Flight Centre Treat Staff Poorly and Rip Off Customers

tranter on 22/08/2018 - 07:49
Last edited 22/08/2018 - 09:13 by 1 other user

Interesting article. I was drawn mainly to the part on price beats which will make me think twice about asking for one in the future. It appears the cost to the company may actually be worn by staff.

…
Flight Centre staff said they have at times been forced to bear the cost of the company's widely-advertised "Lowest Airfares Guarantee" offer.

"If someone comes into our store and they've found a cheaper price online or from a different travel agent — we have a guarantee [that] we have to beat it by a dollar. If they want to book with you at that price, you have to say 'yes'," a current staff member told the ABC.

"We have to wear that out of our pay."

Flight Centre denied it docks price beats from staff commissions. It said "to honour a price beat, the company foots that bill — not the consultant".

Rather, it said it provides staff with a $500 allowance, against price beats. If that allowance is exhausted, a consultant "would simply not earn a commission on an additional price beat".

While numerous staff told the ABC they were confused about their pay structure, they believed at least a portion of the price beats is still "worn" by staff.
…

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Comments

  • Zedsdeadbabyzedsdead on 22/08/2018 - 08:06
    -5

    It's plane to see these are turbulent times.

  • JimmyF on 22/08/2018 - 08:52
    +10

    I was drawn mainly to the part on price beats which will make me think twice about asking for one in the future

    They're beating it by a $1, why bother rewarding them with a sale in the first place? Woohoo $1 saving on a $3000 holiday?

    Its like all these price beat places for anything, you're rewarding them with business when they are too lazy to offer the BEST price up front, all while the place offering the cheapest price gets no business and goes out of business.

    So you're left with all the price beat places with 'high' prices.

    • tranter on 22/08/2018 - 09:06
      +2

      Of course it's never been about the $1 saving for me.

      Generally, I feel more comfortable booking flights for my family with somebody local who has a name and face. There's always somebody to help out with any questions or issues that arise, and there's the 24/7 support hotline which provides greater peace of mind while travelling.

      I can also buy FC gift cards at 15% off via Youi rewards.

      • GordonR on 22/08/2018 - 09:16
        +4

        Trouble is that we want the benefits of F2F transactions at the price of an online bucket shop.

        (Not just you, I’ve done it too for exactly the same reasons)

      • JimmyF on 22/08/2018 - 09:30

        Of course it's never been about the $1 saving for me.

        Thats good, as once all the cheap places are gone, all you'll have left if your face to face FC people and prices.

        • tranter on 22/08/2018 - 09:54

          Hopefully with the increased scrutiny they are forced to clean up their act, otherwise I certainly will book elsewhere.

          But in saying that I still don't mind paying a bit more for better support and peace of mind.

      • [Deactivated] on 22/08/2018 - 11:07
        +1

        yeah the 24/7 support line is useless.

      • SnoozeAndLose on 22/08/2018 - 22:52

        I can also buy FC gift cards at 15% off via Youi rewards.

        Can you help me to buy FC gift card for 12% off?

  • Wampus on 22/08/2018 - 08:55
    +2

    This would explain why so many people complain that FC simply won't price beat despite their guarantee (and the ACCC has time and time again caught them at it) - it's just not worth it for the poor consultant

  • HighAndDry on 22/08/2018 - 09:42
    -1

    If the consultants are paid on commission - and obviously they go into the job knowing about the pay structure and FC's price-beat guarantee - then that makes sense.

    • tranter on 22/08/2018 - 09:47
      +2

      The article says most employees are confused by the pay structure. It seems it's designed that way on purpose.

      • HighAndDry on 22/08/2018 - 09:57
        +5

        That honestly worries me more. I've planned holidays - if they don't even understand their own pay structure, I'm having very little confidence they could help me book an entire holiday.

        More seriously though, the article seems like the usual: Blow up something which is commonplace and make it out to be a huge deal.

        1. Sales staff mark up products - yes, this happens. It's called a profit margin. All sales do this if they can. It's not as if they're telling customers one price and then charging a higher one.

        "The thing that sat, I guess, uneasy with me was that you weren't transparent with that actual cost," Ms Olofsson said.

        How many shops tell you the cost price of the goods they sell you? This is a downright stupid complaint.

        1. Staff are paid base + commission. That's standard. If they're confused by this, they don't deserve their pay. And they always make no less than minimum wage.

        If staff fail to make enough on commission over a month, Flight Centre tops up their pay to bring them in line with the minimum industry award wage.

        The other complaint?

        While numerous staff told the ABC they were confused about their pay structure, they believed at least a portion of the price beats is still "worn" by staff.

        Again - yes, if you work on commission but don't make a profit, you don't get any commission. That shouldn't need explaining.

        The only real issues - which are much more boring, as I see it are:

        1. Excessive unpaid overtime - especially if they're only paid the minimum wage, there's very little leeway for unpaid overtime.

        2. Lack of legally mandated breaks - again, especially on minimum wage, this becomes more egregious.

        That's it. Otherwise it's just same old complaints about having to work too hard and not being paid enough, and shops charging people too much. Who doesn't have those complaints on a daily basis?

        • tranter on 22/08/2018 - 10:06

          I must say you take a very different angle on the issues raised in the article to what I do.

        • HighAndDry on 22/08/2018 - 10:14
          +1

          @tranter: Hahaha, probably? Judging from a lot of replies that I get, you're in good company. Or at least a lot of company. I guess my view comes down to: The staff know or should know their pay structure, and customers are told what they're paying and what they're getting.

          After that, they're adults and make - and are responsible for the results of - their own decisions. Australia already has generous consumer protection and employment laws, so as long as FC isn't breaking those (which again, a few of the points they might be) - I don't see anything wrong happening.

          Edit: Oh and also, I'm not on the "Fake news" bandwagon, but I tend to view all news articles through a lens of "why is it portrayed how it is portrayed" and (as part of my job) I tend look at things a bit more critically than usual I guess. So reading this article - at first I thought FC was doing something hugely illegal in their mark ups (I thought they may have been quoting one price, and then surreptitiously adding 'fees' on top of that), but it turns out they're just marking up the cost price of flights before selling them to customers (which is again just… retailing).

          Likewise with the pay issues - companies aren't allowed to deduct from set pay, and they can't pay below the minimum wage. They can absolutely have a commission structure that reduces commissions for sales which don't make profit (or make too little, etc), so long as staff are still paid minimum wage. I mean - paying minimum wage is obviously not great but it's perfectly legal.

          Which leaves.. well the two issues I listed above as being the only two which might actually be real issues. The rest is basically a "human interest story" (something you'd see on Today Tonight or ACA) and a PR issue for FC.

    • try2bhelpful on 22/08/2018 - 10:43
      +1

      They have no control over a policy set by their management. The consultant has no control over someone coming in with a price beat.

      • HighAndDry on 22/08/2018 - 10:54

        Normal sales people are generally selling things at prices set by management too, but they'd just have as much right to complain if those prices mean less sales. I get that it seems unfair they're seemingly being penalized by something out of their control, but 1. commission is in addition to base pay for a reason, and 2. I've worked sales (for a short period, thankfully), this is the nature of the job.

        And baseline is still - if they went in knowing their pay structure and knowing that FC has a price-beat guarantee (and you'd hope they'd know at least that), they're adults able to make their own decisions.

        • try2bhelpful on 22/08/2018 - 11:12

          The Flight Centre people are still doing all the work to make the sale; the price is out of their control. Head Office sets the policy then expects the person on the floor to take the flack for this policy; not just the "price beat" but the pressure to upsell extras. Then when the people are doing what they are told the company "dumps" on them because this isn't company "ethos" when the general public gets upset.

          I doubt the people highlighting this issue actually expect anything to come of it; they are just making the people who walk in the door with their "price beat" aware of this. The smart thing, for the Flight Centre people, would be to ensure that the Price Beats are shared amongst the entire office so no one gets above the $500 mark.

          I think Flight Centre are crazy if they are trying to "price beat" some of the "dodgier" online sites. I would be setting what sites I will price match and leave it at that; then provide better service than most online places. I know I need to hand in my OzBargain badge but I'm willing to pay a bit extra for the piece of mind of dealing with a reputable brand (despite the issues people have the flight is usually actually booked). Healthy competition is good; competition that drives you broke isn't.

        • [Deactivated] on 22/08/2018 - 12:46

          @try2bhelpful:

          The Flight Centre people are still doing all the work to make the sale; the price is out of their control. Head Office sets the policy then expects the person on the floor to take the flack for this policy; not just the "price beat" but the pressure to upsell extras.

          You mean like literally every other business?
          JB HiFi, Harvey Norman, blah blah blah.

          Commission is earned on the difference between the cost price before any vendor rebates, and the sale price.
          If someone at JB HiFi gives you a discount, or it is in the catalog (and often the cost price doesn't go down), the sales person makes less money.

          The problem I have with this is that FC does not give Base + Commission but rather Commission + Top Up to minimum wage.

        • try2bhelpful on 22/08/2018 - 17:13

          @Drew22:
          Personally I'm not happy with it anywhere else as well. You only have to look at how much whining people do here when salespeople try to upsell stuff to them to imagine how much daily flack the salespeople get and, I assume, some people won't be very polite about it. If they try to upsell people yell, if they don't management yells.

          I think the issue with FC was not so much around Commission but that they limit it based on how many "price beats" they encounter; it must be very tempting to find a way to palm someone off it you have reached your total.

          If FC is Commission + Top up that is not great.

        • [Deactivated] on 22/08/2018 - 20:30

          @try2bhelpful:

          There is no problem with Base + Commission, it is a simple and easy way to motivate, and reward sales people.

        • spackbace on 22/08/2018 - 21:32

          @Drew22:

          As long as there's a base. If it's commission only then that just sucks

        • [Deactivated] on 22/08/2018 - 22:37

          @Spackbace:

          Well, their commission makes up the base + top up if they don't meet their base targets.

          I'm not a fan of that model and honestly don't think it should be legal. But, it is what it is and if they agreed to it… Well… No one is forcing them to work there.

  • SirFlibbled on 22/08/2018 - 10:43
    +2

    If you receive a commission and sell a product cheaper (because of a price match) then of course your commission is going to be less as it's based on the profit margin. However, if the price beat guarantee didn't exist the customer likely would have gone elsewhere resulting in no sale and no commission.

    As long as FC aren't deducting the price difference out of their commission (and my reading is this isn't happening)then I don't see what the issue is.

    They're adults who have taken a job and should understand the type of pay structure they're on.

  • try2bhelpful on 22/08/2018 - 10:56

    I went with Flight Centre for my round the world flight last year ($3400 business class each) and the guy spent ages with us working on the dates to make sure we travelled on days that worked for us and gave us the best deal. He didn't try to upsell us on the Captain's package or pressure us to book hotels with him. We finally did book some hotels through him; but that was after I determined I couldn't get a better deal on them, not even through the hotel's site itself. It probably depends on what consultant you get.

    • tranter on 22/08/2018 - 11:38

      Yeah it really depends on the consultant you happen to get.

      Was it a price match? I just booked last week and they automatically added travel insurance to the invoice. I wasn't too worried about it though, I just asked them to take it off.

      I now have 2 or 3 contact emails of consultants that I trust to a degree, so doing price beats is usually not an issue.

      • try2bhelpful on 22/08/2018 - 17:02

        It was actually a FC advertisement. Nothing was added we didn't request. They might be getting more desperate now though.

  • Diji1 on 22/08/2018 - 11:26
    +3

    You might want to watch a few docos about Flight Centre, they're a terrible company and you are not getting cheapest fares.

    • tranter on 22/08/2018 - 11:29

      I would have to agree. This is not fake news, they have form.

    • [Deactivated] on 22/08/2018 - 12:50

      Seconded.

      They (and their subsidiaries) actually take pay out of employees (in Asia) salaries if the employee makes a mistake.

      • djkelly69 on 22/08/2018 - 16:17

        It says in the linked article that they do that here as well.

        • [Deactivated] on 22/08/2018 - 20:34

          In Australia it is taken out of their commission, in Asia it is out of their base salary.
          A mistake of a few hundred dollars might see you take home almost nothing that month.

    • purplelady on 22/08/2018 - 13:56

      They are never ever cheapest.

  • [Deactivated] on 22/08/2018 - 11:55
    +15

    I don't even believe the ad guy is a real pilot.

  • chumlee on 22/08/2018 - 13:55

    Nothing suprising here. Happens in a lot of corporate stores.

    Take JB for example. A price match or even a sale item may mean no commission for the sales person but they take the deal as they have a $ target to hit for the week

  • spackbace on 22/08/2018 - 14:07
    +3

    Happens in any job with commission, you take the good with the bad.

    By rights, a price beat shouldn't affect them negatively and should really pay them $50 or something for their time. Like car sales, there's no such thing as a $0 deal, but there are minimum deals.

    You want your staff to be giving the best service, regardless of the commission amount, but if a customer buying from you isn't going to put any money in your wallet, you're not likely to give them the best service.

    • tanksinatra on 22/08/2018 - 14:35
      +1

      By rights, a price beat shouldn't affect them negatively and should really pay them $50 or something for their time. Like car sales, there's no such thing as a $0 deal, but there are minimum deals.

      I was thinking the same thing. Regardless of whether or not there is profit on the deal, there's still sales volume & potential kick backs, not to mention foot traffic & brand relationship. Despite these corporate benefits it is interesting that the consultant is getting their commission penalised. Seems like a bit of a raw deal.

      You want your staff to be giving the best service, regardless of the commission amount, but if a customer buying from you isn't going to put any money in your wallet, you're not likely to give them the best service.

      If the service/product is going to vary due to factors within the company's control then perhaps this should be specified in the T&C.

    • tranter on 22/08/2018 - 14:47

      Probably why so many FC staff seem reluctant to do a price beat and find an excuse as to why they can't do it. Either there's nothing in it for them or it's actually costing them money by taking away opportunities for a 'real' sale.

      Fair enough if you're working in a commission based environment and you have a mortgage to pay.

  • djkelly69 on 22/08/2018 - 16:19
    +2

    The other FC threads where people have mentioned mysterious 'compulsory' fees being added on after price-matching are suddenly making a lot more sense..

    • tranter on 23/08/2018 - 09:15
      +1

      You have a pattern of giving bad advice. At least be original will you.

      Meanwhile I suggest you stay out of other people's business.
      Its not for you to get involved at all.

  • Chubbsmcfatflabs on 24/08/2018 - 14:51

    The reportage on the ABC the other evening did not paint a pleasant picture of Flight Centre. I know of a couple of people that have worked there and it is a heavily commission based business, and like a lot of sales based organisations border on cult like activities to ensure compliance.

  • Yorkshire-Man on 28/08/2018 - 13:13

    No idea why this is news, FC has always been expensive… this is why they dont do 'online'

  • phluffed on 07/09/2018 - 19:42
    +1

    It used to be that a "price beat" was sent in house to see if there was an option to use an alternate rate (ie: student flight offer or wholesale offer) from one of the other divisions of the company. If there was, you retained any "overs" as commission. If no alternate could be found, head office would wear the loss and you would get up to $100 credited as commission depending on the flight cost.
    From what I understand, that has changed and you have a "bank" that you can draw from to negate any price beat losses (but only up to the matched price, so no commission). Once that fund is gone however, the loss on the file remains and must be made up elsewhere.

    But this is all on flight only, and a beat can only be offered id the exact seat class and flights can still be matched. Where it became a problem was that some other agencies would mock up a booking for the client when quoting and that locks out the seats (length of time depends on how advance the booking is and airline "hold" times.) In those cases, it was just impossible to match the offer and customers would be sent (unhappily) away. An alternative was to agree to the price beat on the flight, then add-on passes / travel insurance / hotels etc at full rate to cover the loss on the flight.

    For the rest of the stuff, yes a cult is a good way of explaining it. While not officially required to take part in every little thing, it is frowned upon to miss something and it's noted as a black mark.

    Standard markup rates were up to $150 on an international economy flight (depending on region) and whatever you could get away with on a Business or First Class ticket ($1000+). Domestic flights were only about $10 commission. The real income came from hotels, trips, car rentals, and travel insurance.

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