How to Take Credit Cards At Hotels

Credit card acceptance at hotels, motels and other lodging types of businesses is done differently than it is at most other businesses. The are specific rules on how to take credit cards that need to be followed. Hotel managers and owners will have to be familiar with these rules and able to implement them into their credit card processing procedures.

The reason for these peculiarities is that credit card processing at hotels and motels follows a slightly different path than transactions at other types of businesses. In this article I will offer a step-by-step guide on exactly how to do it:

1. Often a customer will extend her stay. When that happens or, if additional charges have been incurred, there will be a need to obtain an additional authorization approval for the difference, not for the total final amount. Keep in mind that you have already received an authorization approval for the original amount and there is no need to do it again. Following are the guidelines on how to do this:
   
   1. Keep in mind that for the additional amount you will need to follow your standard transaction authorization process for obtaining an approval.
   2. Sometimes your authorization request for the additional amount will be rejected. When that happens, do not submit the payment for settlement. Instead ask that your customer provides an alternative form of payment (another card, check, etc.) for the additional charges.
2. If you have not received an authorization approval for the additional amount, only deposit for settlement the originally authorized amount. If the authorization request for the additional amount was declined, you should:
   1. Only settle the amount that was originally authorized, without including any amount for which authorization was rejected.
   2. Immediately call your customer and demand an alternative form of payment for the amount for which authorization was declined.
3. Request an authorization reversal if the originally authorized amount is greater than the final cost of your service. In such cases, you will have to request an authorization reversal for the balance between the originally authorized amount and the actual cost of the hotel stay.
4. Understand and use the final authorization and the fifteen percent rules. Be advised that at check out, authorization approval is required in the following circumstances:
   
   1. You did not obtain an initial authorization. If that is the case, issue an authorization request for the total amount.
   2. You did obtain an authorization approval originally, but the final amount is greater than the authorized one. Whenever this is the case, use the fifteen percent rule to estimate whether or not an additional authorization approval is needed. Here is how to do this:
      
      1. Add fifteen percent to the already authorized amount.
      2. Compare the so-received total to the final transaction amount.
      3. If the final transaction amount is greater than the newly calculated total, you need to request an authorization approval for the difference between the initially authorized amount and the final transaction amount.
5. Require that your customers accept the terms and conditions of the sale. You need to inform your customers what all of the terms and conditions of the sale are prior to them completing a reservation for a hotel room. More particularly, you need to disclose the following details:
   1. Your business' cancellation policy.
   2. Whether or not a "no-show" charge will be applied to the total amount or will be charged individually.
   3. When the "no show" fee will be charged, if applicable.
   4. The way your hotel's name will be shown on your customer's monthly credit card statement.
   
   The full disclosure of these terms will help limit customer inquiries and disputes which will, in turn, minimize chargebacks. This should be a primary goal for you, as chargebacks are extremely costly and time consuming.
   
   For best results, require that your customers accept the above-mentioned terms and conditions of the sale by clicking on an "Accept," "Agree" or another button to that effect under the disclosure statement on your website.