Case Study #2
The "Refund‑for‑Membership" Tactic
Published 9 Jul 2025 • Moon Palace, Cancún
In June 2025, U.S. guest J. landed in Cancún believing his Palace Elite referral stay was fully paid. Minutes later, he learned the reservation had been wiped from the system because the referring member was in arrears on dues. Staff later said a refund was "approved by corporate"—but only if J purchased a new membership. The evidence below shows how an owed refund became leverage in a high‑pressure sales pitch.
The Initial Incident: A Familiar Pattern
In late June 2025, J and his family of six arrived at Moon Palace Sunrise for a planned 5-night stay. Their two rooms had been booked via the Palace Elite Referral Program and paid in full directly to Palace Resorts for a total of $4,758.30 USD.
Like our own case, they were informed upon arrival that both reservations had been cancelled without any prior notice. The reason given by staff was identical: the referring Palace Elite member had failed to pay their dues.
Stranded in the lobby, J's party was forced to re-book their stay at Moon Palace Nizuc at a cost of $4,528.74 USD, resulting in a diminished experience with significantly fewer perks than the Diamond-level benefits they had originally paid for.
The "Smoking Gun": A Coercive Offer
After hours spent seeking a resolution, J was contacted by a Palace Resorts saleman named Ismael. In a text message, Ismael made a clear and unambiguous statement:
“I already have the OK from corporate for the refund of your vacation.”
This message serves as a direct admission by the salesperson that Palace Resorts' corporate office approved a full refund.
However, the story takes a disturbing turn. As J stated:
When J met the rep the next morning, J was told the refund would be processed, but only if he purchased a Palace Elite membership. In effect, his own money became a bargaining chip.
This testimony reveals a predatory business practice. The "corporate-approved" refund was not a good-faith effort to correct a mistake. It was the bait for a high-pressure sales pitch, holding the guest's own money hostage to compel the purchase of a costly membership.
The Evidence File for Case Study #2
J’s demand letter cites Mexican LFPC Art 92 TER and Florida deceptive‑trade statutes. The exhibits below independently corroborate a repeatable playbook.
Exhibit A
2 pages
Original Booking Confirmation - Florida Guest
Initial booking confirmation for the Florida guest showing the original reservation details and payment confirmation for Moon Palace resort.
Exhibit B
7 pages
Moon Palace Letter - Official Communication
Official letter from Moon Palace resort regarding the guest's reservation status and the conditions surrounding the refund offer.
Exhibit C
1 page
The Coercive Refund-for-Membership Demand
Documentation showing the coercive refund offer where Palace Elite staff admitted a refund was authorized but required the guest to purchase a membership first.
Exhibit D
1 page
Final Communication & Refusal to Refund
Final documentation confirming Palace Elite's refusal to provide the refund without membership purchase, demonstrating the conditional nature of their "authorized" refund.
Conclusion: What This Shows
- Reservation cancelled due to an internal membership issue.
- Admit fault and promise a refund to placate the wronged guest.
- Refund was conditioned on the guest purchasing a new membership.
Multiple documented cases now indicate a systemic practice. Files have been forwarded to Visa, PROFECO, and state regulators.
Guest initials redacted; full documentation held on file.