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Is it safe to accept a credit note for your cancelled holiday?

Updated 26 January 2021

If your holiday package has been cancelled you’re entitled to a cash refund, but your travel company might ask you to re-book or to accept a credit note for your cancelled holiday instead.

The credit note is effectively an IOU which you can use to re-book another holiday or you can cash it in later.

You don’t need to accept a credit note, you’re legally entitled to your money back. But you’ll be helping your tour operator with their cash flow if you do.

Also, you might be offered an incentive to accept a credit note, such as an additional 10%.


But is it safe to accept a credit note for my cancelled holiday?

After much dithering, the Government announced last year that it would protect credit notes issued by ATOL-registered tour operators until the end of January.

It has now extended this protection to credit notes issued up to 31 March 2021. ABTA has also extended protection for credit notes issued up to the end of March for non-flight packages.

This means that your credit note will have the same financial protection as your original holiday.

So you’re guaranteed to get your money back from the ATOL scheme or from ABTA if your travel company goes bust.

But the financial protection for credit notes only lasts until 30 September 2021.

If you have a credit note you should make sure you use it to book another holiday or exchange it for cash by the end of September.

The Civil Aviation Authority, which manages the ATOL scheme, says all credit notes must come with the option to exchange them for cash.

Further details of the conditions for refund credit notes can be found on the CAA website.


Is it better to request a cash refund?

I don’t see why you’d accept a credit note unless your tour operator is offering a financial incentive.

Even if it does, there’s a risk your tour operator will bump up the price of its packages by as much or more than the incentive.

Before you accept a credit note, I think you should research future holidays and compare prices with other operators.

You might find the same or a similar holiday cheaper elsewhere, in which case you might as well ask your operator for your money back.

But if you’re confident you can get a good deal from your tour operator on a future holiday, there doesn’t seem any harm in accepting a credit note.

Like I said, you’ll be helping your tour operator and possibly even helping ensure its survival if you do.


Linsey McNeill

A journalist and travel writer of 35 years' standing, a once-a-week yogi, terrible skier and out-of-order mum to 2 teens. Previously Editor of, bylines also include The Telegraph, The Times, The Observer, the London Evening Standard, Which? and The South China Morning Post.

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