Deposit vs hold on a card

The core difference

Both protect a business from a customer who books and never turns up, but they work at different layers of the card system. A deposit is an ordinary charge for part of the price. The money leaves the customer's account and arrives in the business's account like any sale, and the booking terms decide whether it is refundable. A hold, called an authorisation or pre authorisation, asks the card issuer to set aside an amount without charging it. The customer sees it as pending and their available balance drops, but nothing has been paid. The business then either captures some or all of it, turning it into a charge, or releases it. The catch is time. Card networks only let a hold sit for a limited period, commonly about seven days for online card payments, after which it lapses on its own and there is nothing left to capture.

How each one works on a card

With a deposit, checkout charges, say, $150 of a $500 booking. Later the customer pays the $350 balance, online or in person, as a second charge. If they cancel, the business refunds the deposit in full or in part according to its terms, and the refund takes several business days to appear. With a hold, checkout authorises an amount, perhaps the full $500 or a $200 bond, and the payment provider keeps the authorisation open. After the service the business captures the real amount, which may be less than the hold, and the rest is released. If nothing is owed, the business cancels the authorisation. Some providers offer extended authorisations for specific industries such as hotels and car hire, but they are not available on every card, so a booking system cannot assume them. Either way, disputes can follow: a customer can dispute a captured charge just as they can dispute a deposit.

When to use which

Take a deposit when the booking is more than a few days away, when the business commits costs on the strength of it, such as ordering stock or turning away other customers, or when a cancellation fee is part of the terms. Glamping sites, venue hire, event catering, wedding services and custom orders all fit. Use a hold when the final amount is unknown until the service is done and the service is soon, such as a bond on equipment hired for the weekend, a car hire, or a bar tab. Some businesses combine them: a deposit when booking, then a hold at check in for incidentals. Whatever you choose, write the terms in plain words beside the pay button: how much is taken now, when the balance is due, and what is refunded if the customer cancels at each point. Australian consumer law protects customers from unfair terms, so keep cancellation fees reasonable.

Common mistakes

Placing a hold for a booking three weeks away and discovering on the day that it expired. Calling a deposit "non refundable" when the business cancels, which consumer law does not allow. Holding the full price on a debit card, which locks up a customer's actual money for days and causes complaints. Taking a deposit without recording which booking it belongs to, so the balance is calculated by hand. Charging the balance from a card saved months ago without clear consent. Refunding a deposit by bank transfer when it was paid by card, which can confuse a later dispute. Letting the deposit amount be set by the browser rather than worked out on the server from the booking's price. And forgetting to remind customers of the balance before it is due, which turns a simple payment into an awkward call on arrival day.

Where it shows up in OneCraft

Card holds are not offered in OneCraft; payments are Stripe Checkout charges. Deposits are: when a site is generated with bookings, rentals, events or pre-orders that need one, the AI follows its deposits guide. A deposit and its balance are two separate orders, the deposit worked out in the database as a percentage or a fixed amount with a balance due date, and never set by the browser. Before paying, customers see a line such as Pay $50 deposit now, $150 due by 3 May, and their account shows Deposit paid, Balance due with a Pay balance button, or Paid in full; staff can mark a balance paid in person. Charges go to the owner's connected Stripe account with a platform fee of 2, 1 or 0.5 percent by plan, and refunds are made in the owner's Stripe dashboard. The free plan cannot take payments, and the site cannot email balance reminders to customers.

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