How to Automate Security Deposits for Direct Bookings

How to automate security deposits is a question that applies in more than one situation. Firstly, it could apply to bookings that come through channels like Booking.com or Expedia. In such cases, the channel does not provide the host with an option to automate the management of security deposits. More importantly, it also applies to direct bookings. These are bookings a host takes through their website, over the phone or by e-mail. Read on to find out how you can automate security deposit booking.com. Learn to avoid the hassle and risks that can come with doing it manually.

What is a Security Deposit and why do I need one?

A security deposit, or a damage deposit, is a term used to describe funds that are held from guests to cover a number of potential costs. These could be damages caused by the guest or monies withheld for breaking house rules. You need to keep a security deposit if you want to make sure that you are not left out of pocket. Most hosts do, however, there are some that don’t, to encourage more bookings. Ultimately, it is a call that you need to make for each of your properties. Base this on your risk appetite and the market you are serving.

How do I manage Security Deposits for Direct Bookings?

In some cases, a host will ask the guest to transfer funds or will take cash. Alternatively, they may charge their card, and pay this back to the guest at the end of the stay. In others, they will keep a security deposit as a pre-authorisation from a guest’s card, similar to what happens when you rent a car.

While the second approach helps save some time, and can even be done remotely, there are issues such as chargebacks and risk of fraud that can occur. These happen when a host enters card details in their payment processing gateway to pre-authorise funds. This can be done manually, or by way of details passed through the channel manager/booking engine.