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Security deposits present a unique challenge, not only in running your rental property but also in determining how Bookerville should treat them.

Generally, it would be nice to have a field on the Booking Details page that shows how much of the security deposit has been paid. When the field equals the amount of the required security deposit, the security deposit is paid in full. There should be another check box that lets you indicate whether you've refunded the security deposit or not.

The problem arises when payments start arriving for the booking. How does Bookerville know if the payment is for a security deposit?

A popular approach is to force the customer to pay the security deposit as a separate item. PayPal makes this possible with their advanced shopping cart features, and this may also be possible with

Another thing to consider is that it would be nice to permit customers to pay for the whole amount in one transaction if they want to. For example, imagine a booking that totals $1,000. There is a separate $300 security deposit. The customer decided to go ahead and pay all of it at once, causing a single payment of $1,300 to appear in the Payments Made box in the Booking Details page. How do we account for this, and show that the balance due for the booking is actually zero, not $300 overpaid?

I suppose if the total amount paid is exactly equal to the total booking plus the security deposit required, then we can make an assumption, but the trouble comes when the total payments made don't add up to that figure. How much of the payments made to date should be applied to the security deposit vs. the total due for the booking?

We're open to ideas and suggestions...

8 Responses:

John Amato, September 8, 2011:

After giving it some thought, and considering the variety of scenarios that can arise, as well as the needs of our members, we are now leaning towards the following solution.

The Payments Made box in the Booking Details page will have a new column added to it that indicates whether a payment is for a security deposit or towards the booking total. You will be able to edit this indicator, so even if the automated payment process mis-flags something, you'll be able to rectify it. This also handles the scenarios where customers go ahead and pay all or part of the booking, as well as the security deposit, in a single payment. (You can just split them out.)

We are also thinking that when a security deposit is required, then the Payment Page for the booking will provide two payment buttons - one for the security deposit, and another to remit payment(s) for the booking total.

John Amato, September 8, 2011:

Some members have pointed out recently that PayPal has a "free refund" policy of 60 days. In other words, if you refund a transaction within 60 days, all fees are reversed.

This is very appealing for handling security deposits, but it complicates collection because you need to wait to collect the security deposit until the check-out date is maybe about 55 days away, to give yourself enough time to verify no damage, etc.

It also of course won't work if you have a policy of collecting the security deposit as part of the pre-payment to secure bookings, when someone books more than 60 days out.

Just fyi...
dlxhivac, September 14, 2011:

Another way of handling a security deposit (SD) is to do a credit card preauthorization for the SD jsut prior to check in. Elavon (Costco's credit processing service for business members) will hold a preauthorization for 30 days. will hold a preauthorization for 30 days. Is there any low cost credit card processing service that offers low or no cost preauthorizations for longer than 30 days?
Ricardo Torres, March 23, 2015:

I guess I'm missing something, because the deposit variable should be a unique one, and should show up on an invoice - same as "pet fee" or "cleaning fee", in my opinion. It should be a straight forward part of any transaction, and the only question would then be how does the refund work. Which, a refund should be automated unless there was a problem. At that point, intervention is necessary anyway, and the necessary work must be put in.

I don't think it should matter what money has gone to what, so long as the math ads up and the invoice is paid.

My trouble comes in when charging a mandatory damage deposit that isn't treated as a mandatory payment in the payment gateway. I'd much rather be responsible for periodically, manually sending deposit refunds, rather than babysitting the development of each incoming transaction, determining whether it's been paid in full or if I need to spend more time asking the guest to pay the separate charge, then determining if it's then okay to send them their Check-in Details. SO MUCH margin for error that way, as opposed to say, simply making Tuesday "deposit refund day".

HomeAway collects these along with rent, and refunds them a few days after unless we contact them with an argument as to why not. They also have a disclaimer to guests, managers and owners alike - that they are not responsible for mediating the circumstances.

In my utopia, we'd set a deposit as "mandatory", would collect it. Then, we'd receive an automated email that states, "Act now, or your refund will be processed". And, voila.

Right now, I'm flummoxed, because we "sent a refund" or a refund email to someone who booked through AirBnB (meaning, we had no control over her transaction). But, our system told her that we emailed her her refund, even though she didn't pay one (and I'm having trouble keeping up with it, because it's treated so separately from the invoice). I think this particular customer didn't even ever pay a deposit. So, that's another issue.
John Amato, March 25, 2015:

Ric - you've touched on one of many (very many) aggravating issues with (refundable) security deposits. Each listing site (if they are facilitating bookings for you) has their own policy, and they don't communicate that to Bookerville.

Suffice to say, because of these issues with refundable security deposits, the industry is moving away from them, in favor of (mandatory, non-refundable) Damage Protection insurance. It is so much easier to manage, and moreover can be a lucrative profit center for the property manager.

Bookerville has partnered with, which can be set up to automatically handle damage protection policies and also travel insurance. It'a all automated too, which is another huge plus.

Learn more: Bookerville and
Ricardo Torres, March 25, 2015:

The thing about insurance policies is that, IF there is any recourse, it's after weeks of deliberation, paperwork, etc. The loopholes are just enough to raise the daily cost of running an STR business. Suddenly, replacing a lamp becomes "not worth the trouble" of filing an insurance claim (when one could simply replace, deduct, and reimburse the difference of a deposit).

We tried to file our first claim through one of those services (maybe RentalGuardian...through HomeAway) about 2 months ago. The people said that it would be about 2 weeks. We had to contact them after 3 weeks, to ask what the holdup was. At that point, they said we had never sent them any info, which we had. So, we re-sent. Followed up. And still have not heard back.

I am NOT HAPPY with my first experience with STR insurance. It seems like a noble idea that quickly turned into someone's effortless payday.

Anybody out there have a good experience with STR insurance claims?


- Ric
John Amato, March 25, 2015:

It seems that either way you're going to get hassled. The same thing applies to Refundable Security Deposits (RSDs): all the guest has to do is deny they did it, and they can refuse to pay it. Credit card companies routinely deny RSDs - as soon as the customer complains about it, the credit card company will chargeback. It can take weeks (months?) of arbitration just to arrive at the conclusion that the credit card co. is siding with the guest. Case closed. is doing some very interesting things lately. I'm not permitted to talk about it yet, but they are making improvements that could make your life much easier.

Besides: if you're going to get hassled either way, wouldn't you rather at least make additional revenue from it?
PACVL, May 28, 2015:

Love the idea of Damage Protection Insurance but for the "little guy" with less than 10 properties Rental Guardian is not an option. And I think they (Rental Guardian) are really the only ones that offer it. Another thought might be to charge a "fee" that ends up going into your own "reserve" for those instances when you need it. IE you become self insured... RSDs are definitely a detractor for some renters and the higher they are the more of a detractor they become.

So along those lines I would like to request that you use the current logic in the system to allow the guest to choose which they would like... but you add logic that allows each of them to be considered taxable or not. RSD for me is non-taxable... insurance options (whether self or with a company) are taxable. I could then give the guest the option of which they would like and collect the appropriate taxes when necessary.

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