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Why do I have to give credit card # when using points or free night award?

Why do I have to give credit card # when using points or free night award?

Old Oct 5, 19, 3:06 pm
  #1  
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Why do I have to give credit card # when using points or free night award?

It seems every major hotel company I deal with requires me to give them a credit card number when booking a room with points or redeeming a free night award certificate?

Why?

They tell me that if I no show, they will take the points or certificate from me, they won't charge the card.

So why do they need the credit card to hold the reservation? They already have my points locked up.

I just went round and round with a Best Western phone agent like this:

Her: "We need a credit card number to make the reservation"
Me: "Why do you need a credit number?"
Her: "To make the reservation"
Me: But why? I'm paying with points.
Her: "We need the credit card number to hold the room."
ME: "Why?"
Her: "Because we can't hold the room without a credit card number."
Me: "Why don't the points hold the room?"
Her: "Because we need a credit card number."

It's the same with Hilton, Hyatt, IHG etc. I'm not going to try to fight it like crazy person, I'm just curious why.

The only thing I can think of is this: I'm going to need to show a credit card to check into the room anyway and to provide as a deposit, so it I don't have a valid credit card, they're going to want to tell em that now so I don't bother showing up. Also, they want to get the credit card at the earliest possible moment, so that if I show up and somehow manage to check in without showing a credit card, they'll have the reservation credit card on file to charge me for any damages.

I'm not sure though, is there some other reason why all these hotels require credit card numbers to make award bookings? Something I'm missing and that the Best Western lady couldn't explain?
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Old Oct 5, 19, 5:10 pm
  #2  
mia
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Originally Posted by jphripjah View Post
They tell me that if I no show, they will take the points or certificate from me, they won't charge the card.
That's not Marriott's policy:

3.2.c. The standard guarantee and cancellation policies of a Participating Property will apply to Award Redemption Stay reservations including, without limitation, all minimum length of stay requirements, credit card guarantee requirements and charges for late cancellation, no-shows, and early check-out.

i. A Point refund may be issued for a stay that is less than the number of days on the Redemption Award, but the Member must inform the Participating Property’s front desk in advance of the early check-out time in order for the Point refund to be issued to the Member’s Account.

ii. if a Member fails to cancel a guaranteed Award Redemption Stay reservation within the permitted cancellation period, the Participating Property will charge the applicable cancellation fee to the credit card provided by the Member at the time the reservation was made and the Points that were redeemed will be re-deposited into the Member’s Account.
Nor Hyatt's

Award Reservations are subject to the cancellation policy of the applicable hotel or resort. These policies vary by hotel and resort and each hotel’s and resort’s cancellation policy can be found on the page for that hotel or resort within hyatt.com (or miraval.com, as applicable), by calling the hotel or resort directly, or by contacting a Hyatt Global Contact Center. (Please see hyatt.com for contact information.) If a Member cancels an Award Reservation in compliance with the applicable hotel’s or resort’s cancellation policy, any corresponding points that have been deducted from the Member’s account will be returned to the account within approximately three (3) days of the cancellation. If a Member does not follow the proper cancellation policy for the applicable hotel or resort or if a Member does not check into the hotel or resort when scheduled, the credit card provided with the Award Reservation will be charged in accordance with the hotel’s or resort’s cancellation or no-show policy and any points redeemed for the applicable Award Reservation will be returned to the Member’s account.
Nor Hilton's

All Reward Stay reservations must be guaranteed with a credit card. Some hotels may require a deposit in lieu of a credit card guarantee. Deposits cannot be waived for Reward Stay reservations. No-shows or cancellations of Reward Stay reservations outside of the timeframe set by the hotel's individual cancellation policy will be charged one night's room and tax at the hotel's Best Available Rate for that date. General cancellation policy: cancel 48 hours prior to arrival to avoid cancellation penalties. Additional cancellation policies are established by each individual hotel and may differ from the general cancellation policy; in that case, the hotel's individual cancellation policy applies.

Last edited by mia; Oct 5, 19 at 5:16 pm
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Old Oct 5, 19, 6:05 pm
  #3  
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Originally Posted by mia View Post
That's not Marriott's policy:



Nor Hyatt's



Nor Hilton's
What's the logic for doing this? If I redeem a room at a Hilton for 50,000 points, and I show up, they deduct 50,000 points, but if I don't show up, they charge me the rack rate and give me back the points? Why?

This is what the Best Western Rewards policies say:

"If a free night reservation is not cancelled by the required hotel cancellation deadline and the guest is a “no show”, the BWR member account will be charged the proper amount of points for the date of the free night reservation."
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Old Oct 5, 19, 8:07 pm
  #4  
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Originally Posted by jphripjah View Post
if I don't show up, they charge me the rack rate and give me back the points? Why?
My guess is that the hotel doesn't get compensated by corporate for the award if you're a no-show.

Originally Posted by jphripjah View Post
This is what the Best Western Rewards policies say
You're perfectly free to change all your stays to BW.
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Old Oct 5, 19, 9:13 pm
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Originally Posted by mahasamatman View Post
My guess is that the hotel doesn't get compensated by corporate for the award if you're a no-show.

Why isn't the hotel compensated by corporate with my points whether I show up or not? What reason does corporate have not to do that?

I will now attempt to answer my own question. Here's my guess. Once you buy points or earn points or earn a free night certificate under the hotel's program, the hotel gets no benefit whatsoever to you actually using the points. They don't want you to use the points. They prefer that you just let the points or free night award expire. They would much prefer that their future room nights are filled with customers paying cash in new money, not people redeeming points.

Someone whose points or certificate are about the expire could, out of spite, just book a night at the Waldorf Astoria Maldives or Intercontinental Osaka or some other high end property just to be a jerk. Or the customer with the expiring points or award certificate might speculatively book a room night somewhere else even though the customer is 90% sure he won't be able to make it, because he's going to lose the points/certificates either way. When that happens, the hotel loses room revenue. So they try to deter people from redeeming points and not showing up with a policy like this.

Also, it deters people from booking rooms with points and then "selling" the reservation to someone for $100. Because if the dude you sold the reservation to doesn't show up, you might be charged the full rack rate instead of the hotel merely taking the points.

Last edited by MileageAddict; Oct 6, 19 at 6:14 am
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Old Oct 6, 19, 1:46 am
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There are two separate entities involved in (virtually) every hotel stay. One is the hotel group (Marriott, Hilton, etc) and the other is the hotel. With the rare exception of corporate-owned hotels, these are two separate businesses.

The hotel group run the frequent guest program. They set the policies regarding the redemption of points. If you're questioning the purpose of certain policy, you should think about the motives/goals of the hotel group...not any individual hotel.

Personally, I can't provide an insider take on why that policy is in place. I did once work in the central reservations office of a hotel group. But, it was one that did not have a formal frequent guest program. Had I worked for Marriott or Hilton, I might have actually asked because it is a bit strange.

I did, however, work in several different hotels over the years. Two of those jobs included working as a Revenue Manager. From that perspective, we would have gladly accepted points instead of cash for a no-show if that had been an option. Points are a guaranteed reimburse. A cash no-show charge is not.

Side note:
Many FlyerTalkers assume that hotels love no-shows because they get money without having to provide the room. But the reality is that many guests will dispute the charge. One of my hotel jobs was in Accounting. I had to respond to all chargebacks. We almost always lost no-show chargebacks. All the guest had to do was saw they canceled (usually that was a lie) and prove they were at another hotel or in a different city. The credit card company almost always sided with the guest in a no-show dispute. Every hotel will be different. But, I'd guess we only collected money on 30-40% of our no-shows.

In the end, without access to proprietary information or some former insider willing to talk, I doubt you'll find a good explanation.
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Old Oct 6, 19, 11:46 am
  #7  
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Originally Posted by jphripjah View Post
What's the logic for doing this? If I redeem a room at a Hilton for 50,000 points, and I show up, they deduct 50,000 points, but if I don't show up, they charge me the rack rate and give me back the points? Why?

This is what the Best Western Rewards policies say:

"If a free night reservation is not cancelled by the required hotel cancellation deadline and the guest is a “no show”, the BWR member account will be charged the proper amount of points for the date of the free night reservation."
Because you are more likely to show up or cancel the reservation if you are penalized in real money rather than "funny money" for a no-show.
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Old Oct 6, 19, 1:37 pm
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Originally Posted by writerguyfl View Post

I did, however, work in several different hotels over the years. Two of those jobs included working as a Revenue Manager. From that perspective, we would have gladly accepted points instead of cash for a no-show if that had been an option. Points are a guaranteed reimburse. A cash no-show charge is not.

Side note:
Many FlyerTalkers assume that hotels love no-shows because they get money without having to provide the room. But the reality is that many guests will dispute the charge. One of my hotel jobs was in Accounting. I had to respond to all chargebacks. We almost always lost no-show chargebacks. All the guest had to do was saw they canceled (usually that was a lie) and prove they were at another hotel or in a different city. The credit card company almost always sided with the guest in a no-show dispute. Every hotel will be different. But, I'd guess we only collected money on 30-40% of our no-shows.

In the end, without access to proprietary information or some former insider willing to talk, I doubt you'll find a good explanation.
Thanks. That's interesting about the no shows. I had no idea it was so easy to get the charges reversed just by saying "I called the hotel and canceled."

But I don't see why it's such a secret or why proprietary info would be needed to figure out the reason why they prefer to charge in cash. They should just say what the reason is.

Originally Posted by stc View Post
Because you are more likely to show up or cancel the reservation if you are penalized in real money rather than "funny money" for a no-show.
Yeah, maybe hotels really don't like no shows because then they get no incidental revenue like F&B, laundry, etc. in addition to not being able to fill the room. So perhaps "maximum financial punishment for guests who no show" isn't a terrible strategy.
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Old Oct 6, 19, 9:42 pm
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Originally Posted by jphripjah View Post
Thanks. That's interesting about the no shows. I had no idea it was so easy to get the charges reversed just by saying "I called the hotel and canceled."

But I don't see why it's such a secret or why proprietary info would be needed to figure out the reason why they prefer to charge in cash. They should just say what the reason is.



Yeah, maybe hotels really don't like no shows because then they get no incidental revenue like F&B, laundry, etc. in addition to not being able to fill the room. So perhaps "maximum financial punishment for guests who no show" isn't a terrible strategy.
In many hotel programs, hotels don't get paid anywhere near the normal paid stay rate for points redemptions. Some get a tiny fraction of that (perhaps about $20 per night when the room rate would have been about $100, for example?), unless the hotel is very close to fully booked perhaps (in which case the hotel program may pay the property significantly more on the same points redemption stay . So while the hotels have to honor that ultralow rate (from the hotel program) if the guest shows up, is it any surprise that they don't want to honor this ultralow rate when the guest doesn't show up? The contract is probably written in such a way that they only get reimbursed at all when the guest checks in, so a completely other mechanism for getting paid is necessary if the guest doesn't show up.

Meanwhile, the contracts between each hotel program and its franchisees is going to be different that for the next hotel program and its franchisees, so it's not a surprise that these policies may be somewhat different from one hotel program to another.

The reason the hotel program will not explain the reasons to you is most likely because the exact reasons are buried in private contracts between the hotel program and its franchisees, and why should you get access to such private contracts just because they're the only thing than can explain the reasons for such policies?

The miles and points words is filled with lots of different policies for which the reasons are never explained. This is far from the only policy for which the reason is not stated.
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Old Oct 6, 19, 11:55 pm
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Originally Posted by sdsearch View Post
The reason the hotel program will not explain the reasons to you is most likely because the exact reasons are buried in private contracts between the hotel program and its franchisees, and why should you get access to such private contracts just because they're the only thing than can explain the reasons for such policies?
Exactly this.

As you noted, hotels get paid very little when a guest uses points and the hotel isn't sold out. In one hotel I worked, the reimbursement barely covered our costs. If we had to upgrade the guest because they an elite-level member, we actually lost money.

While that information is widely known here at FlyerTalk, it actually could be considered proprietary information. If the answer to the OPs question is related to how franchises are reimbursed, that makes the question essentially unanswerable because of the reasons you mention in the above quote.
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Old Oct 8, 19, 12:18 am
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It's because of rockstars like me that throw TV's out of windows or more likely because they want a way to charge you for any incidentals/damage/etc.
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