Your Vacation Rental Cash
Increase your vacation home bookings by accepting forms of payments that aren’t cash. Below is a list of some popular options.
1. Personal Check
As long as you have enough time before check-in, this is usually your #1 option. Since the renter has to send you the rental agreement anyway, have them drop a check in the same envelope. Just make sure not to refund any money in the case of cancellation until the check has cleared and been in your account for 4 weeks (see the scam in the next section for why).
2. Cashier’s Check & Money Order
These instruments are as close to cash as there can be. Accept these with open arms. However, make sure they clear before issuing refunds of any type. Beware the popular 419 Internet scam involving fake cashiers checks and fake personal checks!
3. Western Union
This might be fine. I’ve actually never had someone pay me this way. The fees are pretty crazy. I’d prefer a renter to overnight a money order before going this route, I think.
4. PayPal
I accept PayPal as an easy way to accept credit cards (Visa, Mastercard, Amex, Discover). Paypal is owned by eBay and is an relatively secure way for renters to pay you immediately with a credit card. The card is charged by Paypal and then Paypal gives you the money, minus any fees (you do not get access to the renter’s credit card information). There are no monthly fees with this option. The fee works out to about 3% of the transaction.
When I reach agreement with a renter, I offer this payment option as a convenience. If a renter opts to pay this way, I require on a 3% “convenience fee” (which basically goes to pay the Paypal fee). If a renter is booking last minute, I require them to pay via PayPal and waive the fee.
5. Google Checkout
I checked into this alluring option. Alas, Google does not allow vacation rentals to be charged through their service. Oh well!
6. Credit Card Merchant Account (through PayPal)
An often unnoticed feature from Paypal is their virtual terminal service. This is different from the normal PayPal service. For about $30/month plus a 3.1% fee, they will give you a “virtual” swipe machine. Basically, you get the renter credit card details over the phone and enter them into the PayPal “virtual terminal” web page and submit the information online. PayPal will process the payment and provide you a confirmation number.
7. Credit Card Merchant Account (through a bank)
You can check with your bank or search online for credit card merchant providers. If you want to operate like a business by taking credit card information over the phone, you can sign up for one of these merchant accounts. You will be provided with a website that acts as your “virtual terminal” to enter credit card details. This is pretty similar to #6 above. Prepare to pay $30-$50/month plus fees.
One word of caution: chargebacks in the travel industry are some of the highest in the industry. If a renter is unhappy after their stay, they can easily call their credit card company and dispute the charge. If this happens, be prepared to fight for your money and possibly lose your rent. Credit card chargebacks do not happen if you simply cash a check.
