What is the purpose of a travel agency's cancellation policy?

The purpose of a travel agency's cancellation policy is to outline the terms for canceling travel arrangements. This policy provides essential information regarding the steps a customer must take if they decide to cancel a trip, including any potential penalties, deadlines for cancellations, and whether a refund or credit will be issued. By having a clear cancellation policy, travel agencies protect their business while also keeping customers informed about their options and responsibilities if plans change. This clarity helps avoid misunderstandings and sets clear expectations for both the agency and the traveler regarding cancellations.

The other options provided do not relate directly to the main purpose of a cancellation policy. Offering discounts for early bookings, providing customer feedback options, and comparing prices of different airlines serve different functions that do not pertain to the process or implications of canceling a trip.