Turkish Airlines launched a new digital wallet, providing an integrated way for travelers to manage payments and refunds. The offering is available in multiple currencies (₺, $, €, £) and links to users’ accounts in the company’s Miles & Smiles loyalty program.
The company promises speed and convenience with the new platform, making it easier for passengers to manage funds. But it is not a perfect solution, and consumers should be wary of the offering, or at least aware of the shortcomings.
We have added TK Wallet to our digital payment methods by incorporating it into our digital services used through the Turkish Airlines mobile application and website.
– Ahmet Olmuştur, Turkish Airlines Chief Commercial Officer
In short, the company promises refunds that are paid to the TK Wallet rather than the original form of payment will be processed faster. The catch, of course, is that funds in the TK Wallet are not actually refunded. They remain locked in the Turkish Airlines ecosystem, only spendable on new purchases with the airline. Customers can also preload funds into the TK Wallet from a credit card, though it is not clear why that would be beneficial to a traveler.
Turkish says the refunded funds can be transferred from TK Wallet to the original form of payment in a second step. Adding that bit of friction, however, means more passengers are more likely to spend again with Turkish, rather than take their money elsewhere. Moreover, the company has two types of funds that can exist in a TK Wallet, and only one of them is actually refundable.
Turkish teases an option whereby it might offer passengers a bonus for refunding to the TK Wallet rather than the original form of payment. Choosing that option, however, converts the funds to “TK Money” stored in the wallet. That locks the money in to the TK Wallet, as shared in the fine print, “This amount cannot then be returned to the original payment method and can only be used via the Turkish Airlines website or mobile application for Turkish Airlines and AJet flights.”
This is, of course, great news for the airline. It captures consumers spend and keeps hold of the money, even if the original booking is cancelled. It also reduces payment processing costs via credit card processors.
Funds in the TK Wallet expire after two years. This may not be an issue for frequent travelers with the airline, but it further limits the value of the wallet for less frequent travelers, especially those who are keen to shop around on future bookings.
Finally, there are a number of purchase types where the TK Wallet funds cannot be used. These include any itinerary with a partner airline in the booking. They also include any Miles & Smiles award bookings, though the Wallet is tied to a Miles & Smiles account. Other transactions where TK Wallet funds cannot be used include change fees and gift card purchases.
Getting to spend refunded monies immediately is worth celebrating. But consumers are all too likely to overlook the limitations the TK Wallet creates, especially around locking money up that otherwise could have been refunded to the original form of payment. That’s less good. Especially when programs like this are used by airlines as excuses to speed pseudo-refunds, rather than improving their actual refund handling.
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