ARC Debit Memo Working Group to Standardize Reason Classifications in 2015

Significant Decrease in Debit Memos is Ultimate Goal of Working Group

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Feb 09, 2015, 11:15 ET

ARLINGTON, Va., Feb. 9, 2015 /PRNewswire/ -- In its continued effort to lessen the number of debit memos processed between airlines and travel agencies, the ARC-facilitated Debit Memo Working Group Steering Committee (DMWG) will focus their efforts in 2015 on standardizing the reasons under which debit memos are issued. Normalizing reasons is key in allowing a more accurate analysis of why debit memos are issued, which is currently a challenge due to the myriad of diverse reason terms used throughout the industry. The ultimate goal of this effort is the reduction of debit memos.

In 2014, nearly one-half million debit memos worth $138 million were issued. Half of those memos were related to fares, taxes or commissions. But, because these general categories did not classify a particular issue, it is virtually impossible to identify where precise action can be taken to reduce or eliminate specific debit memos. The DMWG will work this year to create two-tier reason categories to remedy this issue.

"From an agency perspective, standardizing the reasons why memos are issued will be of great value," said Shannon Keever, debit memo reconciliation manager at Altour. "Once established, it will speed up the memo resolution process as less time will be spent analyzing and requesting clarification for specific disputed memos. Knowing exactly why a debit memo was issued will also help us determine where to focus our agent training and maximize our auditing and quality control tools."

The DMWG decided to standardize reasons at their October 2014 meeting held at the ARC Travel Connect conference in Washington, D.C. At that time the DMWG felt, for example, that the category labeled "Incorrect Commission" was too broad a term. Some proposed solutions to narrow the reason were, "commission on original ticket," "commission on exchange ticket," and "commissionable-incorrect calculation." Among sub-categories suggested for commission-related reasons, "tour code/ticket designator," "routing," "class of service," and "interline." Specific terms as these will be expanded throughout the debit memo process as the year progresses.

"Delta supports the ARC DMWG as part of our commitment to build and maintain strong relationships with our travel partners," said Tim DeLaney, manager of revenue recovery at Delta Air Lines. "The DMWG is an excellent forum for open and honest communication between carriers, agencies and global distribution partners. Delta's culture supports innovative solutions and we will continue to participate in these discussions."

The DMWG is comprised of representatives from stakeholders and other interested organizations from across the industry. These include 10 airlines that issue the majority of debit memos, travel agencies ranging from sole proprietorships to mega-size, IATA, GDSs, ATPCO, and ASTA.

About ARC:
ARC powers the U.S.-based travel industry with premier business solutions, travel agency accreditation services, process and financial management tools, and powerful data analytics. In 2014, ARC settled $89.6 billion worth of carrier ticket transactions for more than 9,400 travel agencies with 13,000 points of sale. By providing world-class business services and products,

ARC enables participating agencies and 200 carriers to focus on what's important—increasing their revenue. Established in 1984, ARC is headquartered in Arlington, Virginia. For more information, please visit www.arccorp.com.

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