How Do Automated Payment Security Deposit Holds Work?

Requirements

• Security deposit enabled: Your listing must have a security deposit amount set in your listing's pricing settings.

• Payment provider connected: You need Stripe (recommended), Square, or PayPal connected to your Houfy account. Stripe is best for security deposits because it supports authorization holds natively.

• No separate guest consent is needed. The guest agreed to the deposit when they booked, so Houfy collects it under your deposit policy whether or not the guest ticked the auto-charge agreement and whether or not automated payments are switched on.

What Is a Security Deposit Hold?

A security deposit hold is a temporary authorization on the guest’s credit card. Think of it like a hotel placing a hold when you check in — the money isn’t actually charged, but it’s reserved. The guest sees a “pending” charge on their statement, but the funds aren’t transferred to you.

This protects you as a host: if the guest damages your property, you can capture part or all of the held amount. If everything is fine, you release the hold and the guest is never charged.

✓ Security deposit holds are different from actual charges. A hold temporarily reserves funds on the guest’s card but doesn’t transfer money. A charge actually moves money from the guest to you.

The Security Deposit Lifecycle

Houfy manages your security deposit through five automated phases:

Phase 1: Scheduled

When: When the booking is confirmed.

Houfy creates a scheduled hold based on your collection timing setting. No emails are sent at this stage — it’s internal scheduling only.

Phase 2: Pre-Hold Alerts

When: 3 days and 1 day before the hold date.

Alerts go out to both you and the guest that a hold is coming. The guest sees the deposit amount and the date the hold will be placed.

Phase 3: Hold Placed

When: On the scheduled hold date.

Houfy places an authorization hold on the guest’s saved card. No money moves. Both you and the guest receive a confirmation (or failure notification if the hold couldn’t be placed).

Phase 4: Hold Maintenance

When: only if a hold is still active and about to expire before checkout.

Holds expire after 7 days. Houfy voids the old hold and places a new one, and the guest is notified. Because Houfy only creates a hold when the whole window already fits inside 7 days, this is rare - a long stay is charged rather than held, so there is nothing to renew.

Phase 5: Post-Checkout

When: After the guest checks out.

You decide: release the hold (no damage) or capture it (damage found). Both you and the guest receive a confirmation of the outcome.

When Is the Hold Placed?

You control when the security deposit hold is placed by setting the collection timing in your listing’s pricing settings. Your options:

• At Booking: The deposit is included in the initial payment. No separate hold is needed later.

• 7 days before check-in: A hold is placed on the guest’s card 7 days before they arrive.

• 3 days before check-in: A hold is placed 3 days before arrival.

• 1 day before check-in: A hold is placed the day before the guest arrives.

• On check-in day: The hold is placed on the day the guest checks in.

Whether you get a hold or a charge is not up to the timing you pick. Houfy places a temporary authorisation hold only if the whole window - from the day it is placed, through the stay, plus about 2 days after checkout to release it - fits inside 7 days. That is essentially short stays booked close in. For anything longer, Houfy charges the deposit on the CHECK-IN DATE and refunds it automatically after checkout if you claim no damage. Note also that the dropdown offers "2 days before check-in"; the scheduler does not yet handle that value and treats it as 7 days before check-in, so choose 1, 3 or 7 days until it is fixed.

How Holds Work Behind the Scenes

The hold is not a charge

When Houfy places a security deposit hold, it creates an authorization on the guest’s card. The guest sees a “pending” amount on their credit card statement, but the money stays in their account. No money is transferred to you at this point.

Holds expire automatically

Holds expire after 7 days on every processor - Stripe, Square and PayPal alike. You have until the hold expires to capture it, and Houfy emails you the day before it auto-releases.

Houfy renews holds automatically

If the guest’s stay is longer than the hold window (for example, a 14-day stay with Stripe’s 7-day hold limit), Houfy automatically renews the hold before it expires. It voids the old hold and creates a new one. The guest receives an email notification when this happens.

⚠ Hold renewals may cause the guest to see a brief gap between the old pending charge disappearing and the new one appearing. This is normal and the deposit remains protected.

After Checkout: Release or Capture

After the guest checks out, you have a window to inspect your property and decide what to do with the security deposit hold. Houfy sends you a reminder email before the hold auto-releases.

Option 1: Release the hold (no damage)

If everything looks good, release the hold. The “pending” charge disappears from the guest’s card statement and no money changes hands. Both you and the guest receive a confirmation email.

Option 2: Capture the full amount (damage found)

If you find damage that costs as much as (or more than) the deposit amount, you can capture the full security deposit. The held amount is then transferred from the guest’s card to you. You’ll need to provide a reason for the capture. Both parties receive an email with the amount captured and the reason.

Option 3: Partial capture

If the damage costs less than the full deposit, you can capture just the amount you need. For example, if the deposit is $500 and the damage costs $150, you capture $150 and the remaining $350 hold is released. The guest is only charged $150.

⚠ If you don’t take action before the hold expires, it will be automatically released. Make sure to inspect your property promptly after checkout.

Understanding Deposit Statuses

Your security deposit moves through these statuses during its lifecycle:

• Pending: The deposit is scheduled but hasn't been placed yet. Waiting for the scheduled date.

• Processing: Houfy is currently placing the hold or taking the charge with the payment provider.

• Held: The hold is active on the guest's card. Funds are reserved but not charged.

• Charged: The deposit was taken as a charge rather than a hold, and will be auto-refunded after checkout if no damage is claimed.

• Released: The hold was released — no damage claimed. The guest was never charged.

• Captured: You claimed the deposit (full or partial). Money was transferred from the guest to you.

• Failed: The hold or charge couldn't be completed (e.g., card declined). Houfy does not retry it.

• Canceled: The hold was canceled by you or the system (e.g., reservation was canceled).

Frequently Asked Questions

Does the guest actually get charged for the security deposit?

Not unless you capture it. A hold reserves the funds on their card (they see a “pending” amount), but the money isn’t transferred to you unless you choose to capture it after finding damage.

What if the guest’s card doesn’t have enough funds for the hold?

Houfy does not retry. The scheduled deposit is marked failed and you and the guest are emailed; you will need to ask the guest to sort the card out and arrange the deposit another way.

How long do I have to capture the deposit after checkout?

You have until the hold expires - 7 days from when the hold was last placed or renewed, on every processor. Houfy emails you the day before it auto-releases.

Can I set different deposit amounts for different listings?

Yes. Each listing has its own security deposit amount and collection timing. You configure these in each listing’s pricing settings.

What happens if the guest cancels their reservation?

If the reservation is canceled before the hold is placed, the scheduled hold is automatically canceled too. If a hold is already active, it’s released (voided) when the reservation is canceled.

Can I use security deposits with the Full Payment policy?

Yes. Security deposits work independently from your payment policy. Whether you use Full Payment or Deposit + Balance, you can still enable a security deposit hold.

Important Notes

• Stripe is recommended for security deposits. Stripe has the best support for authorization holds, including automatic renewals and partial captures. Square and PayPal also work but may have different hold durations.

• Holds are not charges. Make sure your guests understand this. A hold reserves funds but doesn’t transfer money. The pending amount on their statement will disappear when the hold is released.

• Inspect promptly after checkout. Don’t wait too long to inspect your property. If the hold expires before you capture it, you’ll lose the ability to claim the deposit through the automated system.

• Guest communication is automatic. Houfy handles all email notifications for security deposits — alerts before the hold, confirmations when it’s placed, and notifications when it’s released or captured. You don’t need to send any emails yourself.

Related Help Posts

• How Do Automated Payments Work on Houfy? — A high-level overview of the entire automated payment system.

• How to Set Up Auto-Payment for Balance Due & Split Payments — Configuring the Deposit + Balance payment policy.

• Understanding Payment Alerts & Reminders on Houfy — Every email alert Houfy sends, including security deposit notifications.