ECommerce travel agency start-ups need to carefully examine the potential risks associated with selling airline tickets online before opening up for business.
- Recognize your potential sales agent liability. Understanding risk exposure can help travel agency start-ups take appropriate steps to minimize it, and to protect themselves from losses resulting from customer disputes and fraud. Sales agents of airlines, for example, may be liable for the entire amount of an airline ticket, if it is disputed by a customer or purchased with a stolen account number. To mitigate risk, travel agencies need to establish eCommerce policies and procedures to address the following factors:
- An approved authorization request indicates that an account is in good standing. However, the response is not a proof that the legitimate cardholder is making the purchase, nor is it a guarantee of payment. In most cases, therefore, airlines are liable for fraudulent "card-not-present" transactions, even when they were approved by the card issuer.
- Even if a travel agency is not a merchant subject to the Credit Card Associations' regulations, the airline partner is. In most fraud-related cases, the airline transfers financial liability to the travel agency partner as part of the contractual agreement.
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