Season ticket refunds / changeovers confusion

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All Line Rover

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Could someone please explain to me the difference between season ticket refunds and changeovers, because after having read some other threads about the matter I am now rather confused. :|

Say I have a monthly First Class season ticket from London to Manchester, costing £2005.70. After two weeks I hand it in for a refund. The FOR is £423, so if I remember correctly, seeing as I have already "saved" £4230, I won't be entitled to a refund, as this plus the £10 administration fee exceeds the value of the season ticket?

Now say I want to change this to a Standard Class season ticket from London to Milton Keynes, costing £423.30. Will I only be able to do this in certain circumstances (such as moving house)? Whether or not the answer to that question is yes or no, if I am entitled to change the season ticket, how will the refund be calculated?

Thanks in advance for your help. :)
 
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hairyhandedfool

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....Say I have a monthly First Class season ticket from London to Manchester, costing £2005.70. After two weeks I hand it in for a refund. The FOR is £423, so if I remember correctly, seeing as I have already "saved" £4230, I won't be entitled to a refund, as this plus the £10 administration fee exceeds the value of the season ticket?....

If you used the ticket for two weeks you would be charged for two weekly tickets (plus an admin fee), not ten day tickets, unless a weekly ticket does not exist for your journey.

....Now say I want to change this to a Standard Class season ticket from London to Milton Keynes, costing £423.30. Will I only be able to do this in certain circumstances (such as moving house)? Whether or not the answer to that question is yes or no, if I am entitled to change the season ticket, how will the refund be calculated?....

You can do a changeover in any circumstance, provided the season has a month or more remaining. A season changeover refund is worked out with a daily rate for each ticket. The price of the current and new season (from the original start date to the expiry date) will be divided by the total number of days the current ticket is valid for. Those figures are then multiplied by the number of days remaining on the ticket. The difference between those figures is refunded (or charged as applicable).

It has been noted on this forum recently that some companies are not following this proceed though.
 

barrykas

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If you used the ticket for two weeks you would be charged for two weekly tickets (plus an admin fee), not ten day tickets, unless a weekly ticket does not exist for your journey.

There's no weekly for London to Manchester. Prior to the introduction of time restrictions, I would've suggested the "relevant fare" would be an All Line Rover. If such a situation arose now, I'd probably contact Virgin's Pricing Manager and ask for their advice.

Cheers,

Barry
 

hairyhandedfool

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Ah yes it's market based isn't it, I'd forgotten that, the problem with an ALR is the boarding/alighting time at Euston/Watford/Milton Keynes.
 

Paul Kelly

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Could someone please explain to me the difference between season ticket refunds and changeovers

It's an interesting subject and I'm far from an expert on it, but the discrepancy seems to arise because when doing a changeover, the residual value of the existing season is calculated at a more favourable rate to the holder.

When refunding an annual season ticket, the extra value that comes from purchasing a whole year's travel in advance isn't considered. The refund is calculated as if the holder had only purchased a season for the period they actually used in the first place, at the prevailing rate. This is calculated by multiplying the base rate (normally the weekly season fare, unless we're dealing with a market-priced season) by a multiplication factor, which is calculated as follows:
3.84 x (no. of whole months) + 0.64 x (no. of 5-day periods) + 0.13 x (no. of remaining days)
With everywhere between 10 months 13 days and 1 year being charged at a flate of 40 times the weekly base rate.

So there is no point in trying to refund an annual season that has been used for 10 months 13 days or longer, as the residual value is zero and you get nothing back.

On the other hand when doing a changeover, the residual value of an annual season is calculated more simply (some might say more fairly), in exact proportion to the number of days' validity remaining. This calculation involves taking into account the exact number of days that have been used and that the season is valid for, so it depends on the time of year and whether a leap year is included etc. Maybe that's why booking clerks find it so tedious, although technically it is simpler than the formula used to calculate a refund.

The difference between the residual value of the season ticket held, and that of the ticket being changed to, had it been bought on the same day with the same validity period, is what is then refunded.

I drew a couple of little graphs in Excel to illustrate this. The first one shows the residual value of a season calculated in terms of the base rate multiplier, when (a) a refund is being done (blue line), and (b) a changeover is being done (red line). Note that for a refund, the amount you get back is simply the residual multiplier times the original weekly base rate, whereas for a changover, the amount you get back is the residual multiplier times the difference between the weekly base rates of the old and new season tickets. Obviously the cheaper the season you change over to, the more you get back as a refund.



The second graph shows the residual value when doing a refund as a percentage of the residual value when doing a changeover. Basically the shorter the amount of time left on the original season, the better value it becomes to do a changeover. In the extreme case in the second half of the tenth and in the eleventh months of validity, you would get nothing back at all from doing a straight refund, but you can still get a bit back from doing a changeover - although as HHF says, in the final month changeovers aren't allowed either.



The exact figures will also vary a bit depending on the time of year and the lengths of the months involved etc., as I said. To keep my graphs simple I just assumed an average year length of 365.25 days with 12 months of an equal 30.4375 days each!
 
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