Credit Card Processing Rules for Advance Resort Deposits

Hotels, motels and similar businesses need to comply with the following credit card processing rules if they take part in the Advance Resort Deposit service for payment cards:

1. When a customer contacts a hotel or travel agent and wishes to make an advance deposit with her credit card, the hotel must plainly explain the terms of the reservation, as well as the cancellation and refund policies to the cardholder.
2. The hotel then needs to take the customer's card number, expiration date, name and address and verify the room rate and location.
3. The hotel is required to also confirm the status of the card. Here is how to do that:
• If the hotel is located within the U.S., the card acceptor is required to follow the regular authorization procedures for obtaining approval for the credit card transaction. If approval is not obtained, the card acceptor accepts liability for the transaction.
• For all regions outside of the U.S. the hotel must check the Warning Notice. (This may be done following the phone call.) If the card number is listed in the Warning Notice, the hotel needs to follow the regular procedures provided by the processor.

The hotel is mandated to obtain an authorization approval if the amount of the advance deposit is above $50. If the result of the authorization call is a rejection, the card acceptor must inform the cardholder.

4. The hotel needs to complete a sales ticket that includes the cardholder's name, the account number, expiration date, booking confirmation number, and to write the words "advance deposit" in the place of the cardholder's signature. It is strongly advised that the merchant notates on the sales ticket any applicable special terms and conditions about its refund policy.
5. The hotel needs to mail to the cardholder a letter of confirmation, a copy of the sales ticket that provides the booking confirmation number, and any information about its cancellation and refund policies at the address provided by the cardholder.
6. The hotel needs to then deposit the transaction for the advance deposit in the regular manner. There are no special deposit rules the merchant needs to comply with.
7. If a customer cancels her booking in accordance with the terms of the sale, the hotel is mandated to cancel the reservation and issue a refund to the cardholder. The following process needs to be followed:

1. The card acceptor needs to prepare a credit slip in the regular manner for the amount of the previously-submitted advance deposit and write the words "deposit cancellation" in place of the cardholder's signature on it.
2. The card acceptor needs to prepare a notice of cancellation and issue a cancellation number to the customer.
3. The card acceptor needs to mail a copy of the credit slip and notice of cancellation to the customer.
4. The card acceptor needs to record the cancellation number on the slip and deposit the credit slip in the usual manner. There are no special deposit rules imposed on the hotel.
7. If the sale results in a dispute and if the card number used to make the deposit cannot be unidentified as to a specific issuer or was false, the bearer of the liability will be the credit card processing bank.