Pre-authorizing a guest credit card before check-in (PMS)
Pre-authorizing a credit card in advance with the goal of expediting the check-in process and minimizing delays is not recommended. Such pre-authorization should only be undertaken when the intention is to secure a deposit.
Pre-authorization is conducted using the credit card number provided during the reservation, not the physical card. This increases the potential for fraudulent transactions and elevates the risk of chargebacks.
It's important to note that a pre-authorization is not an actual charge but a temporary hold on the funds. The final amount is charged upon check-out or once the payment is posted on the folio, and the pre-authorization is released, though the timing of the release can vary depending on the bank or credit card issuer.
If a pre-authorization is executed before check-in and the physical credit card is utilized during check-in, Visual Matrix will perform a second authorization, this time using the physical card. Although it involves the same credit card number, the distinction between the first authorization done without the card and the second one with the physical card is recognized by the PMS as different payment methods and will result on a double authorization on the guest card.
If a pre-authorization is conducted too early, spanning several days or weeks before check-in, there is a likelihood that the bank may drop the authorization in the interim. However, this information may not be communicated to the Property Management System (PMS). As a result, the PMS might erroneously believe that the hotel still holds a valid authorization, leading to potential discrepancies in the system's understanding of the authorization status.
Hotels pre-authorize a guest's credit card at check-in time for several reasons:
- Guarantee of Payment: Pre-authorizing a credit card ensures that the guest has a valid and functioning card, providing a guarantee to the hotel that they can cover the cost of the stay.
- Incidentals and Additional Charges: Hotels often pre-authorize a certain amount to cover potential additional charges or incidentals, such as room service, minibar usage, or damage to hotel property. This helps protect the hotel in case the guest incurs extra charges during their stay.
- Security Deposit: Some hotels require a pre-authorization as a security deposit to cover any potential damages to the room or its contents. This is a common practice, especially for guests who do not provide a physical cash deposit.
- Policy Compliance: It allows the hotel to ensure that the guest's credit card complies with the hotel's policies, such as expiration dates, credit limit, and any other relevant terms.