How to refund a guest’s security deposit

Damage deposits move through your own connected Stripe, Square or PayPal account. You are the merchant of record — the money never sits in a Houfy balance — and you decide what to return. You can issue the refund from inside Houfy or directly in your processor; either way it leaves your account.

Summary

You can return a guest's security (damage) deposit from inside Houfy, or directly in your payment processor (Stripe, Square or PayPal). You may refund the full amount or part of it. Either route sends the refund out through your own connected account.

Who this is for

Hosts who collected a security (damage) deposit and need to return some or all of it.

Before you start (optional)

• Make sure you can sign in to Houfy.

• If you use Stripe, Square or PayPal, have your login ready.

• Decide how much you will refund.

Steps

1. Log in to your Houfy host account.

2. Open Menu and select Messages.

3. Find the guest's conversation for the reservation you want to refund.

4. Click Reservation Details.

5. Go to the Payments section and find the card headed Refundable damage deposit.

6. Click Refund Damage Deposit.

7. Enter the refund amount (full or partial).

8. Click Confirm Refund.

If the deposit was taken as a hold - an authorisation on the guest's card rather than a charge - there is no Refund button. The hold is released automatically after checkout. Your controls on a hold are Capture for Damage, Stop Auto-Refund and Cancel Deposit.

Frequently Asked Questions

Can I refund a partial amount?
Yes, but only once. Enter any amount up to the deposit you received. Houfy allows one deposit refund per reservation - once it is processed the Refund Damage Deposit button disappears and a second refund is refused. Decide the final amount you are keeping before you confirm.

Are there refund fees?
Stripe, Square and PayPal do not charge an extra fee to issue a refund, but the original processing fees are not returned to you. Please verify this directly with your processor.

Should I refund in Houfy or in Stripe/Square?
Either is fine. Both send the refund through your processor, and a refund you issue in the processor dashboard is picked up by Houfy automatically.

What if I collected the deposit by cash or bank transfer?
Return the money the same way you collected it, and keep a receipt for your records.

What if I need to keep part of the deposit for damages?
Enter a partial refund - remember you only get one. Share a short note with the guest explaining what you kept and why.

How long do refunds take?
Banks usually show the refund within 5-10 business days.

Can I refund more than the deposit?
No. You can only refund up to the amount you received; anything above it is rejected.

Last updated: 23 August 2026