As a travel agent you never want to hear that a company you have worked with has gone out of business. It’s a bad situation for everyone: the employees of the company, the agents who booked with them, and the clients who had vacation plans with them.

While there is no way to ensure that you are never in this situation, there are lots of things you can do to help avoid it. The majority of these tips revolve around knowing who you are working with, so let’s tackle those first.

Rely on your host agency’s and/or consortium’s preferred list. While no vendor on any preferred list is perfect, they have had to go through some sort of vetting to end up on a preferred provider list. Most consortia keep a tight rein on their preferred providers and ask for the members to notify them of any issues. If you have thousands of agents working with a company and they notify their consortium if commission payments start getting slow, that consortium will usually step in and ask for financial documents to provide the company has sufficient financial health to continue to work with its members. If they don’t, the membership is notified and the company is removed or placed on suspension. That’s why you rely on those vendors first and foremost.

Vet the companies you work with. Most travel agents don’t have the time or interest to go around vetting suppliers. That’s why you rely on the preferred partners of your host agency or consortium. If you need to go outside those preferred partners, do so with caution. Find out as much as you can about the financial health of the company (that’s harder than it sounds). Are they USTOA members? That’s a good start because if they are USTOA members there is a bond that kicks in if they default.

Don’t choose companies based on personalities. I know that sounds like pretty simplistic advice, but I cannot tell you how many times I have asked an agent why those chose a particular supplier and heard, “I met their rep at an event and he/she was very nice.” We all know that people do business with people they like, but there is too much at stake here to trust a client’s vacation to a company just because they have a nice rep. Does your host agency or consortia have a relationship with them? What happens if something goes wrong? The rep isn’t going to be able to help you, so who will? Bottom line, having a nice rep is, well, nice. But there is much more to consider when choosing a supplier. The same is true for vendors with beautiful websites or nice brochures.

Your client can also play a role in this process. Here are two tips related to the client’s role.

Strongly encourage your clients to pay with a credit card. Paying with a credit card offers substantial protections that a client just doesn’t get any other way. If a vendor defaults and the client paid with a credit card, they can go back to the credit card company and dispute the charge so they hopefully get their money back. That is not the case with a debit card, and certainly not if they paid by cash or check. Of course, some clients don’t have a credit card that they can use for the purchase, but always make sure you educate them of the benefits of paying by credit card.

If a client asks for a non-preferred vendor you don’t have to book with them. Remember, you are the travel expert in this relationship. If a client comes to you with a brochure they got in the mail or references a commercial they saw on TV, you don’t have to automatically book with that vendor. Have a conversation with them about what it is they want. If the vendor isn’t preferred and you have a better option, explain why you think another vendor is a better choice. Of course, this isn’t always just to avoid default issues, but is true in all booking situations.

The bottom line is that choosing a vendor to handle your client’s travel plans is a serious issue. You have options, so make sure you are making smart decisions about who you choose to work with.