commission has also issued corrective recommendations and orders to platforms, stating that no-refund clauses impose excessive compensation obligations on customers.
On the other hand, the Supreme Court has ruled that these are not unfair terms. In September last year, the Supreme Court's 3rd Division (Presiding Justice Ahn Cheol-sang) upheld the lower court ruling in favor of the plaintiffs?lodging reservation platforms Booking.com and Agoda?in their appeal against the Fair Trade Commission's corrective order. The court reasoned that choosing a special offer was the consumer's choice, so the no-refund clause did not impose an excessive burden on consumers.
As such cases continue, consumer organizations urge consumers to carefully review reservation conditions when booking lodging.
A representative from the Korea Consumer Agency explained, "Most overseas lodging platform operators are foreign businesses, making it difficult to resolve consumer damages. Especially when booking non-refundable products, it is challenging to change reservation details even if plans change." They added, "Since the transaction terms presented by the platform take precedence over those offered by the lodging facility, consumers should accurately check the platform's refund and compensation policies before making a reservation."
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