How do refunds work when guests cancel?

When we were still very new at hosting, we set our refund policy to flexible, and got a booking for 15 days made months in advance.

We have since changed it to moderate, but this guest finally checked in, and on day 4 they want to cancel and get 11 days refund. It is perfectly within the rules, of course, and so we thanked them for the stay, but I am wondering how does the refund actually happen?

AirBnB told us that $825 would be returned to the guest. Do they withdraw it from our checking account? Or do they withhold future payouts? Of course we got no information from AirBnB - I did email but all they told us was how the days refunded were computed, and it was all pretty casual. Is this company run by 21 year olds or something? Anyway, I would be grateful for any insights.

The guest behavior stinks (now I’m just complaining) - it was someone who was moving here and booked way too many days (it only takes a few days usually to find a good rental situation here, no 15!), and so it really feels like they had planned this all along. But they offered to “help us out” by spreading the word. As if their word of mouth promotion makes up for the 1/3 of a month vacancy after having those dates booked for months. Oh well, glad they left and we were very lucky that we were able to get a few days rented quickly since this month seems to be pretty busy. Whew.

as far as i’m aware if Air have already paid you out, they will withhold payments from future bookings.


My understanding was that if a guest cancels their stay mid stay, then they forfeit what they’ve paid for the rest of the period, unless their stay is longer than a month, in which case, funds are released to the host on a monthly basis. No refunds involved!
I certainly would not refund in that scenario unless I get another guest to cover the same period!


This is why a strict cancellation policy is best. A lot of people like window-shopping on Airbnb, it seems.

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I learned my lesson early. My guest asked me to change the reservation for them. They wanted to leave a day early. Not knowing any better, I changed it as the host. So they got a full refund for that day. Then when they asked to leave AGAIN early, I told them they need to go through airbnb to cancel since they are the ones changing the reservation. They did and only got half back since I have a moderate policy. I will NEVER change the reservation myself. It was not clear on the airbnb site, or even when I called Airbnb.


I’ve had guests ask me to do the same. The first time it happened was for a three week booking in September, which is at the end of my busy season, but still does a brisk business. I almost did it, but then came here and saw what a bad idea it was. The problem was that I had tangential relationship with these people–they are friends with some colleagues of mine–and so did not want to get into the back and forth of an explanation, especially since they’d already been asking tons of questions. In fairness, their questions were reasonable and were not answered on the listing, but still, I was just getting fed up.

So I went in and blocked off two days in the middle of their stay, rendering the booking impossible. When they contacted me to ask me what had happened, I apologized, but explained that that’s why booking quickly on Airbnb makes more sense than waiting. I kept the days off the schedule for a week or so and then put them back on when another booking, one that also conflicted with those three weeks, had the same effect.

It’s like kona often says, we only have the one unit, so why run the risk of it being empty?


Manoa, just curious why your policy is not set on strict?

With a strict policy wanting to cancel for a “mind change” after check-in, not one thin dime would be returned. But yes, I believe if the payout was granted, it will be held against your account until future bookings pay it off. NO, I seriously don’t think they can debit from your checking account.

Interesting that Oahu has a better rental market than the Big Island. The housing crisis is really crazy here, and rentals are nearly impossible to come by.

I have had offers to “spread the word” too but that’s BS. Yes, you are lucky you could re-rent so quickly. It’s busy season here in Hawaii and it’s good to make hay while the sun shines. LOL. Come April, May, June, July, August and September… business drops like a rock!

I had a guest cancel a three-day stay for “illness in the family.”

She asked for a refund but I declined. Air wrote and said they would side with her because she had supposedly provided proof. Then said they would dock me the three days, even though she hadn’t even checked in yet! I protested!!! They apologized and reversed. Sheeze. In the meantime, someone else jumped on the time period. Wish it was like this every month!

Draining as guests are, it’s sure nice to have their cash!

I thought the cancellation had to be done 24 hours in advance of check-in - I didn’t realize they could cut their stay short and get a refund! I thought that once they checked-in, they were in!

Me too??? But I’m thinking what the OP is saying is that they asked for a refund during their stay? Or because she had the policy set on flexible when she was a newbie and flexible means anything goes? Not sure since I am strict… always have been, always will be. … In any event they tied up her place during the busy season and that’s lousy. Good she was able to rent it right away again.

I do this if there’s been an obvious error. For instance a guest just booked five days. She wrote in a panic, saying she’d booked a fifth day by accident. Of course I changed it for her. And having just done this myself at a hotel (no refunds, I was lucky they honored the original reservation as it auto cancelled when I didn’t show–arggh My own fault!) I have sympathy toward booking errors.

If she wanted to leave early, nope. Not on me.

Thanks everyone for the responses! It is good to know that they will withhold payouts instead of withdrawing from my checking account.

Yes I had this reservation under “Flexible” and they wanted to cancel on day 4. By then I had already received the payout. Flexible means they can cancel at any time with 24 hours notice, even after checkin so they were obligated for day 5 because they missed the 24 hr cutoff, but then got 10 days refund.

We now have “moderate” which we thought was OK because sometimes we change our minds too - just so long as we have time to get replacement bookings, but we may reconsider this. They are allowed to get 100% if they cancel before 5 days, or 50% if after the 5 days. So in the above scenario I we would get 1 more night (less than 24 hours) and then have to refund her 50% for 10 days.

We were worried that if we set it to “strict” folks wouldn’t book. I know that I always check the cancellation policy when I book a hotel, and it just makes me a little nervous when it is non-refundable, even though we rarely cancel. But again, we might have to rethink this.

We’ve been burned by modifying a reservation for a guest too! Somehow AirBnB reverted to the wrong rate and then dropped our cleaning fee. So never again. The guest can do it themselves.

Live and learn – thanks for all the info! You guys are the best.

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I have found this is an overblown fear and does not keep guests from booking.

I learned very quickly that ‘strict’ eliminates the possible ‘game’ of over-booking with nothing to loose, on their part. A few times there has been an error on their part, or a ‘harmless’ cancellation, meaning could immediately be refilled, and needless to say have refunded their money.

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Manoahost - thanks for clarifying this. I did not realize they could cancel with 24 hours notice at anytime during the reservation period!! I also am hesitant to use ‘strict’ because with a busy family I don’t feel confidence that my plans will pan out - though, like you, I don’t know if I’ve ever cancelled. I’ve changed to moderate now but I’m fairly booked for the summer already so I guess it won’t benefit me. Aw well, live and learn!

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I have a cancellation / change request situation at hands as we speak. I had a guest coming in today, but she emailed this morning to tell me she wants to come tomorrow and stay one day later. I said it is fine, but I will charge for the extra day. She is not happy with this. I thinkI have the right to do this, but it does not feel nice anyway. I sent a message to Airbnb to be sure, and they confirmed I will not be punished from their side as long as I don’t cancel the booking.

Well you are in the right. You can’t spring that on a host at the last minute. Of course you will charge for the extra night. Some guests just don’t get it.

Thanks for the moral support! The guest was adamant that she will not pay anything extra so we finally struck a deal where she pays less than half of the normal fee for the extra day. Not a nice situation. I hope it won’t feel too uncomfortable to meet her tomorrow.

@Erika This guest is trying to bully you. When they made the booking, they agreed to your cancellation policy. Now they want to break it and for you to pay the penalty.

In the future, I would tell the guest to alter the reservation themselves and not do anything on my end. I would simply state “guests can always make adjustments to the AirBnB website via the reservation system”. Then they will see that no matter which cancellation policy you choose, they will forfeit the day of the change – there is no poliicy that lets the guest change less than 24 hours in advance for free!

I would also say something like “I cannot change it on my end, because hosts incur severe penalties for canceling on guests”

I would just leave it for them to take care of their own issues. It is a weird thing but if they are dealing with the corporate third party they are less likely to argue.

How much do you need this booking? This person has already disrespected the agreed upon cancellation policy by asking you to forgive the violation, and has done so at the very last minute without even an excuse. This is very entitled and disrespectful behavior. Based on my past experience (and teaching students), I wouldn’t be surprised if they show up and ask for other things that were not provided in the listing, and then complain in the review.

If I didn’t need the money, I would let the guest know that you are no longer comfortable with them and ask her politely to find another booking, or that I would have to call AirBnB and inform them of the lack of respect for the cancellation policy. This really should not be an argument.

Another way to approach it in the future is to explain the choices. The cancellation policy is XXX so you can either do A or you can do B, and here are the consequences. You can call AirBnB if you have trouble. Matter of fact.

I recently had someone inquire about my place and wanted to book well in advance but they explained that they work for Delta and fly standby so she wasn’t sure if she’d get here on Monday or Tuesday. I guess she wanted me to give her free days! So I explained the cancellation policy and she declined to book. When the time came, she messaged me again to see if the dates were still available. Nope. People are so funny.


Thanks for the advice. I will be more stern in the future. She actually did send me a alteration request that was not acceptable on my end. I am already worried about how to write her review. It would feel fair to tell other hosts that she was difficult, but giving bad reviews feels somehow bad.

@Erika ha ha – Stern? It’s just following the rules. Just like when I had to refund 10 days because they followed the cancellation policy, which hurt, but must be done because those were the rules we agreed to at the outset.

Just like I’m sure your guest wouldn’t like it if you asked her to just shift her trip by a day so that you could accept a really great booking, right? It is a simple business transaction.

As for the review, just state the facts. After commenting on how they treated your place, etc. I would just say

“Guest did not respect cancellation policy and wanted a refund for the first night less than 24 hours in advance. When the request was declined, guest became very difficult until a 50% refund was offered.”

I think the message will be clear, but not vindictive. Remember you didn’t create the situation, the guest did. You sound like a very honest person who will keep their commitments.