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.
When does a pre-authorization expire?
After a pre-authorization is created, it will expire after 7 days. Stripe has set this timeframe and it cannot be modified by Hostaway. When the pre-auth expires, the held amount will be released, making the funds available again on the guest's credit/debit card.
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?
No, at the moment Hostaway only supports automated pre-auths. To create a pre-auth, you will have to create an auto invoice with an auto charge of type “pre-authorization”.
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?
Because Hostaway doesn't allow creating manual pre-auths (only automated ones) 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: