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Policies & Legal

What is a Breakage Deposit?

Updated 2026-05-28

A breakage deposit is a specific type of security deposit that a host requires from a guest to provide a financial safeguard against accidental damage. This fee is collected prior to check-in and is fully refundable.

After the guest departs, the property is inspected, and if no breakages or damages are found, the deposit is returned in full within a specified timeframe. If damage has occurred, the host can deduct the cost of repair or replacement from the deposit, providing the guest with documentation for the charges.

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How it works

The host determines the amount of the breakage deposit and clearly states it in the listing details, house rules, and rental agreement. The guest pays this amount, typically through a credit card hold (pre-authorization) or a direct payment, separate from the rental booking cost.

Following the guest's departure, the host or property manager conducts a thorough inspection of the property, often using an inventory checklist. If the property is left in its original condition, the deposit hold is released or the amount is refunded.

If damages are identified, the host documents them with photos, obtains repair estimates, and informs the guest of the deductions before returning the remaining balance.

Why it matters

A breakage deposit incentivizes guests to treat the property with care, as their own money is on the line. For hosts, it provides a direct and immediate financial resource to cover repairs or replacements without having to go through a lengthy insurance claim or OTA resolution process.

This method offers clear financial accountability and helps maintain the property's condition for future guests. It establishes a transparent process for handling potential damages, protecting both the host's investment and the guest relationship.

Examples

  • A family staying at a beach cottage accidentally cracks a glass tabletop. The host uses $150 of their $400 breakage deposit to replace the glass and refunds the remaining $250.
  • A host requires a €1,000 breakage deposit for their luxury apartment. The guest pays via bank transfer a week before arrival. After an incident-free stay, the host transfers the full €1,000 back to the guest within 7 days of check-out.
  • Upon inspection, a property manager finds a large red wine stain on a living room rug. They obtain a quote for professional cleaning for $120, deduct this from the guest's breakage deposit, and provide the guest with the cleaning receipt along with the refunded balance.
  • A host uses a credit card pre-authorization for a $300 breakage deposit. A hold is placed on the guest's card at check-in and is automatically released 72 hours after check-out once no damage claim is filed.

Frequently asked questions

What is the difference between a breakage deposit and a damage waiver fee?+
A breakage deposit is a refundable amount held during the stay and returned if no damage occurs. In contrast, a damage waiver fee is a smaller, non-refundable fee paid by the guest that covers accidental damages up to a certain pre-set limit, acting as a form of limited insurance coverage.
How much should a breakage deposit be?+
The amount varies based on the property's value, the quality of its furnishings, and local market standards. A typical range is $250 to $1,000, though it can be higher for luxury properties. The goal is to set an amount that provides adequate coverage without deterring potential bookings.
Is a breakage deposit the same as a security deposit?+
The terms are often used interchangeably, but 'security deposit' can be a broader term. A security deposit might cover damages, the need for excessive cleaning, or financial losses from violations of house rules (e.g., unauthorized parties), whereas a 'breakage deposit' specifically emphasizes covering things that are broken or damaged.
What is the best way to collect a breakage deposit?+
While cash collection is an option, it poses logistical challenges. A more common and secure method is using a credit card pre-authorization. This places a temporary hold on the funds on the guest's card without actually processing a charge, and the hold is automatically released after a set period if no claim is made.
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