The tourism booking company came under fire for charging customers to cancel bookings they were unable to use due to Covid-19 travel restrictions.
One couple spoken to by the Herald were charged a $1436 cancellation fee on a $2328 holiday, booked in November last year through Flight Centre in Fielding.
They were planning to take Flight Centre to the Disputes Tribunal and complained to the Commerce Commission.
Similar cancellation fees had been the subject of hundreds of complaints on a Facebook page set up by aggrieved customers, with some claiming to have lost tens of thousands of dollars.
A Change.Org petition set up to get Flight Centre to relax or waive the cancellation fees had attracted thousands of signatures.
This week the company announced a $700 cap on cancellation fees for bookings, but today managing director David Coombes said they would be taking it a step further.
"We have listened to feedback - both positive and negative - and made a further amendment to our refund policy to address one of the key ongoing concerns - our cancellation processing fee."
He estimated they would be refunding about 15,000 bookings due to Covid-19 impacts, and waiving their cancellation fees would cost the company an estimated $7 million.
The waiver would apply in situations where the third party supplier, usually the airline, has cancelled the service that was booked for the customer.
The fee waiver would only apply to those from Flight Centre, and not from airlines nor third party suppliers.
Coombes said they saw this as "an investment in the company's customers who are under considerable stress, caused by financial uncertainty as a result of the significant impact of Covid-19".
The compay was also "well placed" financially to weather a prolonged downturn in demand resulting from unprecedented and unforeseen government restrictions on travel and trading, he said.
The previous cancellation policy was in line with requirements set by the NZ Commerce Commission, and the move has not been made for fear of legal action, Coombes said.
"While our decision to waive fees will cost our business significantly in lost revenue for work that has already, and will continue to be done by our people, we believe it's the right thing to do under current economic conditions where stand downs and job losses are a daily occurrence for many Kiwis, regrettably including our own people."
Not all travel agencies would be in such a position to waive their fees, and Coombes said it was important Kiwis understood the "considerable costs" associated with servicing the travel industry's customers, with very little revenue coming in to cover those costs.
"I urge the Commerce Commission and Consumer NZ to work with us to understand this situation.
"A robust agency community will be in the best interests of Kiwi customers when we are travelling again."
As Flight Centre had no control over the time taken by third party suppliers to process refunds, they could take between three and six months to process due to demands.
"We are negotiating to secure funds sooner, and ensuring our internal processes are faster, however we do not have complete control over this part of the
process," Coombes said.
Where third party suppliers, usually airlines, have not yet cancelled their service, customers could still decide to cancel, however Flight Centre cancellation fees will apply.
