Is “No Refund” Legal When a Visa Is Denied?

Travel Agency Rules in the Philippines

Executive summary

A Philippine travel agency or tour operator may lawfully impose a “no refund” rule when a visa is denied if (1) the rule was clearly disclosed before you paid, (2) it is not deceptive or unconscionable, and (3) it does not contradict mandatory law or public policy. Even where the tour or ticket is “non-refundable,” government-imposed taxes/fees and unused third-party charges are often refundable, and agencies must avoid misleading sales practices. The bottom line: some money can be legitimately kept (e.g., service fees, supplier penalties already incurred), but blanket, catch-all forfeitures are risky and may be struck down or moderated.

This article provides general information, not legal advice for a specific case.

The legal building blocks

1) Freedom to stipulate—with limits (Civil Code)

Parties can set their own terms (e.g., “non-refundable on visa denial”), but stipulations cannot be contrary to law, morals, good customs, public order, or public policy.
Contracts of adhesion (pre-printed agency forms) aren’t automatically void, but ambiguous or oppressive clauses are construed against the drafter. A “no refund for any reason whatsoever” line hidden in fine print is vulnerable.

2) Consumer safeguards (Republic Act No. 7394, Consumer Act)

Deceptive or misleading sales practices are prohibited. If the sales pitch suggests “worry-free visa” or “full refund if visa denied,” the agency cannot rely on a buried “no refund” clause to reverse that promise.
Unfair or unconscionable acts are also prohibited. Clauses that cause excessive, one-sided forfeiture (e.g., keeping 100% when the agency’s real loss is minimal) can be challenged.
For goods, “No Return, No Exchange” signage is unlawful. For services (like travel), the principle still applies by analogy: you cannot mislead or strip consumers of statutory protections.

3) Sector regulation (Tourism framework)

Travel agencies/tour operators are typically accredited under tourism regulations. Accreditation standards emphasize truthful advertising, clear disclosures, and ethical dealing. While these rules don’t guarantee refunds, they amplify consumer expectations of transparency and can be referenced in complaints.

How “no refund” plays out across common scenarios

A) Air tickets booked through an agency

Non-refundable fares are standard. A visa denial is a personal contingency, not airline fault. If the fare is non-refundable per airline rules, the base fare can be forfeited.
Still, you may recover refundable government taxes/airport fees and some airline-imposed charges if unused. Many airlines allow tax-only refunds even on non-refundable tickets; the agency may deduct an administrative fee if this was clearly disclosed.
Rebooking may be allowed on certain fare families (with fees/fare difference). Agencies should disclose these options at purchase.

B) Tour packages (bundled flights/hotels/transfers)

Packages are governed by supplier terms (airline, hotel, ground operator) + agency terms. If suppliers impose cancellation penalties or strict non-refundable rates, those amounts may be withheld upon visa denial if you agreed upfront.
However, undelivered components with refundable supplier terms (e.g., a hotel rate that allows cancellation until X date) should be passed back to you, minus disclosed fees.
Catch-all forfeiture (keeping 100% of the package price) is more vulnerable when the agency has not yet paid suppliers or when supplier terms actually allow refunds.

C) Visa assistance/processing fees

Professional/service fees for visa counseling, document checking, scheduling, couriering, and the like are typically earned upon performance and are non-refundable once the service is rendered—regardless of visa outcome—if this is clear in the contract.
Government visa fees paid to a foreign embassy/visa center are generally non-refundable once lodged. Agencies should itemize these so you can see what’s irretrievably paid to third parties versus the agency’s own fee.

D) Travel insurance with “Trip Cancellation”/“Trip Curtailment”

Some policies cover visa denial, but many exclude it or cover only specific reasons (e.g., illness, disaster). Where available, insurance may reimburse non-refundable prepaid costs.
Agencies that represent a benefit (e.g., “covered if visa is denied”) should ensure the policy actually provides that coverage and hand over the policy wording.

What must be disclosed—and how

To make a “no refund on visa denial” clause defensible, agencies should:

Present the clause conspicuously before payment (not just in a long PDF after checkout).
Explain the rationale (e.g., “airline fare is non-refundable,” “hotel is an advance-purchase rate,” “visa fee is non-returnable,” “our service fee is earned upon submission”).
Break down the price (base fare, taxes, supplier penalties, agency service fee).
Offer options (rebooking, name/date changes if allowed, tax-only refund, or credit).
Document consent (signed order form, checkbox with timestamp, emailed terms acceptance).

Lack of clear, pre-payment disclosure is a red flag.

When “no refund” becomes problematic

Ambiguity: The rule exists but is buried, tiny, or contradicted by verbal assurances.
Overbreadth: “Absolutely no refunds for any reason” even if no cost was incurred or a component is actually refundable from suppliers.
Double-dipping: Agency keeps your money and also gets supplier refunds or credits.
Misrepresentation: Sales talk promised “refundable if visa denied” or “guaranteed visa,” but the written terms say otherwise.
Excessive penalties: Keeping 100% for minimal admin work can be attacked as unconscionable.

Courts and regulators often moderate liquidated damages or forfeiture if they’re punitive rather than compensatory.

Practical playbooks

For consumers (travelers)

Ask for fare and package rules in writing before paying. Look specifically for terms on visa denial.
Request itemization (base fare, taxes, supplier penalties, agency fee).
Check rebooking paths and deadlines; sometimes a partial salvage beats a fight.
If denied a refund, demand a computation: what did the agency actually pay out, what’s truly non-refundable, and what part is the agency fee?
Escalation ladder: (a) polite written demand with supporting documents, (b) negotiate for partial refund, credit, or rebooking, (c) file a consumer complaint (DTI for unfair sales practices; tourism accreditation body for ethical breaches), (d) small claims or regular court for amounts in dispute.
Explore tax/fee refunds through the airline or relevant authority if the ticket went entirely unused.

For agencies (compliance-minded)

Write visa-denial-specific terms: e.g., “If visa is denied, the following apply…” with a table of refundable vs. non-refundable components.
Use cost-reflective fees: Forfeitures should track real exposure (supplier penalties, time already spent).
Train staff to avoid absolute promises; never imply a visa outcome.
Offer alternatives: tax-only refund, rebooking, transfer to another date/destination if suppliers permit.
Keep records of supplier penalties and refund eligibility to justify retention.

What is commonly refundable vs. non-refundable (quick reference)

Charge/Component	Typical Outcome on Visa Denial	Notes
Airline base fare (promo/non-ref)	Forfeited	Per fare rules; not airline fault.
Government taxes & terminal fees (unused)	Often refundable	Less admin fee; process through airline/agency.
Airline surcharges (unused)	Sometimes refundable	Depends on carrier rules.
Agency service/processing fee	Non-refundable if service delivered & disclosed	Should be reasonable and pre-agreed.
Visa fee paid to embassy/VAC	Non-refundable	Once lodged.
Hotel (advance purchase, non-ref)	Forfeited	If supplier rate is truly non-refundable.
Hotel (flexible rate)	Refundable per cutoff	Refund/credit if cancellation window met.
Travel insurance premium	Usually non-refundable	Coverage terms vary; some offer cooling-off before policy start.
Tours/transfers (local supplier)	Depends on supplier penalty	Pro-rate based on actual cost incurred.

How to challenge an unfair “no refund” claim

Step 1 — Gather evidence

Quotation, booking confirmation, terms & conditions, receipts.
Screenshots of website pages/ads.
Visa refusal letter and date (to show timing vs. penalty windows).
Any emails or chat where staff addressed “visa denial” consequences.

Step 2 — Write a short demand

Ask for: (1) itemized computation; (2) copies of supplier rules showing the claimed penalties; (3) refund of refundable components; (4) moderation of excessive retention.
Give a clear response deadline (e.g., 5–7 business days).

Step 3 — File a consumer complaint (if needed)

DTI for deceptive/unfair sales practices and misleading advertising.
Tourism/accreditation channel for ethical/standards issues with the agency or tour operator.
Airline directly for tax-only refunds if the agency is unresponsive and the ticket was unused.
Card chargeback may be viable only if there is misrepresentation or non-delivery—not merely a denied visa.

Step 4 — Consider small claims

For moderate sums, small claims can be faster and cheaper than full litigation. Bring the paper trail and a concise computation showing what should be refunded.

Model clauses (better practice)

Fair, clear version (recommended):

If a visa is denied, the client may: (a) rebook subject to airline/hotel rules and fees; or (b) request a refund of refundable components. The following are non-refundable once rendered/paid: (i) agency service fee (₱), (ii) embassy/VAC fees (₱), and (iii) supplier penalties actually imposed (itemized below). All government taxes/airport fees on unused tickets that are refundable by the airline will be returned net of an administrative fee of ₱____. Copies of supplier rules will be provided upon request.

Risky, overbroad version (avoid):

All payments are absolutely non-refundable for any reason whatsoever, including visa denial. This reads as punitive and is more likely to be contested as unconscionable.

One-page traveler checklist (visa denial risk)

□ Ask: “What happens if my visa is denied?” Get it in writing.
□ Look for a visa-denial clause—not just a generic “non-refundable” line.
□ Request itemized pricing and supplier fare/hotel rules.
□ Consider trip-cancellation coverage (confirm if visa denial is covered).
□ Keep every receipt, chat, and email.
□ If denied, act quickly before supplier penalty windows lapse.
□ Push for tax-only refunds and credits where available.
□ Escalate with a brief, documented demand if faced with a blanket forfeiture.

Short demand letter template (editable)

Subject: Request for itemization and refund of refundable components — [Booking Ref No.] Dear [Agency Name], I refer to my booking dated [date] for [itinerary]. My visa application was denied on [date], and the ticket/package remains unused. Kindly provide within seven (7) business days:

An itemized computation of amounts paid to each supplier;

Identification of non-refundable components with copies of applicable supplier rules;

Refund of refundable components (e.g., unused government taxes/fees, refundable hotel items), net of any disclosed administrative fee; and

Options for rebooking or credit per supplier rules. I reserve my rights under Philippine law against deceptive or unconscionable sales practices. Thank you.

Key takeaways

Legality hinges on disclosure and fairness. Visa denial doesn’t automatically entitle you to a full refund, but neither does it justify total forfeiture.
Non-refundable fares/fees can be kept if they mirror actual costs and were clearly explained.
Refundable components (esp. unused taxes/fees) should be returned.
Documentation and timing are crucial for either side in a dispute.

If you want, I can tailor a clause or demand based on your exact booking details and compute what’s realistically recoverable.