The Smart Way to Deal with Refund/Credit Requests

[Magic3]

If you are like me, you believed the Strict Cancellation policy protected your income and now you are faced with numerous cancellations and requests for refunds that you never thought you’d have to deal with. I’m now formulating a strategy and thought I’d share it with the community. I look forward to reading other recommendations. The goal of this post is to share smart policies that will help us all "do the right thing", the meaning of which is unique to each of us. 

CREDIT/REFUND PHILOSOPHIES

1. All decisions regarding EXTRA refunds will be made April 30th 2020 or sooner.
2. Guests who are not contractually entitled to a refund do not “deserve” that you give one. These guests are asking hosts to do them a financial favor.
3. Issuing credits or refunds out of the kindness of your heart is wonderful if you can afford to do that, and hosts who protect their business by not offering refunds and credits are not necessarily “Greedy” as a result.
4. Any credit/refund policy should apply equally to all guests, so take time to get it right.
5. Hosts have suffered enough financial damage; we don’t have to take on more.
6. Guests who get rude or indignant about your efforts may automatically disqualify for anything extra.

CREDIT/REFUND DOLLAR VALUE:

1. 50%-100% travel credit
2. 25-50% Cash Refund

MINIMUM REFUNDS:

1. People who qualified for 50% refund: That’s your total refund. No more.
2. People who qualified for 0% refund: Return extra fees like cleaning, extra people, etc.

TRAVEL CREDITS:

1. Must be used within one year from original travel date
2. Excludes blackout dates (special events, holidays, peak seasons)

CASH REFUNDS:

1. Guest may choose from a travel credit or a refund
2. Calculate refund based on the cash payout you received, not the total booking amount

THINGS TO CONSIDER:

1. If a guest is rude and hostile to you during this process, then you probably don’t want them using a credit to stay in your home at some future date. Your policy should be that you “don’t feel comfortable hosting this guest ”. Offer the minimum 25% cash back only (if anything).
2. If a guest is making payments, fails to make one or more of them, and then cancels, then the “non-payment” is their refund. They would have been 100% non-refundable, but they got around this by not paying the full booking amount.

I’ve got to run. Looking forward to refining my strategy based upon helpful feedback from the community.