Ticket refunds exceed costs says ORR

An Office of Rail and Road review into the cost of ticket refunds says passengers pay up to £3.19 more than the costs involved.

The review was based on data from train operators and third-party retailers from 1 April 2019 to 31 March 2020 in which 5.8 million fares were refunded. It found the average administration fee was £6.96 per ticket – against average costs of £3.77. Fees are capped at a maximum of £10. However, because 28% of potential administration fees were waived during 2019/20, the average administration fee per ticket was £4.63.

‘ORR has concluded that, where retailers are charging £10, this appears not to be based on an assessment of costs,’ the regulator says. 

ORR Deputy Director for Consumers Stephanie Tobyn said: ‘With 92% of refund claims now submitted electronically and almost all refunds paid out by bank transfer or card payment, we’re asking retailers to assess whether their administration fees for ticket refunds are cost-reflective and reasonable.

‘We are working with DfT and the Rail Delivery Group to ensure these findings are taken into account when considering whether the maximum caps for administration fees, particularly the current £10 cap in respect of ticket refunds, should be lowered.’