Refunding deposits + rental agreements when you're at scale?

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22 comments

  • Avatar
    Leandri Klopper

    Hello Sam.

    It's a difficult one. Certainly you can solve the Rental agreement by getting guests to sign it when they arrive at your property? That way you don't have to keep track of emails and scanned documents. 

    In regards to the Damage deposit, it's a wildly popular topic. We prefer working quickly. Once the people check out, we give them their money back. On the spot. That way we don't miss anyone and leave an opening to receive a bad review because we didn't pay them back within 3 days after check out. 

    I'm sure our other Partners will have lots to say about this.

    Keep well!

  • Dear Sam,

    Tough market it seems.

    How I do it is keep their CC info in our PMS database, therefore if anything happens, all damages are charged directly to their cards.

    You can also do a pre-authorization on their CC for the damage deposit amount, therefore when you don't need to collect it, you just cancel the pre-authorization, very easy to keep track of and to implement.

    I personally do not have them sign anything and I don't collect deposits, but rest assured if you break something, I'm going to charge you on the spot. 

    Best regards,

    Zsolt - www.thuild.com

  • Avatar
    Sam

    Thank you for your responses!

    Leandri - I feel that having someone go and deliver + pick up the agreement may be a lot more work than keeping track of emails?

    Do you take cash as your damage deposits?

    Thuild - Our other branch does exactly this, but how have you been handling disputes/chargebacks and dealing with the guests' CC companies? Would having a rental agreement signed helped you in cases of disputes/damages?

    Thanks,

    Sam

  • Dear Sam,

    We handle disputes very easily, we tell them what happened, they acknowledge it because I have a very serious face when I tell them that and then they pay up or in case that something's our fault, we sort it out there and then.

    We never allow something to be escape us before they check out. If it happens, as in some rare cases, I call them and tell them that they've been invoiced for the X amount due to the Y thing that happened. 

    Since now, nobody said they didn't do it. Most people report damage immediately, although I've had cases when they didn't, but charged them later because we keep their CC info for 7 days after departure, to spot anything out of the ordinary.

    When it comes to dealing with a bank or their cc company, simply have your invoices sent out before getting there, so the guest cannot say they haven't received it. E-mail is as strong of an evidence as regular mail these days. I usually take pictures of everything and keep it until the issues has been settled, this allows me to bring an evidence package in case of riposte. 

    Hope that clarifies it,

    Zsolt - www.thuild.com

  • Avatar
    Leandri Klopper

    Hi Sam,

    Big pleasure. You wrote: 

    Leandri - I feel that having someone go and deliver + pick up the agreement may be a lot more work than keeping track of emails?

    Do you take cash as your damage deposits?

    Well no, we have a Reception area where all guests needs to come to to check in. We have Admin people working in Reception who literally just file the paper work (I think some of our resorts actually scans it in and saves it to our universal server). So technically there is no Go and deliver needed. 

    We take cash only yes, because we pay back in cash. Some of our resorts now take card payments and then take banking details for an EFT refund. It's not going that well as sometimes the payments are made late which causes irrates. They're considering going back to the cash only policy.

    My suggestion was to ask for cash only and if someone has a card only, warn them that they might receive their refund late as it's not policy to take card payments. Then the client will be happy that we are assisting them by allowing a card payment. 

    Hope this explains it a bit better :-)

  • Dear Leandri,

    Really? It's so complicated for you to process CC and refunds?
    The system I've implemented works excellent without having such described issues.
    You need some serious overhaul over there.

    Best regards,
    Zsolt - www.thuild.com

  • Avatar
    Leandri Klopper

    Hi Zsolt,

    No overhaul needed our business runs fine as is. Our payments and payment methods are not decided by us, we work for a larger managing agent and they have implemented the protocols etc. For instance, payments are only made on Tuesday and Thursdays. So if I have a client who wants their refund on Monday, I need to explain to them that I can only pay it on Tuesday as I'm bound by a financial department. It's not such a big headache for me at all, as I very rarely work with it being in the reservations side of things. Was just sharing. 

    Keep well

  • I still think it's an unnecessary complication.

    This process can be easily done in 15 seconds with a POS that is linked correctly. Guests would be happy to have everything done in no time.

    I am high on process improvements. That's one of the most important things for me, as it allows guests to enjoy their stay and not spent time or worry about anything.

    Cheers,

    Zsolt

     

  • Avatar
    ELENA FACCINCANI

    Dear All

    I have an apartment in Italy lake of Garda

    I would like your suggestions because I ask a security deposit at the check in to be paid in cash promising the guest that I give it back at the check out when the Guest gives me back the keys.

    The point is that when I go to the flat to do check out usually the guest is ready to go, I go around the flat but fast with the excuse to ask if they do not forget anything.... only a few seconds.. for me it is embarassing to go and check...

    Everything seems to be " normal", the guest who damages seriously something does not say anything...

    Then when my housekeeper goes to clean... she realizes the damages done but the guest has gone with the deposit back to his pocket

    I do not have POS for credit debit cards because banks charge a big commission  and Booking collects money for my structure but  does not charge for the deposit. I asked to Booking  on the phone a suggestion what to do for a damage discovered after the guest is out, Booking has told me that once the customer has gone away you cannot do anything..

    I would like sharing with the collectivity  how you check potential damages at the check out

    Maybe I should be more analitycal in the check out

    My best Regards

    Elena

  • Dear Elena,

    It's all about the POS and pre-authorization.

    Without that, you cannot really do much. 

    This way, I can check the rooms whenever and then if something was damaged, I charge them and send them an invoice for it, simple and no hassles. 

    Usually people tel me when something is damaged, also, they know that I'm going to charge them if they don't. It's always better to work out issues rather than try to hide it, it will cost you more and it will not be a happy day for either of us.

    So Elena, if need be, I can help you with your POS problem if you need such a solution. Just e-mail me.

    Best regards,

    Zsolt - www.thuild.com

  • Avatar
    Glennroy111

    I have 80% cancellations!!!  Booking is not CONDO friendly.  It's not an apartment or hotel.  Renters are supprised to learn then need to pay deposit and 60 days in advance.  So they cancel.  Booking needs to set up a CONDO division for their company ....they are missing out on SOO much business.

  • Dear Glenn,

    It can work for you, but not as you imagine it to be. 

    Booking.com is a platform with different type of guests. It is not the same type of people who use Airbnb or such type of platforms, therefore different expectations and conditions.

    Nobody is happy about paying a deposit. I wouldn't do that either, because when you have not shown that information at the search phase, then it would be very disappointing to find it later when you message me about it.

    Therefore, best practice is to process credit/debit cards, do non-refundable rate types with lower pricing or better conditions, have strict cancellation charges, in accordance with the competition and then, you will have a very low number of cancellations.

    The way you work is very risky. Booking.com can work for you, but you need to do it differently than you are doing it now.

    Best regards,

    Zsolt - www.thuild.com

  • Hi Glennroy111,

    I disagree because my Apartment is a CONDO and performs well on Booking.com. No Objections from my side.

    Have you filled all data regarding the propery in the property section on Extranet, and policies ragarding payment options. May be some details remained overseen but actually everithing is there.

    Try mining through those details on the page. Whis you best of luck in sorting out this problem.

    On the other side it also depends of the guests expectation for the location and place they are comming to. It's not the same renting CONDO in the city, or in the lovely seaside resort or a smaller city with lot of privatate houses, and rare buildings with condos.

     

     

  • Dear Elena,

    After messy start with deposits few years ago, and with actually good experience with the guests (suffering only minor damadge like broken glesses, plates, or cups)I've decided not to colect damage deposit.

    I have taken insurance policy from Incurance Company which covers all the risks for me. Up to now didnt need to activate it. So fingers crossed....The expence is aproximately 90 EUR (less than 7,5 EUR per month), and it gives me peace of mind.

  • Avatar
    Glennroy111

    I have 5 condos in the Panhandle of FL, USA.  They range from 900 to 1500 Sq ft and are obviously CONDOS and not a hotel.  I have a 60 day full refund cancellation policy with payment anytime after booking.  Still folks are surprised when they learn that I'm charging their CC for all or part of the rental amt. after they book.  Most times, they say "oh, I didn't know I needed to pay up-front".  The payment terms are vague and hard to find when they look at my listings.  That's the way Booking does it.  IMHO, they are missing out on a HUGE amount of Condo business in the USA.  About, 75 % of initial booking through Booking.com cancel.  Too bad for me and the company.  

  • Avatar
    Whitley Coach House

    We take a full non-refundable payment for all bookings, with no deposits or damage charges. We have insurance if a major problem arises. No booking is a booking until it is fully paid for in my view. 

    If guests cancel, one did today for 4 weeks from now I will phone them and possibly offer a stay within 6 months.

    I hate the notion that someone can book 5 different places for one night and cancel at the last moment if they wish to have a refundable booking they need to pay extra. Deposits are a hassle both for the guests and for us, so why bother?

    Booking.com and their competitors at now starting to realise that if they make a commision on a cancelled booking they actually make more money and potentially two lots of commission for the same room per night when it happens. Hopefully non-refundable will become normal practice and re-fundable will carry a fee.

  • Avatar
    Mathis1933

    As I read these complaints that I knew nothing about it is making me wiser and if I have to work that hard to make money then maybe there is a better way for me.  I have worked with other rental agencies and never ran into these type situations.  Wow!!!!!  It is always better to list with more than one agency.

  • Avatar
    Lindiewhite143

    I agree with Zsolt that Booking.com is used by different guests to AirBnB and other platforms. Figuring out what appeals to them without adding unnecessary risk while making a profit is the trick. Like Mathis1933 I hope to learn from the other partners on this forum.

  • Avatar
    Sam

    Thanks for all of the information everyone. I think we are going to waive the damage deposit that's required upon check-in.

    So here's a little more detail on the issue of credit card disputes in our specific case. I don't think I was clear. When guests come to stay in one of our apartments, there is no check-in desk where they receive keys or are greeted.

    They book online, we send them instruction on where the keys are located (usually in a lockbox on premises) and they let themselves in. Because we do not have a "front desk", we have no form of verification for a guest who checks in being the same person that is the credit card holder.

    This poses problems when a guest disputes that they stayed at one of our units. We don't have documentation (other than a receipt) and communications online to provide as evidence to credit card companies.

    I would not like to send one of my team over there to greet them and take their pictures. This is not scaleable and is mostly a waste of time as most guests don't ever arrive the time they say they will. Is someone running a similar business? How are you handling this? Thanks!

  • Hi Sam.
    I have one apartment an yes it is I bit frustrating wait to the guests to slow. Therefore in our communication I always require that they guve us a call one our before arrival. They usualy do so and we are all in peace. If not they have to wait in coffe shop across the street. And it works for me as it is more guest friendly.
    Nera

  • Avatar
    Whitley Coach House

    Sam

    If you have payment before they arrive, even days or weeks you really should not have payment issues. Also even if you or your staff are not there on their arrival, it is always well worth meeting them to show a friendly face and make sure they feel, welcome and valued.

     

  • Avatar
    Paul Johnston

    We have Holiday Apartments in Brighton UK. We take payment in advance (50% non refundable on booking - and the balance 30 days prior to arrival, again non refundable)

    We take a security deposit too, although recently we have begun taking Authorisation rather than an actual sale - this tends to avoid freaked out guests when they see £300 taken off their cards in addtion to the rental. We just void the authorisation when they leave - also we dont get problems with currency fluctation and card fees using this method.

    We always insist that the guest completes an online google form with all their details and ticks that they accept our rental agreement. We also insist that the lead guest send a photo of their passport by email. This weeds out most fraudsters and undesirables. We don't send the KEYCODE until they have done all this.

    We probably lose 1 out of 50 enquiries because of these stringent procedures, but I'm fine with that if it prevents some of the awful experiences we had in the early days.

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