Everything You Should Know About Hotel Credit Card Authorization Forms


Credit card authorizations are needed when the cardholder is different from the guest who'll be on property. Collecting card information ahead of a guest's stay via email, phone, or fax is risky, and it’s easy for fraudsters to take advantage of your authorization process if you don’t set it up properly. Our guide can help you optimize your workflow to reduce the burden of fraud and chargebacks.

What’s inside this guide:
  • Part One: Credit Card Authorization Forms 101
  • Part Two: Common Use Cases and Form Templates
  • Part Three: How Credit Card Authorization Forms Can Protect You From Fraud
  • Part Four: The Role AI Can Play in Authorizations and Fraud Prevention

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Part One: Credit Card Authorization Forms 101

What is a credit card authorization form?

A credit card authorization form allows hotels to obtain credit card information from a cardholder before a guests’ stay and later process it when the card is not in the hotel’s physical possession at the time of the charge.

How are credit card authorizations used?

The cardholder fills out and signs the form indicating the parameters for card usage, including terms like:

  • What types of charges can be processed using the card.
  • How much money can be charged to the card.
  • The dates in which the card can be charged.

Once the terms of how the card can be used are defined and signed off on by the cardholder, the form acts as a hotel’s permission slip for when and how they can charge the card on behalf of the guest. At the end of the stay, both the guest and cardholder receive a final bill that line-items all the authorized charges the hotel made during the visit.

How does a hotel credit card authorization form help with PCI compliance?

To maintain PCI compliance, businesses are encouraged to use secure methods for handling credit card information, such as encrypted online payment gateways or tokenization systems. These methods reduce the risk of unauthorized access, data breaches, and non-compliance with PCI DSS requirements.

Your paper credit card authorization form can potentially be out of PCI compliance for several reasons: 
  • Storage of Sensitive Information: Storing sensitive credit card information on paper forms can pose a security risk. If these forms are not stored securely or are accessible to unauthorized individuals, it increases the likelihood of credit card fraud or data breaches. 
  • Transmission of Information: Transmitting paper forms with credit card details via fax, mail, or email is not secure. This method can be intercepted, leading to unauthorized access to sensitive credit card information. 
  • Retention Period: PCI DSS (Payment Card Industry Data Security Standard) specifies guidelines for the retention and storage of credit card information. Paper forms may not comply with these guidelines if they are kept for longer than necessary or are not securely disposed of after use. 
  • Manual Processing Errors: Manual processing of paper forms can lead to errors, such as misplacing or mishandling the forms, resulting in potential security breaches or incorrect charges. 

Typical noncompliance fees are $5,000 to $100,000 a month. Digitizing your forms via a secure, PCI-compliant digital solution can help you avoid these steep penalties.

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Part Two: Common Use Cases & Credit Authorization Form Templates

Authorization forms are helpful when the cardholder is different from the guest and will not be on property to pay. One example hotels see regularly is when a business traveler’s trip is paid for by their employer. The authorization form can be filled out by a company representative, allowing the guest to make payments without the card present.

Authorization forms also make it more convenient for guests to make incidental purchases for items like parking, food and beverage, and entertainment. Whether they are staying at the hotel or utilizing a hotel’s event space, the authorization form allows guests to pay for services and amenities without needing to swipe their card each time.

Different Types of Credit Card Authorization Forms

To make your process faster and more secure, we’ve created a few free templates for you to personalize and offer guests.

Credit Card Authorization Form Template

A credit card authorization form is used to obtain permission from a cardholder to charge their credit card for goods or services. This form is typically used in situations where the cardholder is not physically present. Once the cardholder completes and signs the credit card authorization form, the hotel can process the payment using the provided credit card information.

Download Free Template

Group Credit Card Authorization Form Template

A group credit card authorization form is used in situations where multiple individuals within a group are collectively responsible for charges made on a single credit card. This form is commonly used for group bookings, events, or travel arrangements. By completing and signing the group credit card authorization form, the group representative and credit card holder give consent for charges to be made on the specified credit card for the group's expenses.

Download Free Template

Event Card Authorization Form Template

A credit card authorization form is used to obtain permission from a cardholder to charge their credit card for goods or services related to an event. This form is typically used in situations where the cardholder is not physically present. Once the cardholder completes and signs the credit card authorization form, the business coordinating the event can process the payment using the provided credit card information.

Download Free Template

Part Three: How Credit Card Authorization Forms Can Protect You From Fraud

What information is included in a hotel credit card authorization form and how can a form help you detect fraud?

When using an authorization form, it's important to capture specific details to protect both you and your guest. You can also use this information to spot a potential fraudster at work.

How guest information is filled out on an authorization form can reveal several clues to whether the information is legitimate and provided by the true cardholder, reducing the risk of fraud and chargebacks. 

Details to Reference:

  • Full name of the guest(s)
  • Contact information
  • Arrival and departure dates
  • Emails
  • Business name
  • Addresses
  • Phone numbers 

Fraudulent Traits to Look For & Steps You Can Take: 

  • Be on the lookout for vague, mismatched, or incorrect addresses, as well as any address with a P.O Box. Run a Google search of the provided business name to verify that it's real. 
  • Google Streetview can show you if the provided address is really a home, empty lot, bus stop, etc. 
  • If the provided cardholder and guest names are different, phone numbers should be different as well. 
  • Don’t accept a credit card if the address provided for the card and the address provided for the authorization are drastically different. 
  • Take note if a business email wasn't used with a business selection. 

Fraudsters like to act quickly (up to 48 hours prior to check-in), so many hotels have adopted a policy to not accept same-day reservations. While that may not be an option, here are some best practices to follow if you can adopt it: 

Details to Reference:

  • Arrival date 

Fraudulent Traits to Look For & Steps You Can Take: 

  • Adopt an advance deposit policy and charge a minimum or full amount immediately. If the transaction’s being made with a stolen card, the true cardholder will get a notification of the charge, which will prompt them to contact you.   
  • Require a second form of payment. If the first card fails or results in a chargeback, the second option is available. This process can be implemented for all same-day reservations. 

Cardholders can use authorization forms to indicate the services and amenities the hotel is authorized to charge their card for. This portion of the form helps hotels protect themselves from friendly fraud since there is a record of approval to make certain transactions. 

Details to Reference:

  • Amount authorized for incidentals and additional charges
  • The types of charges authorized
  • The dates in which the card is authorized to be charged 

Fraudulent Traits to Look For & Steps You Can Take:

By requesting that a credit card authorization form is fully filled out and signed by a cardholder before the guest’s stay, hotels can protect themselves from chargebacks post-stay.

To allow a hotel to charge their card, cardholders must provide their payment details within an authorization form. Hotels can also reference this information when trying to prove a card’s validity. The payment information recorded on an authorization form is sensitive and must be handled in a PCI-compliant manner to prevent cardholder details from being stolen. 

Details to Reference:

  • Cardholder's name
  • Credit card number
  • Expiration date
  • CVV (Card Verification Value) 

Fraudulent Traits to Look For & Steps You Can Take: 

In the tradition of paper forms, sensitive cardholder details are at risk. Paper forms can easily be misplaced or even stolen, and having the best intentions, like storing files in locked cabinets, can waste time and even backfire.  

Using a digital solution like Sertifi, hotel staff can keep information safe using encryption, password protection, specialized links, and other built-in protections. You can also take advantage of automatic ways of flagging a card’s validity by instantly verifying card-related information, e.g., by completing an automatic AVS check. 

Cardholders are meant to provide a signature along with the date the form was signed, indicating their consent to authorize charges to the credit card for the specified amount. Without a signature, the form cannot be activated or work as a legal document. 

Details to Reference:

  • Signature box
  • Date signed 

Fraudulent Traits to Look For & Steps You Can Take: 

If the signature on an auth form does not match the cardholder name, then it might be worth looking into, as this could be a sign of fraud. If the date is the same day as check-in, consider declining the business, as fraudsters prefer to act within 48 hours of check-in. 

FRONT DESK HELP

Fraud Warnings Guide

Keep this guide handy at your front desk, as it highlights the primary areas to check for fraud.

Download the Guide

Part Four: The Role AI Can Play in Authorizations and Fraud Prevention

Staying Ahead of Hotel Fraud with AI

With a rise in ecommerce transactions, combined with the growing threat of fraud in card-not-present (CNP) transactions, it’s more important than ever to get proactive and creative about fraud prevention.

If you haven’t yet incorporated AI into your fraud detection system, it may be time to consider it as a replacement for inefficient, error-prone processes that are probably resulting in too many chargebacks and costing you too much of your revenue.

For example, behind the scenes of Sertifi’s authorization solution are Kount’s fraud detection tools, which alert you to a potentially risky card before a guest’s arrival. As a merchant doing business online, it’s a great way to increase confidence that you’re accepting guests and cards you can trust, while maintaining a great customer experience and expanding your business with fewer chargebacks.

Machine learning is an extension of AI that uses mathematical models of data to train a computer to make decisions without human input. In the case of detecting credit card fraud, computers analyze and learn from credit card data to make educated decisions about fraudulent activity.

Here’s how it works with the Sertifi / Kount integration:

  1. An interaction happens. In this case, a person submits credit card information via a Sertifi credit card authorization form.

  2. Data is collected, including card details, name, payer IP address, email, physical address billing, an AVS check, and hundreds of other data points.

  3. Data is reviewed. The system analyzes the data using two types of machine learning models, supervised and unsupervised (more on that below).

  4. Fraud risk is determined. The system looks for red flags that could signal fraud and determines the card’s risk level with an A-F score. The score is a summary of the card’s complete history.

Transactions receive D and F ratings only when there are serious indicators of risk. For example, the card will be declined if the system detects hundreds of bookings being placed from a single location/IP address, a warning sign that card testing fraud may be at play. For hotels, this means the fraudster books several rooms, and if they go through, they know they can use the card for additional purchases or sell it to another fraudster. If rooms are booked with no intent of keeping the stay, you miss revenue from the room and the card processing costs, plus real guests may be negatively impacted by very limited room options being available.

Using the score and reasoning, you can decide whether to move forward with a card or not, leaving the ultimate decision-making in your hands. Businesses have different levels of risk they’re willing to take on, so the fraud scoring is only intended to supplement your decision-making. For example, the system will flag a same-day check-in or if the card is being used in a different location than the guest. There may be perfectly safe and reasonable explanations for these scenarios, so even when a card is flagged as risky, we always recommend following up with the person who submitted it and seeing if it’s legitimate business you can generate revenue from.

  • Supervised machine learning is the system’s memory, looking at historical patterns and trends to predict the outcome of the current interaction. For example, it recognizes an email address it’s seen in the past and remembers there’s a negative history with it. Over time, the system is getting more training and smarter about how to respond to particular information.

  • Unsupervised machine learning is based on instinct. The system looks at the current attributes of the interaction and immediately connects the dots on where the person has been and the card history associated with them. For example, it analyzes the type of device and the email address being used.

Because unsupervised machine learning focuses on short-term linkages and patterns, it catches emerging fraud attacks and anomalies that supervised machine learning cannot yet learn about due to the recentness of unseen attack types. Unsupervised learning is also much faster and more accurate than human judgement alone.

Yes, machine learning in fraud prevention systems can help reduce your chargeback rate – but keep in mind not all chargebacks are the same. Machine learning engines are trained to detect suspicious activity and help you reduce criminal-related chargebacks; however, not all chargebacks are due to legitimate fraud. Maybe your guest decided to initiate a chargeback instead of a refund for a legitimate transaction or genuinely forgot about a purchase they made from you. Machine learning would not prevent those types of chargebacks, though there are other steps you can take in these cases.

The biggest benefit is you’re replacing overly manual, error-prone processes with automation – without even losing any control. This makes it much easier to stay ahead of fraudsters and make data-driven, accurate decisions about who to trust. When you’re able to stop a fraudster early, you won’t see a chargeback eventually pop up, saving your revenue and your staff a significant amount of time.

In the end, machine learning is only as powerful as the data, support, and technology around it. That’s why Sertifi partners with Kount, a global leader that helps businesses stay ahead of evolving threats, seamlessly automate inefficient processes, and proactively protect revenue.

Sertifi Advanced Fraud Tools: A Practical Use of AI for Hospitality

Get a sneak peek at Sertifi's AI-powered fraud detection tools and how you can use card scoring to reduce chargebacks.

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