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Security Deposit and Damage Waiver in Short-Term Rentals

Updated over 2 months ago

What are damage waivers and safety deposits, and how do they work?
A damage waiver is a mandatory fee collected from the guest, allowing you to set aside funds for any potential damage. Think of it as rainy-day money—for example, making an extra $40 per reservation that you can use to fix a broken couch or table.

A safety deposit, on the other hand, is a payment or hold placed on the guest’s card. You can either charge the card or just place a hold, which can be used in the event of specific damage caused by that guest.

How do guests typically respond to these fees?
Safety deposits are widely accepted by guests—they’re familiar with this approach from hotels. Damage waivers, however, can be more challenging to present, since they are an additional fee that may not have been clearly shown in the booking experience.

How does Enso Connect help solve this issue?
At Enso Connect, we’ve introduced an option called “damage waiver or safety deposit,” which lets you offer both options to the guest—a one-time fee or a card hold. You can:

  • Go to your fees section in the Guest Journey Editor

  • Select the damage waiver or safety deposit option

  • Choose whether it applies to a specific property, group, or all properties

  • Add conditions to control where it shows up (e.g., specific channels only)

  • Write a custom description explaining the fee or deposit

Why does offering both improve the guest experience and your revenue?
Roughly 60% of guests choose the damage waiver, which becomes a new revenue stream for your business. This approach also avoids frustration at check-in, where guests might otherwise be surprised by a sudden fee. By offering optionality, you give guests a smoother experience—it’s up to them to choose either a refundable safety deposit or a one-time fee for protection.

What’s the recommended pricing strategy for damage waivers?
We recommend setting the damage waiver at 20–25% of your safety deposit amount. This helps you maximize returns while still making it an appealing alternative for guests.

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