Hotel reservation on credit card

kuratowski

When reserving a hotel (but not paying in advance) you give your credit card details, which they hold on file to bill you in case you don't show up - which could be in several months' time. Totally standard practice.

My question is, and this is merely idle curiosity, have I given the hotel some sort of Continuous Payment Authority? By submitting my credit card details, and the bank sending them an authorisation code, have I given them the right to charge me however much they want whenever they want?!

Willing2Learn

Hi,

This from the Marriot (hopefully it answers your question):

Pre-authorisation is a common process followed within Marriott Hotels in the UK at check-in. The way it works is that a pre-authorisation request is made by the hotel’s card terminal to the card holders’ bank, your bank/credit card company authorises the funds and sends an authorisation code to the hotel. This confirms the availability of the requested funds in the card holder’s account to cover charges in the hotel (if any).

This authorisation code is expected to be used when the transaction is about to complete (that is on check-out). If the authorisation code given by your bank/credit card company is not used by the hotel, this means that your account had no incidental charges during the stay OR the hotel has secured funds through other means (Cash or another card) and has had no need to use those blocked funds OR does not wish to proceed with the transaction due to other reasons.

If on check out, a guest decides to pay using Cash or with an alternative credit/debit card (different to the one provided on arrival); the amount taken from the first credit/debit card normally takes 5-7 working days to be released back to your card by your own issuing bank or credit card company. Some issuing banks and building societies may take longer specially for cards issued outside of the United Kingdom.

https://www.marriott.co.uk/hotelwebsites/us/l/lgwcy/lgwcy_pdf/For_Marriott_Website_Pre-Authorisation_Notice.pdf

kuratowski

Thanks! I understand that part but the reference to check-in and release within 5-7 days makes me think it's not applicable to my question. I have booked a hotel today for a stay in April, I don't think they can charge using the same authorisation code in 3 months' time can they?

Willing2Learn

My understanding of 'the system' is that the pre-authorisation allows a temporary hold on funds for between 5-7 business days. After the temporary hold expires, the funds should be released. That is the answer I am getting via Google

Edit: In fact, have a look at this thread linked below:
https://forums.moneysavingexpert.com/discussion/5687799/hotel-pre-authorisation-holds

kuratowski

Thanks again, yes the answer to my question was in that thread!

Migster

When a transaction is authorised the funds are ring-fenced for a short period of time, which is typically around a week. This gives the merchant time to put the transaction through for settlement and be sure they will be paid. In the example of a hotel when the time period may be considerably longer than a week, the merchant can still charge the card, but they no longer have the guarantee that the funds will be available to settle the transaction.

If you have given your card details to reserve a room, knowing you will be billed if you are a no show, you might find it difficult to argue that the transaction was unauthorised, so as long as funds are available your account would be debited.

Or at least that's how I think it works..

Terry_Towelling

No you haven't given them a continuous payment authority. The conditions under which a hotel may charge your credit card when it has been used to guarantee a reservation are governed by strict card-scheme rule sets.

Now, those rule sets cannot infringe any contractual obligations you enter into with a hotel at the reservation stage but if the hotel feels it has the legal right to anything over and above what is permitted by the rule sets, they cannot just charge it to your card account without your express permission. If they do, your card issuer can pursue what is known as a Compliance case against the hotels processing bank.

I haven't attempted to describe the rule sets here because they may have changed in the 15 years since I left cards but any guaranteed reservation that is not properly cancelled and where you fail to turn up only allows the hotel to bill you for 1 night's accommodation as a No Show charge. If they feel you owe any more than that, they cannot just bill it to your card but must pursue you by alternative means for payment.

On the subject of cancellations, hotels must accept them (usually up to 6pm on the arrival date) and they must provide a cancellation number. If you do cancel, always insist on a cancellation number; that could be crucial if you still get charged a No Show and will enable your issuer to raise a Chargeback (unless the rules have changed).

There is a lot more to it than this but I no longer have access to the rules to let you know. Perhaps the current Chargeback practitioners on the forum could enlighten us...

born_again

If you do not turn up, then there is a minimum of one night no show.

Also just a heads up. Visa regs now mean that Hotel auths can sit for up to 31 days. Most do not, but any problems such as not using the same card at booking/check-in/check-out can see this happening.

If I get a query on these. I always ask did you have a rock & roll moment....

kuratowski

Thanks all for the responses - this is much clearer now :T. Been doing it for years but never properly appreciated how it all works!

Terry_Towelling

born_again wrote: »

If you do not turn up, then there is a minimum of one night no show.

Is this 'minimum' or 'maximum'?

born_again

Terry_Towelling wrote: »

Is this 'minimum' or 'maximum'?

Max.... Doh. Bad day:rotfl::rotfl: