A Damage Waiver is a non-refundable fee that guests can pay in exchange for protection against eligible accidental damage during their stay.
Unlike a traditional Security Deposit, the guest does not have a large amount of money temporarily held on their card. Instead, the guest pays a smaller, non-refundable fee upfront.
With ChargeAutomation, you can offer guests a choice between a Refundable Security Deposit and a Non-Refundable Damage Waiver during the online check-in process.
💡 Damage Waiver vs. Security Deposit
🛡️ Damage Waiver | 💳 Security Deposit |
Non-refundable fee | Refundable authorization |
Guest pays a set fee | Funds are temporarily held |
No large authorization hold | Amount is held on the guest's card |
Covers eligible accidental damage according to your configured coverage | Can be captured in full or partially when a valid claim is made |
Often provides a simpler guest experience | Gives the property greater control over the deposit amount |
A Damage Waiver is not the same as a refundable Security Deposit. The Damage Waiver fee is collected as a payment and is not automatically refunded at checkout.
🏠 What Does a Damage Waiver Cover?
The Damage Waiver is intended to provide protection for eligible accidental damage, subject to the coverage and terms configured by the property.
Examples may include accidental:
🍽️ Broken tableware
🪑 Damage to furniture
🥤 Spills or stains
🏠 Other eligible accidental property damage
The property should clearly communicate what is and is not covered in its rental agreement and Damage Waiver terms.
⚠️ Important: A Damage Waiver does not automatically mean that every type of damage is covered. Coverage is subject to your property's configured coverage limit and applicable terms.
❌ What Is Typically Not Covered?
A Damage Waiver should not be treated as unlimited protection.
Depending on your property's terms, exclusions may include:
🚫 Intentional damage
🎉 Damage caused by parties or prohibited activities
🚭 Damage caused by violating property rules
🧳 Theft or lost items
👤 Damage to a guest's personal belongings
📢 Damage that is not reported or documented according to the property's requirements
Always make sure your rental agreement and Damage Waiver terms clearly explain the applicable coverage and exclusions.
💰 How Much Should I Charge?
ChargeAutomation allows you to configure the Damage Waiver amount according to your property's requirements.
You can configure:
💵 Damage Waiver amount
🌙 Per-stay or per-night pricing
🛡️ Coverage limit
For example, you could charge a fixed Damage Waiver fee for the entire reservation or calculate the fee based on the number of nights.
💡 Tip: Choose a fee and coverage limit that make sense for the type of property, average booking value, and level of risk.
🔄 Can Guests Choose Between a Security Deposit and Damage Waiver?
Yes!
With Flexible Guest Protection, you can allow eligible guests to choose between:
💳 Refundable Security Deposit
A temporary authorization is placed on the guest's payment method. If there is no valid claim, the authorization is released according to your configured settings and the payment provider's authorization rules.
🛡️ Non-Refundable Damage Waiver
The guest pays a non-refundable fee for the applicable damage protection.
The choice can be presented as part of the Protection step in the online check-in journey.
🔀 Can a Guest Switch to a Damage Waiver After the Security Deposit Is Authorized?
Yes, when the applicable settings allow it.
ChargeAutomation now supports a flexible switch that can allow a guest to choose the Damage Waiver even after a Security Deposit has already been authorized.
This can be useful when a guest initially selects the Security Deposit but later prefers the Damage Waiver option.
💳 Does a Damage Waiver Place a Hold on the Guest's Card?
No.
A Damage Waiver is a payment, not an authorization hold.
Security Deposit:
💳 Funds are temporarily held on the guest's payment method.
Damage Waiver:
💰 The guest pays a non-refundable fee.
ChargeAutomation does not hold the funds itself. Payments are processed through the property's connected payment gateway.
🧾 Is the Damage Waiver Refundable?
No.
The Damage Waiver is a non-refundable fee.
It should therefore be clearly presented to the guest as a non-refundable charge before they complete payment.
🏨 When Should I Use a Damage Waiver Instead of a Security Deposit?
A Damage Waiver may be a good option if you want to:
😊 Reduce guest friction
💳 Avoid placing a large authorization hold
⚡ Simplify the payment process
🛡️ Provide protection against eligible accidental damage
🏠 Give guests an alternative to a traditional Security Deposit
A Security Deposit may be preferable when you want to retain a larger refundable amount that can be captured when a valid claim is made.
The best option depends on your property's risk, policies, and guest experience strategy.