Ensuring smooth hotel bookings is crucial for companies with employees who frequently travel for business. If a traveler’s credit card authorization declines when they reach a hotel, it can lead to delays, inconveniences, and unexpected costs.
Despite receiving confirmation emails that the card is on file, sometimes, the business traveler arrives at the hotel only to be told there’s no record of the card. Consequently, the traveler must use their personal card to check-in. The traveler’s card gets charged at the end of the stay. This prompts a laborious reimbursement process and impacts the business traveler’s experience.
Moreover, hotels face substantial financial losses due to chargebacks, averaging $5,020 annually. As a result, they insist on customers choosing CC authorization.
Experiencing a credit card authorization failure can be frustrating for travelers. Understanding the common causes and how to prevent CC authorization rejections can save time and money. It also ensures a hassle-free travel experience for your employees.
Here are five common causes of credit card authorization failure in hotel bookings and how business owners can address them effectively.
Top Causes of Credit Card Authorization Failures In Hotel Booking
1. Hotel Operational Issues
A common reason when credit card authorization declined is when the front desk staff is not informed about or cannot locate the credit card authorization form sent before a guest’s arrival. In such scenarios, hotels often ask travelers to pay through their personal credit card. Such lapses in communication and documentation can disrupt the traveler’s experience
How to Fix It?
- Present Copies of the Form
Show the physical or digital copy of the credit card authorization form to the front desk staff.
- Provide Confirmation Emails
Show the email confirmation from the hotel’s staff indicating that the authorization form was received and processed.
- Contact the Person in Charge
Ask the front desk to contact the person or department that confirmed the authorization, providing the name and contact information if necessary.
- Contact Your TMC
If using a TMC, contact them immediately to resolve the issue on your behalf.
- Contact Hotel Management
Request to speak with the hotel manager or supervisor to address the issue if the front desk staff cannot resolve it.
- Payment and Reimbursement
If all else fails, you may need to pay yourself and seek reimbursement from your company later. Ensure you get a detailed receipt for the transaction.
2. Hotel Charging Issues
Another reason why credit card authorization declines is when the hotel charges incidentals on the same card used for the room rate. This practice can lead to the card running out of balance, preventing the room charge from being processed.
Hotels often place a hold on a guest’s credit card for potential incidental expenses, such as room service, mini-bar usage, or other amenities. These incidental charges can quickly consume the available credit limit if they accumulate.
How to Fix It?
- Separate Cards for Incidentals and Room Charges
Use one credit card for incidentals and a different one for the room rate to ensure sufficient balance.
- Increase Credit Limit
Contact your credit card company to request a temporary increase in your credit limit before your stay.
- Set a Cap on Incidentals
Ask the hotel if they can cap incidental charges or notify you once they reach a certain amount.
Suggested Read:
Understanding Credit Card Authorization Process
3. Human Error in Data Entry
Human error during data entry is a common reason for credit card authorization failure. Mistakes such as incorrect credit card numbers, expiration dates, or CVV codes can lead to failed transactions.
How to Fix It?
- Training Employees
Educate your employees on the importance of accurate credit card information. Provide guidelines on entering card details and double-checking them before submitting correctly.
- Verification Process
Implement a verification process where employees must review and confirm the credit card details entered into the booking system.
4. Security Issues and Chargebacks
Another reason for credit card authorization failure occurs when the credit card company blocks a transaction due to security issues with a hotel that has a low reputation or a history of chargebacks.
Credit card companies monitor transactions closely to protect their customers from fraud and financial loss. If a hotel has a history of chargebacks, disputes, or other questionable activities, it may be flagged as a high-risk merchant. As a precautionary measure, the credit card company might block transactions to or from such hotels to safeguard the cardholder’s funds.
How to Fix It?
- Notify Your Credit Card Company
Inform your credit card company of your travel plans and provide them with details about the hotel to prevent the transaction from being flagged.
- Book Trusted Hotels
Whenever possible, book accommodations at well-known and reputable hotels to reduce the likelihood of your transaction being blocked.
- Carry an Alternative Payment Method
Bring a secondary credit card or another form of payment in case your primary card is blocked.
5. Expired or Invalid Credit Cards
Employees may sometimes provide credit cards that are expired or invalid, leading to credit card authorization failure. This can happen if the cardholder is unaware of the expiration date or if the card has insufficient funds. Many travelers encounter problems when their credit card authorization declines due to insufficient funds.
How to Fix It?
- Regular Card Checks
Encourage employees to regularly check their credit card expiration dates and ensure they have valid cards before booking travel.
- Pre-Trip Confirmation
Verify the credit card details with the hotel before the trip to ensure the card on file is valid and has sufficient funds.
- Alternative Payment Options
Consider providing employees with corporate credit cards or virtual payment cards for business travel, ensuring the cards are valid and funds are available.
Suggested Read:
6 Credit Card Authorization Form Templates
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