Refundable Damage Deposit or Pre-Auth FAQs
What is a pre-authorization?
Authorization hold, also known as card authorization, pre-authorization, or pre-auth, is a service that credit and debit card providers offer. It involves the provider placing a hold on the amount approved by the cardholder. This hold reduces the balance of available funds until the merchant completes the transaction (capture), cancels it, or the hold expires.
How long does a pre-authorization remain valid before it expires?
Pre-authorization validity windows are determined by Stripe and cannot be modified by Hostaway.
The specific timeframes vary depending on the transaction type and payment method used.
When a pre-authorization expires, the held amount is automatically released, making the funds available again on the guest's credit or debit card.
Important note: These are the standard hold times set by Stripe. For the most current and detailed information about specific validity windows for different transaction types, we recommend checking directly with Stripe's documentation or contacting their support team.
What is the minimum amount that can be held or pre-authorized?
The minimum amount that can be accepted is 0.5 cents or the equivalent amount in any currency. 0.5 cents or the equivalent in any currency.
What distinguishes capture from the charge?
Capturing an amount only applies to pre-authorization. It instructs Stripe to charge the requested amount from the pre-authorized amount, whether it's a full or partial amount.
When you charge a card, you are taking a specific amount from a debit or credit card. This action is not dependent on any pre-authorized amount. It's important to note that charging a card that already has a hold on it does not mean that the held amount will be captured. Instead, you will only take the amount that you have charged from the card.
When a credit card is authorized, the bank places a hold on those funds for a certain time. When you capture a payment, the funds are charged to the person's card, and the previous authorization is removed from the credit card. On the other hand, when you simply charge a credit card, it only charges the card and does not remove the authorization amounts placed on it.
When you capture a pre-authorized amount partially, what exactly happens?
It's important to note that capturing payment can only be done once. If you capture a portion of the pre-authorized amount, Stripe will automatically release the remaining funds back to the guest's card. For example, if you pre-authorized $400 and captured $100, Stripe will immediately refund $300 to the guest's card.
Can Braintree be used to create pre-authorizations?
Unfortunately, at the moment, this specific implementation only functions with Stripe-connected accounts.
Will I be able to view the amounts that have been captured in Financial Reporting?
The pre-auth feature does not support reporting captured amounts in Financial Reporting. To see reports on pre-auths and amounts captured/released, use the Charges tab in Guest Invoicing.
Will I see pre-authorized amounts in reservation breakdowns for Hostaway Direct Channels?
Not at the moment.
Can I create a manual pre-auth?
Yes, you can create a manual pre-authorization in Hostaway. This feature allows you to temporarily hold a specified amount on a guest's credit card to cover potential charges.
You can add a manual pre-auth from two places in the Hostaway dashboard:
Option 1: From the Guest Payment Page
- Navigate to Guest Payments > Charges.
- Click on Add Transaction.
- For the Type, select PreAuthorization.
- Fill in the details: add an optional description, select the reservation, enter the amount, and choose the payment method.
- Click Add Pre-Authorization.
Option 2: From the Reservations Page
- Go to the Reservations tab and select the specific reservation.
- Scroll down to the "Invoices and Charges" section and click Add Transaction.
- Follow steps 3-5 from Option 1.
Important Considerations:
- Amount Limit: The pre-auth amount must be less than or equal to the total amount due for the reservation.
- Status: The pre-auth is created with an "Awaiting hold" status. This will change to "holdSuccess" or "holdFailed" after the payment service provider (e.g., Stripe) processes it. If the payment method is a "Payment Link," the status will remain as "awaitingHold".
- Payment Processors: This feature is available for accounts connected to Stripe and Authorize.net. It is not supported by Braintree.
- Capturing Funds: You can capture the held amount fully or partially. However, capturing can only be done once. If you perform a partial capture, Stripe will immediately release the remaining balance back to the guest's card.
- Permissions: If you cannot see the "Add Transaction" button, it may be a user permissions issue. The main account owner may need to grant you the necessary "Financial Reporting" permissions (View, Modify, Create, Delete) in the User Management settings.
Does an auto charge need to be created for pre-authorizations to work?
No, an auto-charge of the "charge" type is unnecessary for pre-authorizations to work. You will only need to create an auto-invoice with an auto-charge of the type “pre-authorization” for the feature to work.
When creating a pre-auth for a %, what is the % calculated against?
The % is calculated against the total price of a reservation. So, if a reservation is 1000 $ and the pre-auth is for 10%. The amount held (pre-authorized) will be 100$.
Can I create pre-authorization for authorize.net?
Yes, you can create a pre-auth for authorize.net A pre-auth expires after 30 days of the pre-auth creation. This timeframe is set by Authorize.net and it 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 again.
Please follow the user guide on How to create an auto-auth / Refundable Damage Deposit
Important Note: For Authorize.net A pre-auth expires after 30 days of the pre-auth creation, so create the invoice X days or X Hours before the checkout.
Can I create another pre-authorization for the same reservation once the first one has expired?
The pre-Authorization renewal schedule can be created in two ways on the Hostaway Dashboard. Please take a look at the article Create an Automated Pre-Authorization for Refundable Damage Deposit.