3 Ways To Calculate Equipment Rental Security Deposits

Why charge a security deposit?

A damage deposit is your rental business’s best friend. When customers know they have money on the line, they’re much more likely to take excellent care of your equipment and return it in the same condition they received it.

Security deposits protect rental businesses against damages, loss, or theft of your valuable equipment. Without them, you’d be facing a mountain of risk that could seriously hurt your bottom line. With security deposits in place, you can breathe easy knowing your investments are protected.

The difference between downpayments and security deposits

When you’re using Booqable equipment rental software, you’ll need to understand the difference between taking a downpayment and asking for a security deposit:

Down payment: This is money your customer won’t get back - it’s a partial payment that goes toward their final bill. The great thing is, you can easily set this up in your Booqable settings to pick what percentage amount you wish to collect upfront.

Security deposit: This is the money you’ll return to customers when they bring back your equipment in good shape. The good news is, Booqable lets you charge this upfront through your online checkout if you wish! That way, you can secure your rentals from the very start.

Protect your assets without deterring customers

Finding the perfect deposit balance requires careful consideration. If you set the amount too high, you might discourage potential customers who are reluctant to commit that much cash upfront. If you set it too low, your valuable equipment will not be adequately protected.

The ideal approach is to discover a balance that shields your gear while keeping the rental process smooth and enjoyable for your customers. With the right strategy, you can create security without adding any friction to the customer experience, which benefits everyone involved.

Finding the right security deposit for your industry

Different rental businesses handle deposits in their own ways.

• Event rental companies usually charge a percentage of the total order as a refundable damage deposit.

• Camera and AV rental shops often set different damage deposit amounts for each item based on its value.

• Bike rentals and other recreational gear often use simple flat-rate deposits no matter how many items you rent.

Before deciding what works for you, check out what your local competitors are doing. Your customers probably already have expectations about deposits based on other rental experiences in your industry. Your equipment rental software can help you implement whatever approach makes the most sense.

The three ways to calculate security deposits with Booqable

When you are ready to set up your security deposits in Booqable, you will find it is extremely straightforward. Simply navigate to your Booqable settings, and you will find everything you need to select your preferred method.

1. Charge a fixed amount

This approach works best if your inventory items are mostly similar in value, or if you prefer to keep things simple and straightforward for everyone involved.

Example: A bike rental shop might charge a flat $50 security deposit per order. Whether someone rents one bike or a family takes five, the deposit remains at $50. Customers appreciate this because it is easy to understand, and your staff will benefit from not having to explain complex deposit calculations.

The beauty of this approach is its wonderful consistency and predictability, creating a streamlined experience for both your customers and your team.

2. Charge a percentage of order amount

This is perfect for businesses where orders vary in size, and the rental fees generally match the value or quantity of items being rented. It’s like having a self-adjusting deposit system.

Example: An event rental company might charge a 20% security deposit. So a $500 wedding package would need a $100 refundable deposit, while a $2,000 corporate event package would require $400. The fantastic thing is that deposits naturally scale with the size and value of the order without you having to do any extra work.

The benefit of this type of deposit calculation is that it automatically adjusts the deposits based on order size, which usually means bigger (riskier) orders get appropriately bigger deposits.

3. Charge a percentage of product security deposit value

This is ideal if you rent out a wonderful mix of high-value and low-value items and want deposits that perfectly reflect each item’s worth. It’s the most customizable option.

Example: A camera rental shop might set a security deposit value of $1,000 for expensive cameras, $500 for lenses, and $200 for tripods. Using this method means you can charge a percentage of this value to be charged when each product is ordered, to be refunded once the items are returned damage-free.

Refunding security deposits and managing exceptions

Processing security deposit refunds in Booqable is remarkably simple. When a customer returns their equipment in good condition, you can quickly process their refund right from the Orders screen. Simply open the relevant order, verify that all items have been properly returned, and refund the security deposit. The system will automatically process the refund through your connected payment processor, saving you valuable administrative time.

Booqable also offers you the flexibility to handle special relationships with your trusted customers. As your rental business grows, you’ll likely develop ongoing relationships with reliable clients who consistently take good care of your equipment. For these valued customers, Booqable allows you to create customized exceptions to your standard security deposit policies. You can exempt specific customers from security deposit requirements entirely, or apply a reduced percentage based on their reliability and rental history.

This exception feature is particularly valuable for long-term business clients who rent from you regularly, production companies with established track records, corporate accounts with formal rental agreements, and VIP customers with proven reliability.

By creating these exceptions, you can strengthen relationships with your best customers while still maintaining protection for your equipment with new or unknown renters. Many rental businesses find that offering security deposit exceptions to trusted clients becomes a powerful loyalty incentive that encourages repeat business.

Ensure happy customers and well-protected equipment

Booqable equipment rental software makes handling damage deposits incredibly easy and flexible, and it’s one of the many reasons rental businesses love it! Be upfront and friendly with your customers about your rental security deposit policies. Nobody likes surprise fees, but everyone appreciates honesty and clarity.

Whether you choose a simple flat fee, a smart percentage of the order, or customized deposits for each product, the key is making sure your customers know exactly what to expect. When they understand your policies upfront (both online and in person), they’ll trust you more and be much happier with their rental experience.

With Booqable’s flexible security deposit options, you’ve got everything you need to make happy customers and well-protected equipment the recipe for your rental business’s success.