Charging Processing Fees When Giving "Full Refund"

  • Newcomer

    Trying to figure out how to deal with an ongoing issue with regards to guest cancellations. We generally have a strict booking policy but offer “full refund” if notified 60 days prior to arrival.

    However, in our rental agreement we have terms that guests accept that state if they cancel we do charge a 6% processing fee for all refunds to cover our out of pocket due to merchant service fees. All credit card processors (we use Stripe) generally do not refund the processing fees (they do a tiny fraction) when processing refunds.

    In this case we are seeing an uptick of guests making bookings - realizing after they have booked that they either need a bigger home, or have changed their mind on location etc. This is costing us upwards of $60 - $120 per canceled booking so we instituted the 6% fee on cancellations.

    I need to figure out a way to convey that in VRBO etc (any system that is hitting our Stripe account for payment). I have a current guest balking at it due to “not signing our agreement” which is sent via Docusign directly after booking. They are relying on the “Full Refund With 60 Days Notice” as they see it on VRBO.

    It’s b.s. because these people are costing us money from being unprepared and changing their minds.

    How do we do this?

  • Contributor

    The challenge comes if they turn to VRBO.

    VRBO won’t support withholding those fees because Custom Cancellation Terms are available, but MyVR does not yet have them built out.

    Believe Stripe changed their terms January 1, 2018. We put in a request for that feature a while back when we discovered the issue.

    Our highest cancellation rate (65% !!) was, so we simply changed our cancellation policy to “No Refunds Ever”. Now we get very few bookings, but we were losing money before that. Seems a better solution.

    But yes, VRBO used to be 2 cancellations a year for us and now they are at 17% nationally. It’s a serious issue.

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