06-03-2016, 05:18 AM
Would vacation rentals on the kona side typically ask for cash up front, and why?
It may be that they are trying to avoid credit card processing fees. The rental owner (let's hope they're the real owner) would have to key in the credit card numbers for an advance payment, as they can't swipe the card before their guests physically arrive, card in hand. When you key in credit card numbers you're charged the highest rate by your merchant services processor, and with a travel and rewards card that could be as high as 3.5%-3.65% per transaction (Costco/Elevon). With Bank ofGuido Hawaii credit card processing that can go up to 5%-6%. So on a $10,000 charge the rental property owner will pay $350-$600 in credit card processing fees.
On the other hand, if anything in their rental property is damaged or goes missing, with a credit card on file the property owner can simply charge the guest for additional costs. With a cash payment they would have to write a letter, and probably take them to small claims court. It's a big risk because an additional cleaning fee alone (if required) can be $500.
It's a big risk for the renter to pay cash, as if anything is not as advertised, they have very little recourse. If they use a credit card and something is wrong they can file a dispute, which encourages the property owner to correct the problem so the funds will be released. If it's a fake rental, I believe the credit card company can investigate the dispute, and reverse the charges. Not possible with cash.
“There are worse crimes than burning books. One of them is not reading them.”
-Joseph Brodsky
It may be that they are trying to avoid credit card processing fees. The rental owner (let's hope they're the real owner) would have to key in the credit card numbers for an advance payment, as they can't swipe the card before their guests physically arrive, card in hand. When you key in credit card numbers you're charged the highest rate by your merchant services processor, and with a travel and rewards card that could be as high as 3.5%-3.65% per transaction (Costco/Elevon). With Bank of
On the other hand, if anything in their rental property is damaged or goes missing, with a credit card on file the property owner can simply charge the guest for additional costs. With a cash payment they would have to write a letter, and probably take them to small claims court. It's a big risk because an additional cleaning fee alone (if required) can be $500.
It's a big risk for the renter to pay cash, as if anything is not as advertised, they have very little recourse. If they use a credit card and something is wrong they can file a dispute, which encourages the property owner to correct the problem so the funds will be released. If it's a fake rental, I believe the credit card company can investigate the dispute, and reverse the charges. Not possible with cash.
“There are worse crimes than burning books. One of them is not reading them.”
-Joseph Brodsky
"I'm at that stage in life where I stay out of discussions. Even if you say 1+1=5, you're right - have fun." - Keanu Reeves