Not all losses in travel are caused by traditional fraud. Policy abuse, refund manipulation and first-party misuse are becoming more prevalent, creating new challenges for airlines and online travel agents. This article explores how these behaviours are evolving and why they require a broader approach to risk.
TL;DR
- Fraud losses in the travel industry historically centred around payment fraud and chargebacks, however, this is now shifting towards first party misuse, and policy abuse
- Airlines and online travel agents
Losses no longer just from payment fraud and chargebacks
While much of the focus in travel has historically centred around payment fraud and chargebacks, a growing share of loss now sits outside those traditional categories, driven by behaviour that may not always fit a strict definition of fraud but still has a direct impact on revenue, operational cost and already pressured margins, particularly as digital journeys make it easier for customers to understand how policies work and where those policies can be stretched, manipulated or repeatedly exploited.
Policy abuse, and first-party misuse increasing prevalence
Across airlines and online travel agents, policy abuse and first-party misuse are becoming far more visible, whether that takes the form of repeated refund claims, exploitation of flexible booking conditions, serial cancellation behaviour or more coordinated activity involving the manipulation and resale of bookings for financial gain, and while individual cases may appear relatively minor in isolation the cumulative impact becomes much harder to ignore when this behaviour is repeated consistently across large customer bases.
What makes this especially difficult to manage is that the activity often sits in a grey area, because unlike traditional payment fraud the customer behind the transaction may not appear obviously malicious, and in many cases the booking itself can look entirely legitimate, which means abuse frequently passes through controls that were originally designed to identify stolen payment credentials or clear indicators of fraud at checkout.
The real issue is rarely a single booking or refund request, it is the broader pattern of behaviour over time, where the same customer repeatedly pushes the boundaries of refund policies, exploits operational flexibility or makes bookings with little genuine intent to travel, creating financial exposure that builds gradually across the customer relationship rather than appearing all at once in a way that is easy to isolate.
Building a strategy not isolated to transaction reviews is a must for travel businesses
This is where many travel businesses are starting to rethink how abuse is identified, moving beyond isolated transaction reviews and building a broader understanding of how accounts interact with booking flows, refund requests, loyalty activity and customer service channels over time, which makes it easier to identify repeat patterns, coordinated misuse and behaviour that consistently falls outside what would normally be expected from a genuine traveller.
There is also growing overlap between abuse and other forms of risk, particularly as the same accounts or customer profiles can be linked to multiple types of activity including account takeover, payment fraud and policy manipulation, which means treating each issue separately often creates blind spots that make harmful behaviour significantly harder to identify early enough.
At the same time, travel businesses cannot afford to respond by simply tightening policies or removing flexibility altogether, because flexible booking experiences, simplified cancellations and customer-friendly refund processes have become an important part of how airlines and online travel agents compete, particularly in a market where customer expectations around convenience and service remain high.
What matters more is being far more precise about how abuse is identified and managed, distinguishing between genuine customers making legitimate use of policies and behaviour that consistently shows signs of exploitation, which allows businesses to reduce unnecessary loss without introducing friction that damages the wider customer experience or weakens the commercial value those policies were originally designed to create.
Understanding which customer behaviours are quietly eroding margins is key
For airlines and online travel agents, this represents a much broader shift in how revenue protection is viewed, because the challenge is no longer just stopping fraudulent payments, it is understanding which customer behaviours are quietly eroding margins across the journey and responding early enough to prevent those losses from compounding over time. The businesses that are able to connect signals across accounts, bookings, refunds and customer interactions will be far better positioned to identify abuse patterns earlier, protect profitability more effectively and maintain the flexibility and experience that genuine travellers increasingly expect.
