Through ChargeAutomation’s automated Security & Damage Deposit feature, property hosts are able to collect a security deposit from guests in a way that’s easy and hassle-free. You can enable/disable this feature and determine the amount you wish to charge for each property.
Guests are sent automatic email alerts and reminders to update their credit card details for security deposit collection. If a guest does not provide a security deposit (either a payment method is not provided, or the payment method doesn't have sufficient funds), you are alerted via email and can handle the booking as you see fit.
See our article on Setting up Security/Damage Deposit Collection for instructions on how to set up this feature.
Why collect Security Deposits?
The collection of a Security/Damage Deposit is an essential component in the short-term rental space. Hotels understand this and charge damage deposits with each booking.
As property hosts, we learn very quickly that not everyone will treat our properties with the same care and respect that we would, but also, accidents happen! For these reasons, it is crucial for property hosts to protect themselves in this area.
How does the Security/Damage Deposit feature work?
Security deposit is collected in a form of authorization (hold). The maximum holding period is 30 days for Visa/Mastercard if you're using Stripe. Otherwise its 7 days.
Once a booking ended, the Security deposit is automatically released 3 days after check out.
In ChargeAutomation, there are 3 ways of collecting security deposit
By manually sending authorization request link to your customer, learn how
By creating a re-usable authorization link and sharing it to anyone, see example
By creating auto payment rule for automatic collection. Read here
Do I need to have a Stripe account to use the Security/Damage Deposit feature in ChargeAutomation?
ChargeAutomation connects to many Payment Gateways and we have completed rigorous testing to ensure our features are accessible for all Stripe customers. We will continue to test other Payment Gateways to ensure all of our clients have access to these features regardless of the Payment Gateway that is being used. If you are using a different Payment Gateway and are having difficulty utilizing our features, please contact us so that we can make your case a priority.
What happens to bookings that were in my calendar before I began using ChargeAutomation?
ChargeAutomation will create Pre Check-in Wizard links for each booking in your calendar, including those bookings that were in your calendar prior to synching ChargeAutomation.
Automatic Email with Pre Check-in Wizard Link:
An automatic email with the link to the Pre Check-in Wizard will not be sent for bookings that were in your calendar prior to enabling the Security/Damage Deposit feature in ChargeAutomation. You can send this email to your guests manually when you select Bookings > Actions > Resend Pre Check-in Email.
An automatic email with the link to the Pre Check-in Wizard will be sent for all bookings that are received after you have started to sync your bookings with ChargeAutomation.
Where can I find the Security/Damage Deposit link to send to my guest?
When you enter ChargeAutomation, select Bookings and locate the particular booking you are looking for. Take advantage of the filter options which allow you to search by name, reservation number and date! Once you find the reservation, expand the details by selecting the downward arrow and select Actions, then select Resend Pre Check-in Email.
Guests can access the link in this email to update their credit card details for the security deposit under the Payment Card tab.
Once your guest has entered their credit card details, the Security/Damage Deposit Status will change.
See the article on Security/Damage Deposit Statuses to review the possible statuses and their descriptions.
Does ChargeAutomation take full payment or process an authorization on the credit card? What is the difference?
An authorization essentially means that a hold is placed on the guest’s credit card for the amount of the security deposit. Stripe does not charge a fee for this transaction but ChargeAutomation charges a minimal amount.
Authorizations last for 7 days or 3 days after checkout, and can be set up to automatically restart for an additional 7 days if the guest’s stay exceeds the initial 7-day authorization window. Once the 7 days expire, the funds are released back onto the card. In the case where damage to the property is detected, you may choose to capture the full or a partial amount of the security deposit. This amount will not be released back to the guest after the 7 days. Review our article on How to Capture Security/Damage Deposits for more instructions on how to capture the full or a partial amount of the security deposit in Stripe.
We have a special agreement with Stripe and we are giving all Stripe users free access to extended authorization window.
The extended maximum holding period depends on the card type and the country the card is from:
Visa 31 days (Japan 7 days)
Mastercard 30 days
Discover 30 days
A charge is a transaction that collects and deducts funds from the guest’s credit card. Your Payment Gateway will charge a fee for this transaction. In order to return funds that have been charged, it is necessary to perform a refund.
Can I enable the Security/Damage Deposit feature for some but not all Booking Sources?
Yes, you can choose which booking sources will use this feature by going to:
Settings > Account Setup > 2. Payment Rules > select your Booking Source > Security / Damage Deposit.
Learn more about Setting up Security/Damage Deposit Collection.
When will the guest notice the authorization on their account?
You may customize when the authorization process will begin, the options are from 1 hour before check-in to 365 days before check-in. An authorization will be processed successfully as long as the guest has provided a valid credit card with sufficient funds.
How do I capture funds?
If you detect any damage to the property once the guest has left, you may opt to capture funds from the security deposit authorization. This can be initiated directly through Stripe.
Find the payment for the guest under the Payment page, or find the guest on the Customer page.
Select the payment
Select 'Capture' on the upper right-hand side
You can capture the whole amount or a partial amount and leave a brief description for your records.
See our article on How to Capture Security/Damage Deposits for more detailed instructions.
Is the security deposit returned automatically?
Authorizations are automatically returned 7 days after the initial transaction or 3 days after check out. For example, if you choose to begin the authorization 1 day before check-in, you will notice that the authorization window will be calculated from that date. You have the option to restart the authorization if a guest’s stay exceeds the initial 7-day authorization window. If this option is selected, and if a guest’s stay exceeds the initial 7-day authorization, the authorization will automatically restart for an additional 7 days until the guest checks out.
We recommend you select this option to ensure you have access to the security deposit right up until the guest leaves so that you have time to assess if there were any damages and if you would need to capture a portion or all of the security deposit. Once the authorization expires, you no longer have access to these held funds.
If you would like to return the authorized funds prior to the authorization period expiring, you can do so directly through Stripe. See instructions for How to manually cancel a credit card authorization.
We generally discourage releasing funds manually as it adds manual work to a process that is otherwise entirely automated. Usually a guest is ok to wait once they know when they can expect the funds to return to their card.
What if the guest doesn't provide payment details or if ChargeAutomation can't take full payment?
ChargeAutomation will continue to send automatic notifications to the guest, reminding them of the requirement to provide valid credit card details via the Pre Check-in Wizard within 24 hours of making their booking. An automatic email will be sent to you once the 24 hour deadline has passed and payment or payment details have not been provided. At this point you may notify your booking source who will advise you of the time frame required in order to cancel the booking at no charge.
The guest is complaining that I haven't released the hold. But I did!
ChargeAutomation does not actually have the power to release a credit hold. What we do is, we notify your credit card processor that we no longer require the hold.
The processor then notifies their interchange bank, which then notifies the bank that issued the guest's credit card, which releases the hold.
These action are supposed to take place more or less instantly - but that doesn't always happen. In particular, it is common for the guest's bank not to release the hold for several days after they've been notified that they can. It is extremely common, almost the norm, for this to happen if the guest is using a debit card. This is why many hotels and rental car companies recommend that you not use a debit card - they use holds too, and suffer from the same problem.
We have absolutely no control over this, it is entirely a function of the guest's bank who won't even talk to us. Sometimes the guest can call their bank and get their customer service folks to dig into the records, find the message to release the hold, and make it happen more quickly. Other times they just have to wait until it clears itself out, however long that may take.
The guest says I took their money instead of placing a hold. But I didn't!
If they're using a debit card, they're half right. Yes, the money value in the amount of the hold has been removed from their account. You don't have it, though - their bank does, and will keep it until you release the hold, and often for several days or a week later. The bank makes (a little bit of) interest from holding this money in their account, so they're in no particular hurry to put it back. This is why credit cards are preferable to debit cards. Unfortunately, we have absolutely no control whatsoever over this behavior - you don't think the guest's bank listens to us, do you?
The guest says I took two security deposit holds and now their credit card is maxed out. But I didn't!
Actually, yes, you probably did without knowing it.
Security deposit holds do not last forever - the precise length of time they last is controlled by the bank that issued the card, and can differ from bank to bank. Usually it's around a week or 10 days, which is why we recommend that the Held and Released numbers discussed above be as low as practical. We have no way of knowing that length of time upfront, but we do get warned when the bank is about to release the hold without our asking it to. Naturally, the longer the guest's Booking, the more likely this will occur.
When this happens, ChargeAutomation automatically just places another hold. This is not displayed in the Booking record or anywhere else, it happens invisibly in the background.
Depending on the lead time of the bank's warning to us, it is possible for two holds to be active at the same time. Or, as discussed above, the banks often aren't in a big hurry to actually release the hold, even when they told us they were going to. Again, this is something we have no control over.