Update on Railcards and Covid

[All Line Rover]

The RDG could not make a decision that would place yet more risk on DfT to make up the current revenue shortfall.

Do the ad-hoc agreements concluded with the DfT cover revenue risk incurred since the onset of COVID, or all revenue risk incurred since the commencement of each franchise?

 

[Bletchleyite]

The RDG could not make a decision that would place yet more risk on DfT to make up the current revenue shortfall.

No, but they could at least have said "regrettably" or similar.

 

[jfollows]

The Guardian has also picked up the story now (https://www.theguardian.com/money/2...british-railcard-holders-denied-covid-refunds). It refers readers to the same place as previously mentioned in this thread, https://www.railcard.co.uk/faq/, which I quote below also.

Millions of British railcard holders denied Covid refunds
Government rules out giving money back or extensions despite travel restrictions

Rebecca Smithers
Thu 1 Oct 2020 15.18 BST
Last modified on Thu 1 Oct 2020 16.25 BST
The UK government has ruled out giving refunds or extensions to the people holding railcards they have been unable to use as a result of the coronavirus pandemic.
The scheme, which offers discounts of about a third on travel, is available to a wide range of groups across Britain – including senior citizens, 16- to 25-year-olds, families and disabled people. It operates in England, Scotland and Wales but not Northern Ireland.
Guardian Money has been deluged with letters from readers – including older people who have been shielding – asking why they were not entitled to refunds or time extensions for cards they have been unable to use.
Most of the cards cost passengers £30 for a year, meaning that refunding the 5.1 million customers who hold them could cost £150m.
The Rail Delivery Group manages the railcard scheme and a spokesperson said: “After careful consideration, the government has confirmed to us that railcards will remain non-refundable and will not be extended. We understand that this decision may not be the news our customers had been hoping for.
“Refunding or extending railcards for over 5.1m customers would come at a significant cost to the taxpayer at a time when the focus must be on maintaining rail services to support the country’s recovery from the pandemic.”
It has provided answers to holders’ questions here.
Anthony Smith, the chief executive of the independent watchdog TransportFocus, said: “Passengers bought railcards in good faith and will be disappointed by the decision not to extend them or offer a discount on renewal to make up for the period when we were encouraged not to travel.
“While the government continues to provide high levels of support to make sure the day-to-day railway keeps operating, it seems a pity some slack could not be given on this issue to encourage people back to rail travel.”

I can't see why this is wrong. My railcard ran out in April, so I didn't renew it as I would have done normally. Now I'll buy a new railcard when I next find a need, which may not be for some while. In precisely 1 year from today I will be eligible for a Senior Railcard, so perhaps that's when I'll buy one.

I guess if my old railcard had expired mid-February, and I'd gone ahead and bought a replacement, as the people selling railcards encourage you to do, I might have been a little more peeved. So in my case the timing worked out reasonably well, if that's the right way to put it. So I can see the point of people who are unhappy. I guess that in the "big scheme of things" it's relatively insignificant and even if I'd paid £30 for a railcard I couldn't then used for six months I would write it off to bad luck, and others might not be able to afford to do so as easily.

(My last train journey was March 12th., and the last train journey on which I was able to use a railcard - Two Together - was March 8th.)

Railcards & COVID
We understand the restrictions due to COVID means some Railcard customers haven’t made all of the journeys they had planned. After careful consideration the government has confirmed to us that Railcards will remain non-refundable and will not be extended.



Why can’t I have a refund or extension?
Refunding or extending Railcards for over 5.1m customers would come at a significant cost to the taxpayer, at a time when the focus must be on maintaining rail services to support the country’s recovery from the pandemic. Please rest assured that this decision hasn’t been taken lightly and was made at the highest level.



I haven’t been able to travel by train so I should get a refund for my Railcard. Why can’t I have one?
Rail services continued to run throughout the pandemic to support key workers and the economy, anyone who continues to travel by train with a valid Railcard can use their Railcard discount on their journey if they are eligible to do so. Many customers can make back the £30 cost of a Railcard in just one journey, which is why they are non-refundable.



Why would the tax payers have to pay for a Railcard refund or extension?
Due to the pandemic far fewer people have been travelling by train. This means that the government is offering additional financial backing to the rail industry so that services keep running to support the economy.



I’ve never used my Railcard so why can’t I get a refund?
When you next travel by train a valid Railcard will save you 1/3 off most rail fares. The cost of buying a Railcard can be made back in just one journey, which is why its included in the Terms and Conditions at the time of purchase.



Why has it taken so long to update customers?
The rail industry and the Government have been working together on numerous proposals to try and find a way forward for Railcard customers. Unfortunately, these conversations take time, especially when they happen at the highest level.



Why can’t the train companies pay for the refund or extension?
Due to the pandemic fewer people have been travelling by train. Funding is currently being used to keep services running to support the economy.

 

[Bletchleyite]

I completely understand the policy. They haven't done it before, either - when they've done "compensatory" things about Railcards it's been to offer them for purchase lasting 18 months rather than 12, and now isn't the time to do that - it really needs to wait until things are more old-normal again.

All they have done is used an incredibly (and unnecessarily) arrogant wording which will get backs right up.

 

[CyrusWuff]

All they have done is used an incredibly (and unnecessarily) arrogant wording which will get backs right up.

Not saying it's right for one minute, but I suspect the choice of wording is somewhat deliberate, unlike the usual "fluffiness" you get from RDG, as is calling out that it's a DfT decision rather than the TOCs. Again, not their normal MO at all.

 

[cb00]

Ridiculous decision, but if you paid for the railcard by card, file a claim with your credit card provider/bank.

The cost to the taxpayer would have been zero. With mandatory agreement of TOCs (who are receiving £billions of our taxes at the moment) announce that all railcards are extended by 6 months from the stated expiry date. Zero cost.

 

[221129]

paid for the railcard by card, file a claim with your credit card provider/bank.

For what? What grounds?

== Doublepost prevention - post automatically merged: 2 Oct 2020 ==

The cost to the taxpayer would have been zero.

False.

 

[py_megapixel]

Worst FAQ page I've ever read. Just repeats the same information over and over again.

It's this kind of anti-consumer attitude that pushes people away from the railway - though at the moment, that's seemingly what the government wants. What a ridiculous situation

== Doublepost prevention - post automatically merged: 2 Oct 2020 ==

False.

Could you elaborate, please?

 

[Starmill]

Could you elaborate, please?

Unless someone's seen a detailed forecast nobody can answer the question of whether net revenue would be the same, higher or lowe. I would suggest therefore unless someone's actually seen one that it's rather pointless because all three are totally plausible. Translating that into the definition that one person holds as 'cost' to the taxpayer (is risk the same as cost? Net cost or gross cost? Etc) will also be tricky given basically no information is provided.

To put it another way I would argue that the point about taxpayer funding has been deployed as an attack line not a serious explanation.

 

[Ianno87]

Unless someone's seen a detailed forecast nobody can answer the question of whether net revenue would be the same, higher or lowe. I would suggest therefore unless someone's actually seen one that it's rather pointless because all three are totally plausible. Translating that into the definition that one person holds as 'cost' to the taxpayer (is risk the same as cost? Net cost or gross cost? Etc) will also be tricky given basically no information is provided.

To put it another way I would argue that the point about taxpayer funding has been deployed as an attack line not a serious explanation.

It certainly seems plausible to me that the DfT/Treasury view is likely to be that most folk given an extension are people who will probably travel anyway, either with a renewed Railcard (justified against the journeys they will make), or at full fare. In other words, giving them a free extension would be a net loss of revenue, even if it is a nice gesture of goodwill.

And, as stated up-thread, with ongoing restrictions it's probably premature to be trying to drive significant additional demand.

 

[Starmill]

It certainly seems plausible to me that the DfT/Treasury view is likely to be that most folk given an extension are people who will probably travel anyway, either with a renewed Railcard (justified against the journeys they will make), or at full fare. In other words, giving them a free extension would be a net loss of revenue, even if it is a nice gesture of goodwill.

This isn't a surprise though. The Treasury view is always that any increase in risk is unacceptable, even though someone has to take risk to earn money. It's why they shouldn't be involved in making such decisions.

 

[35B]

It certainly seems plausible to me that the DfT/Treasury view is likely to be that most folk given an extension are people who will probably travel anyway, either with a renewed Railcard (justified against the journeys they will make), or at full fare. In other words, giving them a free extension would be a net loss of revenue, even if it is a nice gesture of goodwill.

And, as stated up-thread, with ongoing restrictions it's probably premature to be trying to drive significant additional demand.

That attitude will definitely apply to Treasury - look at the language they use about every scenario where an individual doesn't pay the full amount of tax implied by the applicable rate.

 

[Starmill]

And, as stated up-thread, with ongoing restrictions it's probably premature to be trying to drive significant additional demand.

The great irony is that the Treasury needs to see a big increase in demand from today's level and it needs to happen very quickly.

 

[bramling]

Ridiculous decision, but if you paid for the railcard by card, file a claim with your credit card provider/bank.

The cost to the taxpayer would have been zero. With mandatory agreement of TOCs (who are receiving £billions of our taxes at the moment) announce that all railcards are extended by 6 months from the stated expiry date. Zero cost.

It isn’t zero cost though, as anyone who is travelling will either have to pay £30 for a new card, or pay the full fare. Either scenario is money lost to the industry we’re existing cards to be extended.

Not saying that’s right or wrong, but that’s the score.

This of course ignores whether an extended card might have stimulated some demand which wouldn’t otherwise have existed, however no one seems too bothered about that side of things at the moment.

 

[Starmill]

This isn't a surprise though. The Treasury view is always that any increase in risk is unacceptable, even though someone has to take risk to earn money. It's why the shouldn't be involved in making such decisions.

The railway has gone well out of its way to try to insist that people don't travel, increase prices, or to try and make it as unpleasant an experience as possible, by many other means already.

 

[Ianno87]

The great irony is that the Treasury needs to see a big increase in demand from today's level and it needs to happen very quickly.

It needs to happen. I would however dispute whether it should be "very quickly" as it does need to be balanced with keeping Covid in reasonable check. And giving folk who largely would've travelled anyway cheaper fares for free doesn't raise revenue.

 

[AM9]

It isn’t zero cost though, as anyone who is travelling will either have to pay £30 for a new card, or pay the full fare. Either scenario is money lost to the industry we’re existing cards to be extended.

Not saying that’s right or wrong, but that’s the score.

This of course ignores whether an extended card might have stimulated some demand which wouldn’t otherwise have existed, however no one seems too bothered about that side of things at the moment.

I agree, I can't understand why there is all this invective about it. It is intended to be mostly a leisure product to give (up to 1/3) discount on non-commuter travel. Anyone who has a reliance on the discount from their railcard for their 'essential' travel wouldn't have lost anything, - unless service cancellations made it impossible to travel. If the available service was unreliable, they would still have the same discounts and if appropriate, delay repay claims would be as normal.
I would say, virtually all other rail travel would be discretionary/leisure over the 4-5 months when non-essential rail travel was actually heavily discouraged, so depending on when their card expires, arguably their loss would be a maximum of £12.50, hardly worth making a fuss about considering the losses that many have suffered elsewhere in the same period.

 

[Starmill]

It needs to happen. I would however dispute whether it should be "very quickly" as it does need to be balanced with keeping Covid in reasonable check. And giving folk who largely would've travelled anyway cheaper fares for free doesn't raise revenue.

See many other threads and pages upon pages of discussion on the subject. Currently rail is almost as unattractive as it could be without just closing down.

General assumption that people who are or recently were railcard holders are travelling by rail 'anyway' is also certainly not valid. It's beyond doubt that leisure traffic such as the market is has shifted away from the railway.

 

[GB71]

See many other threads and pages upon pages of discussion on the subject. Currently rail is almost as unattractive as it could be without just closing down.

General assumption that people who are or recently were railcard holders are travelling by rail 'anyway' is also certainly not valid. It's beyond doubt that leisure traffic such as the market is has shifted away from the railway.

I think Starmill is spot on; my 2 together expires this month. To be honest I luckily got more than the £30 on discounted fares pre-lockdown. I have no intention of renewing at present or anytime in at least the next 6 months as I have got no plans for leisure travel by rail at the moment so an extension would probably be useless and a reduction wouldn't make us renew.

I say this with sadness as someone who has used the rail network extensively for 35 years but the industry faces massive challenges and railcard refunds/extensions/discounts are not for me going to make much difference right now

 

[Ianno87]

See many other threads and pages upon pages of discussion on the subject. Currently rail is almost as unattractive as it could be without just closing down.

General assumption that people who are or recently were railcard holders are travelling by rail 'anyway' is also certainly not valid. It's beyond doubt that leisure traffic such as the market is has shifted away from the railway.

But it's leisure travel that has been by a mile the strongest returner so far (compared to business and commuting).

 

[Starmill]

But it's leisure travel that has been by a mile the strongest returner so far (compared to business and commuting).

Quite. That goes to show just how serious the problem remains.

 

[island]

Ridiculous decision, but if you paid for the railcard by card, file a claim with your credit card provider/bank.

No such claim would be entertained.

Railcards cost under £100 and therefore claims under Section 75 of the Consumer Credit Act are ineligible.

The relevant transactions took place over 120 days ago and therefore claims under the chargeback scheme are ineligible.

 

[HSP 2]

I have just read this thread from post one up until now (post 52), in post #33 the reporter said that it could cost up to £150m for the refunds, well yes if you pay back all of the cost of the railcard. But as only approx. 1/3 of the year has been lost why not just extend the railcard for the 4 months or send out a RTV for £10 only to be used for the purchase of a new railcard.

This would then only cost approx. £50m (that someone already has). The cost would be gained back by goodwill and increasing rail journeys.

 

[thedbdiboy]

What decision was out of RDG's hands? The decision not to refund/extend, or the decision not to use taxpayer money to cover the losses to train operators (and, in turn, their shareholders) resulting from the issue of refunds and the temporary fall in railcard revenue caused by extensions to expiry dates?

I get the feeling that putting out a very blunt, unflattering statement was deliberately done.

After all, if your position were that compensation is neither necessary nor desirable why bother to put out a statement and FAQ? Just tell the person who asked the question that the matter is closed and leave it at that.

I think it’s more likely to be written as an attack.

The decision was made by the DfT, who have to agree all commercial decision making on fares and railcard matters under the ERMA management contracts. Until a seperately funded body is set up that can take policy positions different from Government, RDG isn't going to be publicly allowed to show obvious displeasure at a Government decision (whatever you may have thought of it before, it did have more scope to challenge Goverenment when it was funded through TOCs who weren't on management contracts).