Special American Express Programs for Lodging Merchants

American Express, like rivals Visa and MasterCard, has established special rules for lodging merchants accepting AmEx cards for payment.

Hotels, motels and other lodging merchants are required to obtain authorization at the time of check-in for the full estimated amounts of the charges, based on the room rates and the number of days the customer expects to stay, plus taxes (called Estimated Lodging Charges).

If the merchant fails to obtain an authorization for the Estimated Lodging Charge, but submits the transaction anyway, and the cardholder fails to pay the charge for any reason, American Express will have the right to charge back the transaction for the full amount.

Merchant are required to apply the 15 percent rule at the checkout:

• If the final transaction amount is no greater than the sum of the Estimated Lodging Charge plus 15 percent of the Estimated Lodging Charge, no further authorization is necessary.
• If the final transaction amount is greater than the Estimated Lodging Charge by more than 15 percent, obtain an authorization for the additional amount. If you fail to obtain an authorization for the additional amount or your request is declined, and the cardholder fails to pay the charge for any reason, American Express will have the right to charge back only the additional amount, provided an authorization for the Estimated Lodging Charge has been obtained.

Assured Reservations Program. Merchants participating in the Assured Reservations program are required to accept all American Express cards, except prepaid cards. For each Assured Reservation, you are required to confirm the reservation and record the cardholder’s name and address and the card account number and expiration date.

The merchant’s responsibilities under the Assured Reservations program include:

• Advise the cardholder, at the time the reservation is made, that the reservation may only be cancelled within the time frame specified by your reservation policy. You are also required to notify the cardholder of the “no-show” amount you will charge to his or her card in the event the cardholder does not appear or does not cancel in accordance with your cancellation policy.
• If the cardholder cancels a reservation, provide a cancellation number to the cardholder and maintain a record of the cancellation number.
• Use the proper “no-show” descriptor, when submitting a “no-show” charge or transmit the “no-show” descriptor on the charge data.

If you are unable to honor an Assured Reservation, you are required to do all of the following for the cardholder:

• Pay for a one night stay at comparable accommodations nearby.
• Pay for transportation to the alternate location.
• Pay for a three minute telephone call, if requested by the cardholder.
• Forward all communications for the cardholder to the alternate location.

CARDeposit Program. American Express allows merchants to submit charges for deposits, if they comply with the terms of the CARDeposit program. The merchant’s program responsibilities include the following:

• Forward written confirmation of the reservation and details of your cancellation policy to the cardholder within three days after the reservation is made.
• Upon arrival, ask the cardholder to show the card. If the card is not available, other identification needs to be shown.
• Ensure that the CARDeposit record includes the cardholder’s name, address, card number, expiration date, scheduled arrival date and the last date by which the cardholder may cancel without penalty.
• Complete a Record of Charge with the word “CARDeposit” on the cardholder signature line or if you submit electronically, the appropriate descriptor must be included on electronic Charge Data. Indicate the scheduled arrival date on the Charge Record.
• If a CARDeposit is canceled, send a written notice with a cancellation number to the cardholder within three business days. If a refund is due, submit a credit record with the words “CARDeposit Cancellation” on the signature line or the appropriate electronic descriptor on Charge Data.

If you are unable to honor a CARDeposit, you are required to do all of the following for the cardholder:

• Issue a credit for the CARDeposit.
• Pay for comparable accommodations nearby for the duration of the original reservation (not to exceed fourteen nights) or until the original accommodations are available, whichever occurs first.
• Pay for the cardholder’s transportation to the alternate location and for a return to the original location once each day until the original accommodations are available.
• Pay for one three-minute telephone call for the cardholder, if requested.

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