How to Accept Credit Cards at Hotels

If you own or manage a hotel or another lodging type of business, you will have to accept credit cards in a way slightly different from other businesses. In this article I will offer you a set of best practices to build your payment processing procedures:

1. Get an incremental authorization approval if the hotel stay has been extended by your customer or if additional charges have been incurred. If incremental charges have been incurred, you will need to obtain an authorization approval only for the additional transaction amount that are expected be generated by the extension or by the additional charges. To do this:
   
   1. Follow your regular transaction authorization process for obtain an approval for the additional amount.
   2. In case your authorization request is rejected, do not proceed with the payment and instead request from the customer an alternative payment method for the additional amount.
2. Only submit for settlement the approved authorization amount if your authorization request for the incremental charges was rejected. You should:
   1. Only settle the already authorized amount and do not include any amount for which authorization was rejected.
   2. Contact your customer and request an alternative payment method for the rejected incremental amount.
3. Process an authorization reversal if the initially authorized amount exceeds the actual cost of the hotel stay. If this is the case, you will have to process an authorization reversal request for the difference between the authorization amount and the actual hotel booking agreement.
4. Use the final authorization and the 15% rules. At the checkout, authorization approval is required when:
   
   1. There was no original authorization. If this is the case, authorize the total amount.
   2. There was an initial authorization, but the final amount exceeds it. In this case, apply the 15% rule to estimate whether or not an additional authorization is necessary. Here is how to do this:
      
      1. Add 15 percent to the originally authorized amount.
      2. Compare the calculated total to the actual transaction amount.
      3. If the total amount exceeds the total, request an authorization for the difference between the initial authorization and the final transaction amounts.
5. Disclose and request acceptance of all terms and conditions of the sale. You must tell your customers what the terms and conditions of the sale are before they book a hotel room. In particular, you should disclose the following details:
   1. Your cancellation policy.
   2. Whether a "no-show" fee will be added to the total amount or billed separately.
   3. When the "no show" fee will be charged.
   4. How your name will appear on the cardholder's credit card statement.
   
   The disclosure of the above information will improve the quality of your service and help minimize customer inquiries and disputes which will inevitably minimize chargebacks.
   
   You should require that your customers accept your terms and conditions by clicking on an "Accept" or "Agree" button for the disclosure statement on your website.

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