Bond Holds Explained
Bond holds (also called payment authorizations or security deposits) are a way to reserve funds on a customer's card without actually charging them. This is essential for rental businesses to protect against damage, late returns, and other issues.
What Is a Bond Hold?
A bond hold is a temporary authorization that:
- Reserves funds on the customer's card
- Appears as a "pending" transaction on their statement
- Doesn't actually charge the customer unless you capture it
- Expires automatically after a set period (usually 7-10 days)
How Parked Funds Handles Bond Holds
Creating a Hold
When you create a booking in Parked Funds, we:
- Create a payment authorization on the customer's card via Stripe
- Send the customer an email explaining the hold
- Reserve the funds for the duration of the rental
The customer sees a pending authorization on their card statement, typically showing your business name and "BOND HOLD" or similar.
Auto-Refresh
If a rental extends beyond the original return date, Parked Funds automatically refreshes the hold. This ensures the authorization doesn't expire before the rental ends.
Important: Auto-refresh happens automatically. You don't need to do anything—we monitor the rental dates and refresh as needed.
Releasing a Hold
When a rental ends and there are no issues:
- The hold is automatically released
- No charge is made to the customer
- The authorization disappears from their statement (usually within 1-3 business days)
Capturing a Hold
If you need to charge the customer (for damage, late fees, etc.), you can capture the hold. This converts the authorization into an actual charge.
Note: In most cases, you'll create a post-hire charge instead of capturing the hold. This gives customers a chance to review and dispute if needed.
What Customers See
On Their Card Statement
The hold appears as a pending transaction with:
- Your business name
- A clear descriptor (e.g., "ACME RENTAL - BOND HOLD")
- The hold amount
- Status: "Pending" or "Authorization"
In Their Email
Customers receive an email when:
- The hold is created
- The hold is refreshed (if rental extends)
- The hold is released
The email explains:
- What the hold is for
- How long it will be held
- What happens next
- How to contact you with questions
Best Practices
Setting Hold Amounts
- Too low: Doesn't provide adequate protection
- Too high: May cause customer concerns or card declines
- Just right: Covers typical damage/incident costs without being excessive
Common hold amounts:
- Car rentals: $500-$2,000
- Equipment rentals: 50-100% of rental value
- Property rentals: Varies by property type
Communication
Always explain bond holds clearly:
- In your booking confirmation
- In your rental agreement
- On your website
- In the Parked Funds email (which we handle automatically)
Timing
- Create holds when the booking is confirmed
- Release holds promptly when rentals end without issues
- Don't hold funds longer than necessary
Common Questions
Q: How long do holds last?
A: Typically 7-10 days, but this depends on your Stripe settings and the card issuer. Parked Funds auto-refreshes if needed.
Q: What if a customer's card is declined?
A: You'll be notified, and you can contact the customer to update their payment method.
Q: Can I hold more than the rental value?
A: Yes, but be reasonable. Excessive holds may cause customer complaints or card issuer issues.
Q: What happens if the hold expires?
A: Parked Funds automatically refreshes holds for active rentals. If a rental has ended, you can create a post-hire charge instead.
Q: Do holds affect a customer's credit limit?
A: Yes, temporarily. The hold reduces available credit until it's released or expires.