Vacation Rental University’s 3 Alternatives to Giving Refunds to Guests

In the vacation rental industry, we often can be quick to offer a full or partial refund to guests when an issue arises, just to stop the pain of the complaint and do whatever it takes to avoid the dreaded negative review. However, refunding guests when there is an issue creates a major profit loss for your business and the property owner — creating more pain in the long term as you damage that relationship.

Often, you can avoid giving a refund while also avoiding a poor review by offering to fix the issue with great service, a good attitude and alternative forms of compensation. Ultimately, the goal for your vacation rental business should be to provide great service, keep guests happy, and maintain high profit margins. At Vacation Rental University we have dozens of strategies to help you accomplish all 3 of these goals, even when things go wrong. Here are a few to get you started.

1. Find a Solution

The first thing you should try when there is any type of issue is to fix it — FAST! When a guest has a complaint, it sometimes feels like the best thing to do for them is to offer a refund to avoid a bad review. This, however, is often actually NOT the best option to stay in your guests’ good graces — if you give a refund to guests and don’t fix the solution you could still end up with a bad review. If they have a complaint, before even discussing a refund, the best thing to do is to try your best to fix the problem. If there is an issue with the cleanliness, or say the AC or power isn’t working, these issues are obviously unacceptable; however, instead of instantly refunding the guest, try to think of a way to make it right. Have the AC fixed immediately, or the cleaners return to the unit. Do it with a humble heart, an apology, and a sense of urgency, and you just may find that in the end the guest has forgiven you on the merit of hard work alone.

2. Offer Alternative Compensation

Of course, if there is an issue with a property, these issues will take some time to resolve. Instead of having miserable and angry guests sitting in the unit, give them something fun to do to help them redirect their attention back to enjoying their vacation. Tickets to local attractions, or vouchers for dinner work great for this. At VRU, we go into more detail on how we manage to provide guests dining and entertainment vouchers for little or no cost to our company.

3. Credit for a Future Stay

If the issue is something that cannot be quickly fixed, and a voucher or freebee will not make it right, offer the guest credit for a future stay, or perhaps a free additional night added to this stay if the property was going to be vacant anyway. This is a great alternative to a full refund because to the guest it feels like real money, but for you and your property owner the money you have already collected stays in the bank. Often these credits and discounts go unused. Of course, you should budget as if they will be used, but if they aren’t, then you haven’t lost anything, and you have earned a happy customer.

Learn More

Creative alternatives to giving refunds to guests should always be option number one when dealing with complaints or unforeseen problems with a stay, but there will be situations that cannot be fixed with anything other than a full or partial refund. At VRU, we have put together lessons and tools to help you know exactly when a refund is required, how much to give and how to explain it, and how to avoid giving refunds as often as possible. Join us today and let us help you improve, grow your business, and succeed in the vacation rental industry.