Refundable Damage Deposit

This feature allows you to withhold and collect a specified amount from guests' credit cards during the reservation process, as a means of setting up refundable damage or security deposits.

Authorization hold (also known as card authorization, pre-authorization, or pre-auth) is a service offered by credit and debit card providers whereby the provider places a hold on the amount authorized by the cardholder, reducing the balance of available funds until the merchant completes the transaction (capture), cancels it or the hold expires.

You have two options when setting the Damage Deposit on Hostaway:

Exclude Damage Deposit Collection from the total reservation price. You should create an Auto-payment with two lines, one for the charge and one for the Pre-authorization
Include Damage Deposit Collection from the total reservation price. Not excluding the damage deposit from the reservation total price. The created Auto-payments must only include charges covering 100% of the reservation amount (the "rest of pay" type of charge can be used). Please remember that you will most likely pay a commission for processing and refunding.

Since the first option is the one we consider the most convenient for our customers as it will be exempt from commissions from the payment processor, in this article you will find all the steps you have to take on the Hostaway Dashboard to set up the damage deposit.

Important

This feature is only available for Stripe-connected accounts and Authorize.net. Braintree is not supported
- For Stripe. The pre-authorization expires after 7 days of the pre-auth creation. This timeframe is set by Stripe
- For Authorize.net. The Pre-authorization expires after 30 days of the pre-auth creation. This timeframe is set by Authorize.net
- The above-mentioned time frame cannot be changed from Hostaway. Once the pre-auth expires, the amount held will be released and the guest will have that amount available on their credit/debit card
Captured amounts are not reported in the Financial Reporting
Captured amounts are not reported in the Reservation Financial Breakdown
Captured amounts are not reported in the Guest Portal under "Invoices & Receipts"
Pre-Auths can only be created through Auto-Payments and Auto-Charges. They cannot be created manually in Hostaway. You can manually create them in Stripe
Pre-Auths can be created through Auto-payments without the need to create an Auto-Charge

Learn more with the Pre-Authorisation FAQ

How to Create an Automated Pre-Authorization

1. Set Refundable Damage Deposit

Go to your Hostaway Dashboard > Listings > Select the listing > Click on "Edit"
Go to Price & Fees > Refundable damage deposit fee > Add the amount
Click on the gear icon next to the value to
- "Exclude the damage deposit from the total reservation sum". Mark this option if you want to exclude the damage deposit fee from the total amount in Vrbo, Booking Engine, WordPress, and direct reservations. In this case, it is expected that the guest will pay the damage deposit at your place. This checkbox is unselected by default
- "Send to Airbnb". Mark this option if you want the refundable damage deposit to be sent to Airbnb. This checkbox is selected by default so Hostaway will continue to sync the offline security fee with Airbnb and all other channels
  - If you uncheck the box and
    - Update the damage deposit on Hostaway > select “Save & Export“. Hostaway will sync the listing content with Airbnb but will skip the damage deposit. The damage deposit will not be removed from Airbnb by unchecking this box
    - Update the damage deposit on Hostaway > select “Save & Export“. The damage deposit will be synched with other channels normally, except for Airbnb
  - If you want to remove the damage deposit from Airbnb:
    - With the checkbox checked set the damage deposit to 0, select “Save & Export“ (this will update the damage deposit to 0 on all channels); uncheck the checkbox, set the damage deposit to whatever you like, select “Save & Export“ (this will set the damage deposit back on all channels except for Airbnb)
    - With the checkbox unchecked, select “Save“, and remove the damage deposit from the listing manually (directly from Airbnb). On further listing syncs, Hostaway will not send the damage deposit to Airbnb

2. Create an Automated Pre-authorization

Go to your Hostaway Dashboard > Guest Payments > Auto-payments
Click on "Add auto-payments" or select an existing one > "Add auto charge"
Select "Pre-authorization" from the dropdown
Choose a title, method, amount, and scheduled time
Save

Notes

If you want to add a new listing automatically to the Auto-payment created make sure to select the check box "Apply to new listings automatically"
If you have different damage deposits for specific listings make sure to create a separate Auto-payment
Please read this article about Auto-payments
Make sure you only have one Auto-payment for the same channel for each listing

Suggestion for "Scheduled by"

Stripe Pre-Authorizations expire after 7 days of the pre-auth creation, so schedule Pre-Auth should be "x days/hours before checkout"
Authorize.net Pre-authorizations expire after 30 days of the pre-auth creation, so schedule Pre-auth should be "x days/hours before checkout"

How to Capture Fully or Partially the Damage Deposit

From Guest Payments

Go to your Hostaway Dashboard > Guest Payments > Charges
Select the relevant hold success > Click on the three dots and click on “Capture now” > Pop up will appear > Enter the amount > Click on Update

From Reservations

Go to your Hostaway Dashboard > Reservations > Go to Invoices and Charges > Go to Pre-auths > Click on the three dots and click on “Capture now” > Pop up will appear > Enter the amount > Click on Update

Capturing can only happen once. If a partial capture is done, Stripe will immediately refund the rest of the held amount to the guest’s credit card. This is a behavior of Stripe and cannot be changed.

Capture Refundable Damage Deposit from Stripe

Once the hold is a success > Go to Stripe > search for the guest > and capture the required amount, Once the amount is captured Stripe will immediately refund the rest of the held amount to the guest’s credit card.

Workaround to capture the Damage deposit if the Pre-Authorization was not set or it was not captured

If the credit card details are available in Hostaway > Go to Stripe to create a pre-auth because Hostaway does not allow creating manual pre-auths (only automated ones, If you charge it manually when you try to refund, you will be charged a commission on the refund) this is not possible.

You can do this, however, directly in Stripe by searching for the customer and creating a payment only as pre-auth:

If the guest's credit card is not available please send the Guest portal link to collect the credit card details - For more information on Guest Portal > once the Credit card details are updated > Please navigate to Stripe >create a pre-auth via Stripe