Refundable Damage Deposit

This feature allows you to withhold a specified amount from a guest’s credit card during the reservation process. This is commonly used to set up a refundable damage or security deposit.

An authorization hold (also called a pre-authorization) is a temporary hold placed on a customer’s credit or debit card for a specific amount. This hold reduces the available balance but does not actually charge the card unless the transaction is completed. When the reservation is finalized, you can capture the full amount or just part of the held funds, depending on the final charges. If the transaction is canceled or not completed, the hold will either be released by the merchant or will automatically expire, returning the funds to the guest’s available balance.

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

1. 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

2. Include Damage Deposit Collection from the total reservation price. Do not exclude 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 7 days after it is created. This timeframe is set by Stripe. You can set up an Auto-renewal schedule that allows HW to auto-renew the pre-authorization after its expiration. Automatic renewal is only available for Stripe.

  • For Authorize.net . The Pre-authorization expires 30 days after 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 be created automatically through Auto-Payments or manually directly in Hostaway by clicking Add Transaction on the Reservation or Guest Payments page. There is no longer a need to create them manually inside 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

1. Go to your Hostaway Dashboard > Listings > Choose the listing > Click on Edit

2. Go to Price & Fees > Refundable damage deposit fee > Add the amount
   
   
    

3. 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 synced 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

1. Go to your Hostaway Dashboard > Reservations > Guest Payments > Auto-payments

2. Click on + Add auto-payments in the upper-left corner or select an existing one
   
   
    

3. If you're creating one, enter a title and the channels you would like the auto-payment to apply to and click Save. 

4. Then click on + Add auto-payment on the right-hand side
   
   
    

5. Enter the Type of auto-payment; in this case, Pre-authorization

6. Enter the Name, for example, Refundable Damage Deposit

7. Enter the amount, payment method, and scheduled time

8. Save

Notes

• If you want to add a new listing automatically to the Auto-payment created, make sure to select the checkbox "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 7 days after the pre-auth creation, so the scheduled Pre-Auth should be "x days/hours before checkout"
• Authorize.net Pre-authorizations expire after 30 days of the pre-auth creation, so the scheduled Pre-auth should be "x days/hours before checkout"

3. Create an Automated Pre-authorization Renewal Schedule

The pre-Authorization renewal schedule can be created in two ways on the Hostaway Dashboard: 

Option A: Setting up a new Auto-payment template or editing an existing one.

1. Go to your Hostaway Dashboard > Reservations

2. In the left side panel, click on Guest Payments

3. Click on + Add auto-payment
   
   
    

4. Fill out the Add Auto-payment form

   • Note: Payment method is defaulted to Payment (Online)
     
     
      

5. Enable “Enable Renewal of Pre-Auth” by toggling the switch to the right, then complete the renewal schedule.
   
   
    
   1. Note: Pre-Auth renewal can only be scheduled up to 2 days after check-out.
       
6. Click Save to close the auto-payment form

7. And then click Save in the right-hand side corner
   
   
    

   • The existing Auto-Payment template can also be edited by clicking on the name of the Auto-Payment
      

Option B: Manually adding a Pre-Authorization through the Guest Charge Table or to a Reservation directly

1. Go to your Hostaway Dashboard > Reservations

2. In the left-hand side panel, scroll down to Guest Payments

3. In the upper tab, stay on Charges
   
   
    

4. Then click on + Add transaction in the upper right corner
   
   
    

5. Alternatively, go to the Reservation section, choose a reservation, scroll down to the Payment section, and under Charges click + Add Transaction. 
   
   
    

6. A right-side window will open for you to enter the transaction details
   
   
   
   Note: Manual pre-authorizations are only available through the Payment Link payment method. Hosts must share this payment link with the guest to collect payment and card details for subsequent transactions.

How to Capture Fully or Partially the Damage Deposit

From Guest Payments

1. Go to your Hostaway Dashboard > Reservations
2. In the left side panel, click on Guest Payments
3. In the upper tab, stay on Charges
4. To quickly find the reservation, filter by Type & status and select Hold success
   
   
    
5. Click on the three dots at the end of the row and click on Capture now
   
   
    
6. A new window will open; enter the amount you would like to capture
   
   
    
7.  Click on Capture

From Reservations

1. Go to your Hostaway Dashboard > Reservations
2. Choose the reservation and, at the end of the row, click on the pencil to edit the reservation
3. Scroll down till you find the Payment section > Charges
4. Click on the three dots and click on Capture now
   
   
    
5. A new window will show up  > Enter the capture amount 
6. Click on Capture
    

Important: Capturing a pre-authorization can only be done once. If a partial capture is performed, the payment processor (Stripe) will immediately release the remaining balance back to the guest. This is a standard behavior of payment providers and cannot be overridden by Hostaway.

Capture Refundable Damage Deposit from Stripe

1. Once the status of the Pre-auth is Hold success
2. Go to Stripe > Search for the guest and capture the required amount
3. Once the amount is captured, Stripe will immediately refund the rest of the held amount to the guest’s credit card.
   
   Note that you can use the View in Stripe option in Hostaway to access the reservation and capture the amount. 
   
   
    

Manual Pre-Authorization for Refundable Damage Deposit

1. Go to Guest Payments > Charges > Click Add Transaction.
2. Select Type as Pre-Authorization.
3. Select the Reservation, enter the Amount, and choose the Payment Method.
4. Click Add Pre-Authorization.

Note: If card details are missing, send the Guest Portal link to the guest first. Once they update their card details, they will appear in Hostaway, and you can follow the steps above