Vacation rental
damage deposits

A damage deposit (also called security deposit) is a pre-authorized amount held on a guest's credit card to cover potential property damage during their stay. The hold is placed at booking or check-in and released automatically after checkout if no damage occurs. If damage is found, you capture all or part of the held amount. The guest is only charged if you claim damages.

A credit card authorization hold reserves funds on the guest's card without actually charging them. Think of it like a hotel putting a hold for incidentals. The amount (typically $250-$1,000) appears as 'pending' on the guest's statement. If no damage occurs, the hold is released automatically after checkout and the guest is never charged. If damage occurs, you capture the held amount (partially or fully) through your Stripe dashboard.

In vacation rentals, the terms are used interchangeably. Both refer to funds held to cover potential property damage. The key difference is method: a traditional security deposit charges the guest upfront and refunds after checkout, while a credit card authorization hold reserves the amount without charging. Authorization holds are preferred because guests aren't out-of-pocket and you pay zero Stripe fees unless you capture for damage.

No — not unless you claim damage. With DirectBookings, the damage deposit uses a credit card authorization hold. The amount is reserved on their card (shows as 'pending') but no money actually moves. After checkout, the hold automatically releases. The guest only gets charged if you capture the deposit for actual damages. This is why guests prefer authorization holds over traditional charged deposits.

Most vacation rental hosts set damage deposits between $250 and $1,000 depending on property value and risk level. Common ranges: Studio/1BR: $250-$500. 2-3BR family home: $500-$750. Luxury/large properties: $750-$1,500. The deposit should be high enough to cover common damage scenarios (broken items, stains, excessive cleaning) but not so high that it discourages bookings.

No. Authorization holds through Stripe cost you nothing. Stripe only charges its 2.9% + 30¢ fee if you capture (charge) the deposit for actual damages. If the hold is released without capture (which happens 95%+ of the time), there are zero fees. This makes authorization holds the most cost-effective way to protect your property — you only pay when you actually need the money.

Stripe authorization holds are valid for 7 days by default. For vacation rentals, this means: the hold is placed at booking or check-in, and you have up to 7 days after the hold to capture or release it. For longer stays, DirectBookings can be configured to place the hold closer to checkout to ensure the full 7-day capture window is available for your damage inspection period.

If damage exceeds your deposit amount, you can capture the full deposit and then pursue the additional amount separately. Document all damage with photos and timestamps, send the guest an itemized claim, and if they dispute it, you have the signed rental agreement and photo evidence. Having a signed agreement (collected during DirectBookings check-in) strengthens your legal position for claims beyond the deposit.

Airbnb replaced traditional damage deposits with their AirCover program. Hosts can no longer collect security deposits through Airbnb directly. AirCover provides up to $3M in protection but many hosts find the claims process slow and unreliable. With your own direct booking website, you control the damage deposit process entirely — set your own amount, use authorization holds, and capture instantly if needed without waiting for platform approval.

In your DirectBookings dashboard: go to Property Settings → Damage Deposit → Set amount (e.g., $500). When a guest books, Stripe automatically authorizes the deposit amount on their card. After checkout, you can either release the hold (automatic after your inspection window) or capture it for damages. The entire process is automated — no manual payment collection or refund processing needed.