Why would a cruise agency request final payment 45 days early?

[KS Sunflower]

I noticed my final payment had been charged by the agency and not the cruiseline. I have always heard that you should make sure that the cruiseline is the one who actually charges your card. How will I know if the agency pays the cruiseline?

 

The initial deposit was charged by the cruiseline.

 

This is a large agency that a lot of people on Cruise Critic use.

 

Thanks.

 

KS

[SAYHEYRENEE]

I wish I could help you. I just made final payment a week prior to Carnivals date at the request of the company. They asked just so they had time on their end to process in time. Carnival is the recepient on my visa not the agency.

[Ronath]

When we use a credit card for cruises the charge is usually paid directly to the cruise line; sometimes the travel agency may want final payment 45-60 days early so they can have it in the the cruise line on time. Your payment should have been directly to the cruise line I would think. The only other occasion I can think of is when we've paid in cash (we only use our local travel agent) our travel agent has used her company credit card to pay the balance and we in turn paid her company. Don't know why your card would be charged to the travel agent otherwise.

[mjnieme]

Our TA does a similar thing for us, but it is at our request. We make payments to our TA and they keep it on account for us. Then as the bills become due she pays them.

[GoinCruisin]

Are you booked on a group cruise??? Our group cruise final payments are usually due 30 days prior to when they are usually due to the cruise line... I believe they do this because they have to get everything together, make sure everything gets to the cruise line on time, and allow for any problems....

[Leona1]

I would call your agent and ask why your FP was charged to them not the cruiseline. I am an agent and all cruises that I book are charged directly to the cruiseline except if the client pays by check.

 

Leona

[serene56]

I agree with going Cruisin. sounds like you are booked with a group and that payment is always due 90 days before cruising instead of the 70.

[KS Sunflower]

Thanks for your responses. I left a message for my agent to call me. The cruiseline states that the final payment is due 75 days prior to the cruise, but the cruise agency wanted payment 120 days prior. I'm thinking that the agency deposits the money in an interest bearing account for 45 days.

 

In the future, I will probably book directly with the cruiseline.

[GoinCruisin]

Thanks for your responses. I left a message for my agent to call me. The cruiseline states that the final payment is due 75 days prior to the cruise, but the cruise agency wanted payment 120 days prior. I'm thinking that the agency deposits the money in an interest bearing account for 45 days.

 

In the future, I will probably book directly with the cruiseline.

 

If the agency booked you as part of a group, to get you better pricing, then the final payment date would be 30-45 days sooner than what is requested by Carnival. Interest on that amount for 30 days wouldn't amount to much...

[Snowball]

I would be more concerned with the the final payment being shown as taken under the agency's name, when it should be taken out by the cruiseline. I think it is becoming a standard practice, especially for group bookings, for the t/a's to request that final payments be made several weeks before the actual due dates - that way they can try to track down people that haven't paid before the reservations are cancelled.

[GoinCruisin]

I would be more concerned with the the final payment being shown as taken under the agency's name, when it should be taken out by the cruiseline. I think it is becoming a standard practice, especially for group bookings, for the t/a's to request that final payments be made several weeks before the actual due dates - that way they can try to track down people that haven't paid before the reservations are cancelled.

 

I agree, that would concern me much more than the date of the payment... the final payment HAS to be made.. 30 days doesn't matter much to me, 45 doesn't either for that matter.. but the fact that it isn't the cruiseline is weird. We always book through one of Cruise Critic's preferred agencies and the charge is always made by Carnival.

[KS Sunflower]

I agree, that would concern me much more than the date of the payment... the final payment HAS to be made.. 30 days doesn't matter much to me, 45 doesn't either for that matter.. but the fact that it isn't the cruiseline is weird. We always book through one of Cruise Critic's preferred agencies and the charge is always made by Carnival.

 

GoinCruisin,

 

I guess I didn't make myself clear. I am very concerned that the agency charged my credit card and not the cruiseline.

 

The agency is one of Cruise Critic's preferred agencies. A lot of group cruises are booked through them.

 

I am still waiting for a call from my agent. She isn't very good about returning phone calls or answering emails. I am going to call the owner of the agency.

 

KS

[molme]

Check the CCL website under My Reservation to see if the final payment has been posted to your booking. You will need your booking number to do this.

[KS Sunflower]

Just a followup... I finally received an email from my agent and she said, "the final payment is charged by the agency because Carnival requires that the group be paid in one payment and not individually. They also require that the payment be prior to the 90 days, so the group can be finalized."

 

I asked her if we were part of a group, with a leader, and she said no, they just sold the space that way, no actual group has been organized.

 

I have asked that they send me confirmation, when they pay the final payment, to the cruiseline.

 

KS

[Snowball]

I finally received an email from my agent and she said, "the final payment is charged by the agency because Carnival requires that the group be paid in one payment and not individually. They also require that the payment be prior to the 90 days, so the group can be finalized."

That simply is not true. I am on my 3rd group cruise now, and every payment I've ever made, from initial deposit to final payment, has been charged by Carnival - not the t/a.

[Guest nhrich]

Just a followup... I finally received an email from my agent and she said, "the final payment is charged by the agency because Carnival requires that the group be paid in one payment and not individually. They also require that the payment be prior to the 90 days, so the group can be finalized."

 

I asked her if we were part of a group, with a leader, and she said no, they just sold the space that way, no actual group has been organized.

 

I have asked that they send me confirmation, when they pay the final payment, to the cruiseline.

 

KS

There's something fishy about this. We've booked many groups with Carnival and have done final payments for the group members individually, and the credit card payments are all charged by Carnival. Also, we've never had a difference in the due date for groups vs. individual bookings.

 

Rich, ACC

Carefree Vacations

[GoinCruisin]

True, paid for 4 group cruises, through Cruise Critics primary agency, and every one of them, the payments have been listed as Carnival, not the agency... If you have a concern, I would ask to speak to a supervisor... definitely doesn't sound right.

 

Now, with the due date, that sounds right... in all our group cruises, the due date is about 30-45 days before it would be due outside of the group...

[babs275]

Sounds to me like the agency wanted to be able to pay the cruise line the net amount due and get their commission upfront instead of waiting for it to be issued back to them. They also have the use of your money for that time to utilize "the float" - maybe that is how many of the online TA's are able to offer the discounts. Sounds dangerous to me.

[serene56]

Check the CCL website under My Reservation to see if the final payment has been posted to your booking. You will need your booking number to do this.

 

 

Please dont do this to check your payments.. Its not updated a lot of times and if you dont see a payment here-- could set you in for a panic mode.

 

I have booked a group cruise in Febrary and its almost paid off in full--the only thing it shows is my deposit.

 

When you look at your bank statment... who is the payments made to?

[bluesramsrock]

Thanks for your responses. I left a message for my agent to call me. The cruiseline states that the final payment is due 75 days prior to the cruise, but the cruise agency wanted payment 120 days prior. I'm thinking that the agency deposits the money in an interest bearing account for 45 days.

 

In the future, I will probably book directly with the cruiseline.

 

 

I saved over $200 by not booking directly with the cruiseline. I'm willing to let someone hold my money for a little longer for that difference.

 

Mike

[cruiseco]

They also have the use of your money for that time to utilize "the float" - maybe that is how many of the online TA's are able to offer the discounts. Sounds dangerous to me.

 

Say your cruise fare is $1000. If I'm the TA and I'm making 15% commission on the booking my net will be $150. If the client pays by credit card and I have the cruise ine make the charge I'll have that full amount in about 60 days or less.

 

But now I decide to charge the payment on my own merchant account that's costing me a 2% fee (that's probably a little high but it makes the math easier). 2% of the $1000 is $20 that I'll have to pay to get my money right away instead of waiting 60 days.

 

That $20 represents about 13% of the original $150 commission. That's 13% over a 60 day period. Maybe some finance wizards can help me here but 13% for 60 days is like 70% annually. Ouch. With interest rates at about 2.5% - 4.0% on an annual basis I would have to leave that $130 in the bank for something like three years to get that $20 back and even longer to make any mney on the deal. And remember, for this to make sense I'd have to earn that full $20 back within the 60 day period when I would be getting the full $150 back anyway.

 

In short, there's no way that it's ever to the agency's economic advantage to use their own merchant account to process run of the mill cruise payments. Unless, of course the agency needs IMMEDIATE cash flow and is willing to pay loan-shark rates to get the commission in-house 60 days earlier.

 

There are several cases where the agency might want o do it anyway. Perhaps they have sold some old group space that they're holding at $800/cabin. The general reservations prices have gone up to $1200. They sell it to you for $1000. They make their regular commission on the actual group fare (let's say 15% of $800 = $120) PLUS they get to keep all of that additional $200 for a $320 total commission on the booking.

 

However, the cruise ines don't like paying that 2.0% merchant fee either so they are reluctant to accept credit cards for more than the gross cruise fare due. In this case the $800. The agency can have the cruise line charge the $800 and they take the other $200 on their own merchant account. But that looks stupid and raises questions. The smart thing to go is to charge the full $1000 on the agency merchant account. So what if they pay 2% as a fee? They've made a killing on the whole deal.

 

Actual cruise fare: $800

Commission @ 15%: $120

Bonus: $200

Less 2% X $1000 = $20

Total profit: $300 That's a 38% commision even with the fee.

 

Nice money if you can get away with it.

[gumdrop38]

I wonder if since you have been booked as a part of agency booking.....

I wonder if you are getting perks???

Someone is...If they dont have a leader?? Did they disount your fare??

[JerseyShore64]

Say your cruise fare is $1000. If I'm the TA and I'm making 15% commission on the booking my net will be $150. If the client pays by credit card and I have the cruise ine make the charge I'll have that full amount in about 60 days or less.

 

Actual cruise fare: $800

Commission @ 15%: $120

Bonus: $200

Less 2% X $1000 = $20

Total profit: $300 That's a 38% commision even with the fee.

 

Nice money if you can get away with it.

 

In certain states direct pay to an agency is against the law. However, the simple solution is they are calling the payments in early for bookkeeping reasons. Here is why... You have a group that is slow pay or difficult pay, cancellation penalty and name change penalty is before final payment. If they know ahead of time, they can sell this space and make it before the deadline. THIS IS NOT SOMETHING I BELIEVE IN... However, in the past 22 years, I can honestly tell you, groups are the first to not pay and have difficulties right up to the very end.

 

As for your commission structure you listed, the highest I could have possibly made was 240.00 including bonus commission, so I want to work for you!<smile>

[mellowgirl]

KS Sunflower - Definitely sounds fishy. I have a group cruise booked to sail in Dec. with Carnival and final payment is due 60 days before sailing. That is Carnival's requirement for this cruise. I have not heard of Carnival requiring one payment for a group cruise!!!! How in the world would I be able to pay for 100 cruisers out of my account? Now, I do ask for payment about a week prior to the deadline so I can get everything processed and in to the supplier on time. But it is NOT all in one payment.

 

Travelers' money NEVER goes into my account - all payments are made to the travel supplier. There is no need for their money to even see my account. I don't even want the appearance of impropriety!!! That's a questionble action for sure.

 

Have you called the cruiseline to validate what your agent said? They may need to know about this agency's practice. Maybe you could find a local travel agent rather than going with the cruiseline directly.

[mellowgirl]

Kymbi - if what you said is true why didn't the agent tell KS that? It sounds like her agent is blowing smoke.