Handling cancellations and payment returns is an inevitable part of running an accommodation property. When you need to process a credit card refund, understanding the practical difference between a refund and a reversal—and knowing who covers the banking charges—helps you protect your cash flow and manage your guest accounts with complete peace of mind.
If you process guest payments with NightsBridge Pay, here is a straightforward guide to your refund options, how bank fee rules affect your payouts, and how to update your policies to protect your revenue
A quick note on bank costs
In October 2023, banks introduced a system-wide rule change: financial institutions no longer refund their original transaction fees (the credit card commissions) when money is sent back to a guest’s card.
Because NightsBridge Pay works just like an online, virtual card machine to process payments, these standard banking rules automatically apply to all card transactions processed through the system.
Your refund options
When you need to return funds to a guest through NightsBridge Pay, you have three clear choices depending on your property's cancellation policies:
- Full refund: You return the exact amount the guest originally paid. Keep in mind that because the bank retains its transaction fee, your property carries the bank costs for the transaction.
- Refund less bank costs: You return the guest’s payment but deduct the original bank transaction fee. To use this option, your guests must be notified in advance through your terms and conditions. (Please note: This option does not apply to same-day reversals, where the transaction is cancelled before settling).
- Partial refund: You return an agreed portion of the payment, such as an amount calculated according to your tiered cancellation policy.
Refund vs reversal: What is the difference?
While they sound similar, refunds and reversals function very differently behind the scenes:
- Reversal (the "undo" button):A reversal cancels an uncompleted transaction before the money leaves the cardholder's bank. With NightsBridge Pay, you can initiate a reversal right up until 22:00 on the same day the transaction occurred. The funds go straight back to the cardholder and never settle into your NightsBridge Pay account. It simply treats the transaction as if it never happened.
- Refund (the "give it back" button):A refund takes place after the transaction has fully cleared and the funds have settled into your merchant account. In this case, you are sending money back to the guest from your settled revenue.
More detailed information on the topic is available in our article, Refunds and Reversals with NightsBridge Pay.
Protecting your property in your terms and conditions
If your property's policy is to deduct processing fees when returning funds for a cancelled booking, you must clearly inform guests before they complete their reservation.
The best way to do this is by updating your property's Terms and Conditions on NightsBridge. We recommend adding a clear, straightforward sentence such as:"Any fees charged by banks or payment gateways for processing a transaction are not refunded in the event of a cancellation or refund."
Having this clause clearly visible at the time of booking prevents misunderstandings and ensures both you and your guests are on the same page from day one.
Remember, dealing with banking rules can sometimes feel overwhelming, but you are not alone. If you are ever unsure about processing a refund or updating your policies, our support team is always just a phone call away!