ccidents happen. If you are running a rental business, then this can (and does!) occur during your season. You have expensive equipment that your are entrusting to customers, and sometimes carelessness on their part can cause damage to the equipment. So how can you as the business owner protect yourself and your wallet from damage to equipment?

The answer is a pre-authorized damage deposit when customers take out the equipment.

What is a Pre-Authorization?

Simply put the pre-authorization is a hold placed on a customer's credit card, and reserves funds for a future payment. During the hold period, the funds are not accessible to the customer, so they cannot withdraw it or spend it elsewhere. The length of the hold can be determined by the business, or will automatically be released by the processor.

Why is a Pre-Authorization important?

Renting high dollar equipment such as pontoon boats, jet skis, or jeeps can put a lot of stress on the business owner. This is why is important that anyone who rents from you know the rules and understand and accepts them via a waiver. In addition, adding a pre-authorized damage deposit when the customer arrives to pick up the equipment will give you peace of mind that any damages will be covered by the renter. It's a valuable tool to manage the risk involved with renting equipment.

Let's dig deeper into the benefits of a pre-authorized damage deposit.

1. Ensures any damage to the equipment will be covered by the deposit.

You can be confident renting out your expensive equipment knowing you are covered with the deposit. If damage does occur, you have the authorized funds from the customer to pay for it. When determining a deposit amount, consider the potential damages and cost involved, and then choose an amount that will match or exceed that.

2. Avoids credit card fees for refunds

Payment processors do not consider an authorization as an actual charge, so if/when you release the funds back to the customer, you will not be charged any credit card fees for the release. Credit card fees are only incurred when there is a transaction.

3. Reduces chargebacks

As with credit card fees, since there is no actual transaction with the authorization, the customer will not be charged hence reducing any chargebacks that may occur if the damage fee was charged up front. If there is damage to the equipment, and the costs of repair are discussed with the customer as well as a signed waiver, then these steps will make a great case for any chargebacks that the customer may attempt for damage charges.

4. Increases customer satisfaction

Yes, your customers will be more satisfied with your service. The reason is that customers understand that they are responsible for the equipment they rent from you. They will appreciate the authorization instead of charging them for the damage deposit. The authorization is temporary and will be released without having the wait for a refund if they were charged.  This is especially true for the customers who are careful with your rented equipment and return it in good shape. You want to keep these customers and have them back year after year.

BookingCentral offers this great feature to all rental businesses that use the booking platform. It's easy to set up and manage. The feature allows you to do the following with one click:

  • Set the damage deposit amount
  • Set the release time of the authorization
  • Authorize the damage deposit on the order upon arrival
  • Release or charge the deposit after the rental


At BookingCentral, we are committed to providing businesses with the necessary tools to run their business efficiently. We partner with you to provide a booking platform that takes the pressure off of you with an easy manage platform. If you want to learn about this feature and more, reach out to our team of experts today.

Sep 3, 2021
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