Why authorization holds are invaluable for any rental business
BLOG / Feature | 3 min read
Jeffrey van der Veer
Marketer & Customer Success

Why authorization holds are invaluable for any rental business

If you’re running a rental business, chances are you’re already putting security deposits to good use. They’re an excellent way of increasing the chances of getting your products back undamaged or at least cover the expenses of repairs and replacement.

Illustration of a laptop authorizing a hold on a credit card

It’s likely that you’re using credit card payments to charge for those security deposits. And why not? It’s very convenient, right? But there’s one drawback if we try to look at them from a customers’ perspective:

Imagine paying a $200 security deposit and returning your rental in flawless condition. Depending on your bank, it can take quite some time until you get your money back.

Sure, security deposits give businesses some form of certainty and security, but they’re always prone to make your customers feel a little hesitant.

To prevent that from happening, let’s take a closer look at the benefits of authorization holds. Why are they best practice? And how do you use them for your rental business?

What is an authorization hold?

Authorization holds, also known as pre-authorizations, temporarily block available funds on a credit card, meaning you don’t take anything from the cardholder’s account until you decide to capture the authorization.

Once a credit card is authorized, you know there are enough funds available, and the cardholder can’t go and spend this money elsewhere.

This opens the gates for some new payment flows. Most notably, capturing the security deposit only when products are returned in poor condition, or charging just the order amount when items return in perfect shape. Another great benefit for you as a business owner is that you won’t have to pay the extra credit card fees for refunding the security deposit.

How to use pre-authorizations in Booqable

To start authorizing credit card holds in Booqable, make sure you’re connected to Stripe. Completing a payment transaction involves two steps: authorizing the card and capturing the authorization.

When you register a new payment, start by authorizing both the total amount of the order and the security deposit. Those will be the blocked funds on the cardholder’s card.

When you get your items back, you have three choices:

  • Capture the order amount only and let the deposit fall off.

  • Capture the order amount and partially capture the security deposit.

  • Capture both the order amount and the security deposit in full.

It’s surprising how many rental companies don’t realize and take advantage of pre-authorizations. If you rent out high-end products, you probably want to work with authorization holds for most of your credit card transactions. Not only do they save you time and money compared to refunding, they’ll also result in happier customers. 🎉


Also check out our Help Center article for more information on authorizing and capturing credit card holds.

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