Hold or charge a guest's card for a deposit?
Whether a hotel should hold a guest's card rather than charge a deposit and refund it later, what refunds cost, and how Achekam fits around card deposits.
By Achekam · · 4 min read · For Hospitality businesses in South Africa, Nigeria, Kenya
A guest checks in for two nights. The front desk takes a security deposit against the minibar, damage and late check-out. Two days later the guest leaves, nothing is owed, and the deposit is refunded. The guest is happy; the hotel has quietly paid card fees on a charge it gave straight back.
Multiply that by every guest in a month and the cost is real. There is another way to handle deposits: place a hold on the card and only take the money if it is needed. This article explains the difference between charging and holding, what payment providers say about the costs of refunds, and how a hotel, lodge or guesthouse in South Africa, Nigeria or Kenya can fit either approach around its books in Achekam.
Charging and refunding is not free
Stripe's documentation sets out the cost difference plainly. A payment can be cancelled before it is completed at no cost, while refunding all or part of a successful payment might incur a fee, and the processing fees from the original transaction are not returned.
Other card processors set their own terms, so check yours. But the principle is common: a deposit that is charged and then refunded tends to cost the business something, even though the guest ends up paying nothing. A deposit that is held and released need not.
There is also the guest's experience. Stripe explains that a refund issued shortly after the original charge may appear as a reversal, in which the original charge drops off the customer's statement and no separate credit is issued. A refund issued later appears as a separate credit, which some guests find confusing when they check their statement and see both a charge and a refund.
Authorise now, capture later
The alternative is to separate two steps that a normal card payment combines:
- Authorise. The card issuer confirms the funds and holds them against the card, but the money does not move.
- Capture. The business takes some or all of the held amount, or releases it.
Stripe recommends that businesses processing a large volume of refunds close to the time of the transaction use manual authorisation and capture, so they can cancel payments before capture or reduce the captured amount instead of processing a refund. Hotel deposits fit that description exactly: most deposits are released within days, and the few that are used are usually used only in part.
For a guest who leaves owing nothing, the hold is cancelled. For a guest with a minibar bill, the hotel captures just that amount and the rest of the hold falls away. The Stripe guide to refunds and cancelling payments explains cancelling before capture, the cost of refunds and how refunds appear to the customer.
Holds are not available everywhere. Whether your card machine or online gateway offers authorisation and later capture, how long a hold lasts and what it costs depend on the provider, so ask yours before you change your front-desk procedure.
When you must refund instead
Sometimes the money has already been charged: a prepaid booking, a deposit taken weeks before arrival, a guest who insisted on paying in full. Then a refund is the only route.
Stripe states that a business can issue more than one refund against a charge but cannot refund a total greater than the original charge amount. That works well for a hotel that refunds in stages, for example part of a deposit at check-out and the rest once a damage inspection is complete. It also sets a ceiling: you cannot refund more than you took, so any goodwill gesture beyond that has to be handled another way.
What Achekam does and does not do with cards
Achekam does not hold cards, place authorisations or capture payments. It never charges a business's customer automatically: there are no saved cards or debit orders, and credit-control reminder e-mails carry no pay link. A hold on a guest's card is placed and released through your card machine or gateway, entirely outside Achekam.
Where Achekam helps is with deposits that are paid in advance by link, and with keeping the books straight afterwards.
Deposits by pay link, refunds in the gateway
For an advance deposit, such as a group or event booking, a business can create a payment link for an issued customer invoice, copy it or e-mail it with the invoice, and the customer pays on a public page that shows the business's name and branding. There is no link for a draft or voided invoice. A link lasts 14 days by default, and the firm can set any period from 1 to 720 hours; an open link for the same amount is reused rather than duplicated. Taking deposits on group bookings is covered in group booking deposits without a pro-forma.
A deposit paid by pay link is a completed payment, not a hold. If it has to be returned, the refund is not sent through the gateway by Achekam: it is made in the gateway's own dashboard and recorded in Achekam by a person. Build that into your procedure, so the refund in the gateway and the record in the books are always done together, by the same person or in a fixed sequence.
The same thinking applies to refundable deposits outside the hotel trade; see refundable damage deposits on equipment hire. Handling deposits clearly also helps avoid card disputes, which are covered in stopping card disputes before they start at a hotel.
Choosing your approach
Ask your card provider whether it supports authorisation and later capture at the front desk, what a hold costs and how long it lasts. If it does, use holds for security deposits at check-in, and keep charges for deposits that secure a booking in advance. Whichever you use, write the deposit terms on the booking confirmation, so the guest knows what will be held or charged, and when it will be released.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
