One of the questions I get often is: “When is it ok to give a refund after a cancellation on Airbnb?” Or, “should I refund an Airbnb guest who cancels?” This is a valid question and one that depends on how strongly you want to enforce your policy.

Strict cancellation policy

I normally have a strict cancellation policy and encourage all of my students to do the same because I like to know that when my guests reserve my place, they’re committed to showing up. With a strict cancellation policy, a guest can get 50% of their money back if they cancel a full seven days before check-in. If they do not, you’re paid in full. If the booking is made more than two weeks before check-in, the guest has the option to cancel 48 hours after confirming their reservation for a full refund.

When I give a full or partial refund

A lot of times guests will plan poorly or have an emergency that will cause them to cancel their reservation. I understand that things happen and on a rare occasion I do make exceptions and give a full or partial refund. I give refunds after a cancellation when:

• I’m confident that I will fill the night (with a new reservation) to make up for the cancellation
• When the guest has been respectful and doesn’t demand a refund
• When a guest books by mistake and cancels within 30 minutes of the booking

​Respectful and polite guests

The most recent experience I had was with a guest who was super polite in his messages. Frankly, it was a little suspicious because I thought maybe he was being too polite and planned to throw a party because he only booked for 1 night on a Friday night.

Well, he canceled on Thursday afternoon, a day before his check-in. With the strict cancellation policy, he was entitled to a $0 refund, and he didn’t ask for a refund. He just said he had to cancel and hopefully next time he was in town he would be able to book one of my listings.

Normally, it’s very difficult to get a last minute reservation after a cancellation. This is one of the reasons I have a strict cancellation policy. But because he was so polite and didn’t act entitled, or even mention a refund, I made the decision to give him 50% of his money back.

It’s ok to give a refund

Sometimes it’s ok to refund in this business. Most people who cancel a reservation act entitled to a refund. Some of those folks become rude and inappropriate. I say sometimes it’s ok to refund your guests and bend your policies a little bit to encourage or reward great behavior. The behavior you want to see more of.

To watch a video about this topic, check out this video below where I share my reason for giving a refund. And while you’re on the page, like the video and subscribe to my YouTube channel.