MMT Double Black Free cancellation program

Makemytrip has introduced a program called Double Black, under which customers are offered 100% refund if they have to cancel the flights or hotels. You pay an up front amount, which is currently 2499 INR and you get free cancellation on first 5 flights and hotels
A quick look into fine print brings to light following factors customers of MMT Double Black should be aware of.
  1. Free cancellation ONLY on First 5 bookings, not on ANY 5 bookings. Let us say you’ve booked 10 different trips for next 1 year, now need to cancel 6th, 7th and 9th trip. This won’t be supported under MMT Double Black. Only Bookings 1, 2 and 3 are eligible. If these 3 trips happen as per plan, your money is gone. It would have been ideal if MMT had extended the offer to any 3 bookings throughout the membership time. But that would increase MMT's risk profile
  2. Time limitations still apply- you’ve to cancel 24 hours before flight time/check-in time. In case of last minute cancellation, you still lose.
  3. Not valid for premium economy/business/first class
  4. Not valid for international travel
  5. Valid only for member, not for your companion/other passengers in the ticket. If you had 2-3 more people on the PNR, regular cancellation charges and MMT Service fee applies on rest of the passengers
  6. Refund need to be used for future bookings only, no cash out to bank account. At present MMT says there’s no time limit to use the refund amount, but this may change over time, so check fine print carefully (like once scheme becomes popular they may introduce rules like refund wallet amount should be used within X days and so on
  7. Scheme valid for 1 year, after which you've to renew by paying again. Travel date shouldn't be beyond 3 months after membership expiry.
Refund issues: MMT’s facebook page/ad is full of people frustrated with their refund process. Hundreds of people commenting that their refund is not processed yet, even after months, doesn’t really inspire confidence. MMT should clear the grievances of their existing customers to instill confidence that all refunds will be promptly processed without need for lots of waiting or follow up efforts.

MMT also sells individual tickets with 100% refund if you pay about 800-900 rupees extra on select airlines (it was Rs 400 earlier). Normal domestic flight cancellations roughly cost INR 2000-3000 per passenger per flight depending on fare type (economy lite, deal, flexi etc), each airline's policy. Passengers are eligible for full refund if airline changes flight timings or cancels the flight.

How is MMT pulling this off?

I think behind the scene below is what must be happening

MMT would be hopping that not everyone will have the need to cancel their first five bookings. Irrespective of promised 100% refund, it doesn’t make sense to book unless you’ve a reasonable chance of traveling as per plan.
  • You’re paying for MMT Double black membership that costs money, 
  • You would have made other arrangements such as taxi, site-seeing that may not be fully refundable if you can’t travel, 
  • The refund will have to be used for a future booking, without 100% refund facility- so if you can’t travel as per plan second time, you lose money. 
  • Even if MMT’s rates are bit higher than other websites you will be forced to book with MMT
Thus despite the 100% refund promise, making too many bookings without reasonable probability of executing the travel it is not worth. Let us take a possibility that only 1 out of 5 eligible bookings would indeed claim 100% refund. This means MMT has collected a fee of about 2500 per cancelled booking (each member is eligible for max 5 refunds, but unlikely to claim all)

Hotel cancellations are often easy. Because of MMT’s volume, they can convince hotels to allow MMT’s guests to cancel till last day without any significant cost to MMT

Most of MMT’s spending will be on flights only. Normal cancellation charges by airlines is about 2000-3000 rupees. (at times cancellation fee would be more than ticket cost itself.) This is where MMT will have to negotiate hard and force airlines to allow refund on MMT’s tickets by accepting a much lower fee like Rs 500 or 1000. MMT will probably incentivize the airlines to accept reduced cancellation amount against offers like promoting specific airline to Double Black members and so on. This way, of the 2500 Rs collected for Double Black membership, MMT will probably spend only Rs 500-1000 paying to airlines towards cancellation and pocket the rest. The money refunded by airline/hotel won’t be paid back in cash to customer. It will sit in Wallet+. So it is interest free money to MMT till the customer makes another booking (during which customers can be forced to book at higher rate, as they don’t have much options but to use amount in MMT Wallet +). Note that 100% refund policy may not be applicable to this second booking, so if a customer can’t travel as per plan second time, MMT can charge them again lots of money in the name of cancellation charge, MMT service fee and so on.
  • It is not clear if rescheduling is allowed without a fee or paying fare difference. Looks like it is not. After cancellation, if you’ve to book another ticket at now increased fares, your purpose is now only half served.
  • It is not clear if double black members see the lowest fares or a slightly increased prices. There were complaints that those looking to book using MMT Cash were often presented with inflated prices. (one of MMT's schemes included offering Rs 500 MMT Cash on Rs 20 Lays chips packet, to use this 500 MMT Cash people were forced to shell out INR 10000-20000 and on inflated rates)
  • It is not clear if we can club this with any other offer- like 2X money-back guarantee if we find a cheaper fare elsewhere- mostly Not possible
  • It is not clear if 100% refund applies even on promo fares with restricted rules. Since no exception is mentioned, I guess it applies.
  • It is not clear what happens when it is airline’s fault- for example, I book on Jet Airways and Jet Airways cancels the flight- now will my refund go to bank account or MMT Wallet? If Jet Airways takes its own time to process refund, will MMT force us to wait till airline returns the money or will credit our dues instantly?
Disclaimer: I don't know the exact model how it works behind the scene. Do cross check with the brand or other reliable sources. More information will come out as people try out this service and share their experience. I spent 15 mins trying to connect to MakeMyTrips's customer care to get some clarifications. No luck. Eventually had to abandon my pursuit. If they revert with clarifications will update this post.

MMT Double black is kind of an insurance policy. MMT has put in place enough rules n policies to protect its interest and ensure it doesn't suffer any loss in this scheme. MMT stands to gain if very few eligible bookings come up for actual cancellation. If every member cancels all 5 bookings they will probably have to take corrective measures (such as reducing number of eligible bookings for cancellation or increasing subscription fees etc- we'll know this over time)

In summary, MMT Double Black subscription can be worth if
  1. You tend to cancel your flights a lot and have lost lots of money on cancellations- you’d rather lose 2500 rupees than losing large sums on flight cancellation
  2. You’re fine with all other terms n conditions listed above and you trust MMT to honor the promises made in Double Black program.
For hotel booking, I always use booking.com that presents free cancellation and pay at property options. So this pay upfront and get full refund to wallet is an unnecessary scheme for me. Most hotels in most of the destinations will have lots of vacancy- there is no need to fear and book hotel rooms months in advance- it is fine to book once your plans are reasonably confirmed.

OTA market has sort of saturated- too many players and too thin a margin, forcing players to come out with innovative products and solutions, hoping some of them will click.

If you’re really worried about high cancellation fees, refer this post on Airlineblog, where I have listed 10+ ways to deal with high cancellation charges.

2 comments:

  1. That's a big scam. Big websites like this advertise false and cheat the customers. Even I was cheated by Thrillophilia where they didn't refund my money even though the trip was cancelled from their end. Anyways its better to book directly on the airline website than booking through these third party websites

    ReplyDelete
    Replies
    1. Thanks for sharing your experience. Yes, always better to avoid middlemen

      Delete

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