I’d caution against having too much confidence on a successful chargeback by the renter. The contract said it was non refundable and the renter was advised to purchase
travel insurance. Granted nobody expected a pandemic, but cancel for any reason travel insurance does exist. David’s response to the chargeback will be that the renter should have purchased this type of insurance. Now he would certainly want to avoid the chargeback because it’s determined on a case by case basis, and he might lose. So he is offering the travel credit to avoid as many of those as possible.
Disney is refunding points for resorts that are closed, basically restoring them to whatever status they were before. There are really three categories of points status on the date of cancellation: 1). those that are in current UY that are still bankable, 2). those are are in current UY that are not bankable, and 3). those that were banked from previous UY. Not counting borrowed points because they will be restored to the future UY. Doubt there is a lot of those being rented anyways since rental prices had been going up.
If my points are in category 1 - points that are still bankable say by end of April (which seems to be when the feds are aiming to lift social distancing), I will provide a refund of the 70% paid to David’s and offer to re-rent my points, with the hope that the cash will allow David’s to survive this. Because If they don’t, I won’t get my remaining 30%. He is unlikely to get new reservations (and new cash) for the foreseeable future, so these points will likely be re-rented to someone with a travel credit. If the points are still bankable when I get them back due to a cancellation, then no harm no foul really, I don’t mind refunding the cash to give David’s a lifeline.
If my points are in category 2 and 3, the points are worth significantly less value to me, but I do already have the 70% which limits my maximum loss to 30% - the same amount I would have lost if David’s cease to exist. I am not providing a refund of any cash since that might be throwing good money after bad. However I will certainly offer to re-rent and it’s up to David’s to pull off the logistics of using those points given the more limited usage window.
David’s lose if the owner keeps the 70% payment AND the cancelled points. They will obviously never work with you again, but they may no longer exist in a couple months. They can probably come after you, although I don’t think they have the resource to do so. I’d hope owners won’t do this since we all benefit from a vibrant rental market. David’s also lose if the renter successfully pull off a chargeback. I think they are doing the right thing to try to minimize potential damage. If they do lose a chargeback, they don’t have to pay new cash to the credit card company, as the chargeback will be against future new credit card charges. If they got the points back from the owner to re-rent, then they are not spending new cash to fulfill reservations either. In theory they can survive the chargebacks.
This is a cash flow / liquidity issue. They can survive this if they can successfully utilize points in categories 2 and 3 to fulfill travel credit demands, while having the cash flow to weather through the storm before going under (they will get no new cash in for the foreseeable future due to significant drop off in travel demand - see the troubles with airlines / cruises / hotels right now). Large companies have credit lines for this reason. I hope he has access to liquidity to weather through this as he does have a good business model. I think this is why he is basically begging for the 70% back to get cash now.
Given current technology, it’s only a matter of time before a vaccine is developed, and people have short memories. The market will be depressed this year and possibly next, but Disney and DVC will be fine. David’s may not exist, but a new company will fill the void, with new contract terms that spell out force majeure.
