United’s Latest Move, A Game-Changer in the Making?

You may have read in the press that United Airlines will soon begin forcing a small group of travel agents to process credit card purchases of United tickets through their own merchant agreement.  In other words, when you buy a United ticket from one of these agents, the charge will appear on your credit card statement as a charge from the travel agency and not United.  The agency will then have to basically write United a check for the ticket.

The result of this is that United receives all of the cash for the ticket, and the travel agent (and mark my word, ultimately you) will eat the cost of the credit card charge, usually anywhere from 2 to 3 percent (but can be more or less) of the purchase price.  Most normal businesses view these credit card merchant fees as a cost of doing business.  But in an effort to wring the last possible dollar of savings from its operations, United is shifting these costs onto its customers.  Apparently, a limited number of agencies are being impacted by this for now.  I would guess that those agencies are ones that don’t sell a lot of United tickets.

No matter what, this is a bad deal for travelers.  If this sticks, expect it to be matched by United’s competitors soon and possibly expanded to impact many more travel agencies.  If this proves successful in United’s eyes, how long do you really think it’s going to be before they (and their competitors that will surely copycat them) are charging you an extra buck or two when you purchase travel with a credit card directly from them?  Keep your eye on this one.  It bears watching in more ways than one.