The ease of setting up an internet business also makes it easy for some companies to be a less than reliable online provider, as seen by the December collapse of travel provider Bestjet.

Here's what to do if you click “purchase” online and then never receive what you were promised.

The Bestjet collapse, which has left more than 10,000 travellers out of pocket and creditors owed as much as $30 million, is the latest in a series of examples in which innocent customers have lost money to internet businesses, and why you should always be wary of super cheap online 'deals'.

It also highlights why price should never be the dominant factor when it comes to choosing who you spend your money with: always ensure you are dealing with a reputable business.

That said, mistakes happen. So what should you do if you're affected?

Are you entitled to a chargeback? Can you claim credit card fraud? Does your personal/corporate travel insurance cover travel agent financial collapse?

In this article we'll provide you with a mix of risk mitigation strategies and insurance solutions that will help to protect you against losing money when making travel purchases online.

“Price should never be the dominant factor when it comes to choosing who you spend your money with: always ensure you are dealing with a reputable business”

1. Always do your research

What's that old saying? If it looks too good to be true, it probably is.

If you see a deal online that's better than the rest, you need to ask yourself why. If you are a small business it is worth questioning who you book your travel with.

Perhaps the business is running on the smell of an oily rag, maybe they don't always deliver the goods or services, or they might be about to go belly up.

Whatever the reason, before hitting the “purchase” button you should always spend at least a few minutes doing a Google search of the company (+ reviews) to see what other customers are saying about them.

In the case of Bestjet, a 30-year-old Brisbane man who purchased flights to Japan in December through them had this to say to Steadfast:

“We bought the tickets and they charged our card with a notification that the tickets would be emailed to us within 72 hours. When we didn't receive the tickets we emailed them. No response. Emailed again, still no response. All the phone menu options looped back to the main menu,” he said.

“Two weeks later still no tickets. Had I simply looked at their reviews beforehand I would have known they were circling the drain. Saving a few bucks by going through them was a mistake. Lesson learned. Always check the reviews.”

For those affected by the Bestjet collapse a Facebook group has been set up to provide advice and updates, while the ACCC provides valuable information for consumers affected when a business goes belly up. Alternatively you can contact the consumer affairs agency in your state.

If you would like to be placed as an unsecured creditor you can email Bestjet’s administrators at bestjetgroup@pilotpartners.com.au or follow the instructions outlined in the administrator’s notice.

You can also reach out to your airline to confirm your booking, or contact your travel insurer to seek a refund.

If you or your employees travel for work, the right Corporate Travel Insurance can ensure you are covered for financial losses caused by situations like this and others including overseas health emergencies, flight cancellations, lost deposits or lost and stolen baggage.

Small businesses can also check their Trade Credit Insurance for any trade creditors they are dealing with that could go into liquidation.

2. Initiate a chargeback with your bank

Ok, so you've messed up and purchased something with an unreliable online retailer and the goods never arrive.

What next?

Well, rest assured you have a couple of options at your disposal.

The quickest and easiest is to immediately get in touch with the bank you made the purchase through, to inform them of what's taken place and that you'd like to initiate a 'chargeback'.

“Chargebacks are much easier than I envisaged,” said the Brisbane man, “you just get in touch with your bank and they pretty much take care of it for you – if they can.”

“My bank also informed me that if Bestjet made good after the chargeback, I could still walk away from the deal as they had their chance. So I could rebook my tickets immediately through another provider without the fear of having two tickets.”

3. Purchase insurance

Not every travel website or agency you book through will display warning signs that it might be about to collapse, warns John Clark, Steadfast's Broker Support Manager.

“It's not impossible that other more established travel agencies will go broke. It's an industry with continually marginal offerings,” he explains.

It's also worth noting that many people purchase cheap flights and holidays months in advance to save dollars. And the further out you purchase the tickets, the more time the company has to go bust.

Clark says one solution is to buy a Personal or Corporate Travel Insurance policy that provides cover against the failure of a travel agent or business.

“There are some travel insurance policies that cover against the failure of the travel agent. But it might limit some other coverages, such as skiing – so it's a bit of a balancing act,” says Clark.

“It's definitely something worth discussing with you local Steadfast broker in advance to ensure you're covered for everything that you need during – and leading up to – your trip.”

Important disclaimer - Steadfast Group Limited ABN 98 073 659 677, its subsidiaries and its associates.

The views expressed are those of the author only and do not necessarily reflect those of Steadfast.

This magazine provides information rather than financial product or other advice. The content of this magazine, including any information contained on it, has been prepared without taking into account your objectives, financial situation or needs. You should consider the appropriateness of the information, taking these matters into account, before you act on any information. In particular, you should review the product disclosure statement for any product that the information relates to it before acquiring the product.  

Information is current as at the date articles are written as specified within them but is subject to change. Steadfast, its subsidiaries and its associates make no representation as to the accuracy or completeness of the information. Various third parties, including Know Risk, have contributed to the production of this content. All information is subject to copyright and may not be reproduced without the prior written consent of Steadfast Group Limited.