VROA SAMPLE NEWSLETTER - February 23, 2004
SUBJECT: Taking Credit Cards Smells Good, Tastes Bad

----------------------------------------------------------------------------------
*** This is just a SAMPLE. To receive the whole newsletter from the VROA every week and to support the Vacation Rental Industry please visit www.VROA.org and consider joining. Its just $59 per year and you'll get 10 times your moneys worth.
----------------------------------------------------------------------------------

Taking payments by Credit Card is another way to accelerate revenue, right? If that's what you are thinking I'd like to help put the brakes on. Yes, taking credit cards will make you look big time and maybe even increase revenue but it may also subject you to guest stealing money directly out of your checking account.

Some time ago - Carole Smith at Palm Springs Connection who has a number of beautiful vacation rentals (www.PalmSpringsConnection.com) wrote and asked, "How do you take Credit cards? I take Pay Pal only. I don't have a way to take Credit cards myself yet." Carol's comments have been repeated by numerous VROA members so I have been studying some of the various Credit Card purveyors in hopes of recommending a few to our membership.

Personally we have been taking credit cards for some years. It has been a mixed blessing and I am not yet prepared to make a recommendation partly because every program seems to have limitations and because of the danger that credit cards present to vacation rental owners.

INTRODUCTION TO CREDIT CARDS
Forgive me if you already take cards and have a comprehensive understanding of how they work. For those who may be new to the system or haven't yet been burned by them I'd like to provide a brief introduction so everyone knows what they are getting themselves into.

For those of us of baby boomer age or younger its hard to believe that once there was a world without Visa, Mastercard, American Express and their smaller siblings. The first credit card (as we know them today) was started in 1951. Today Mastercard is owned by 22,500 members (ie: financial institutions), is accepted at millions of locations (so they say) and processed an annual volume of 916 Billion Dollars through September 30, 2003.

The Visa credit card brand is owned by 21,000 institutions, accepted in 150 countries and had 2.7 Trillion dollars of transactions in 2003. This card came into its own in the 1960s and 1970s and today is the largest of the companies.

Cardholders (consumers) love credit cards. Everyone agrees that they make buying goods and services across the globe or across the street easier. But they also lure consumers into spending more than they can afford and charging them interest that in former times could have gotten a merchant thrown in jail for charging usurious rates. Consumer credit, especially from credit cards, is at record levels and expected to continue to rise.

The card companies have evolved to the point where they offer other services all marketed to their huge base of card holders. They sell merchandise and financial services and are power players in the comparatively new but evolving Debit card business. These Debit cards represent a significant change in how consumers use cards and, more importantly, how the transaction is accounted for.

Recently Visa & Mastercard were hit with a settlement that will cost them three billion in refunds to merchants. This conflict came about when the Visa/Mastercard duopoly required merchants to "Honor all Cards" or risk losing their merchant status. Retailers reacted violently, filed suit and have now emerged victorious.

WHAT CUSTOMERS THINK:
Most consumers are mistaken in their understanding of how cards work. They realize they are charged interest (usually at very high rates) when they charge something. But they are largely unaware that the merchant also pays a fee on the transaction. That fee may range from 1.5 to 3.0 percent and sometimes up to 7 percent of the charge amount. In short, the card associations are double dipping on the transaction and taking a significant portion of the sale.

Of course consumers could care less. A few understand they can often negotiate a better price from stores if they pay in real cash but most are just so happy to swipe the card and pretend its not money that they will never stop to question the system. Some years ago my best friend Ron wanted to buy a $80,000 motor home. As a long time musician living on the road he has always dealt in cash. Even he was surprised that the dealership accepted his offer of 47 crisp $1,000 dollar bills and didn't even ask for the tax. Amazing how cash works.

This is not to say that the card service is without value or that it should be free or cheaper. In a free market economy anyone should be able to price their services as they see fit. Because the marketplace is dominated but just a few mammoth organizations, however, the merchant is at a disadvantage and the consumer's lack of sophistication is preyed upon.

A CAUTION ON FEES:
By the way, merchant agreements all make it illegal to charge a premium to guests for using their credit card fee. If all merchants did that, fewer consumers would use cards and more would pay by check or cash. Some agreements even make it improper for merchants to offer a discount for cash payments.That would make the issuers unhappy so they have wired the system to their benefit.

============================================
This week's Sponsor: Plumley Drafting
Putting Floorplans on your website is a sure fire way to show guests what they get (and don't get) in your place. Kathleen Plumley has put together an easy way for home owners to have professional floor plans created for their properties. Accurate, attractive colorful drawings including furniture and other amenities.
See www.PlumleyDrafting.com
============================================

Now nothing prevents you from negotiating rates for your rentals and certainly you can ask a guest who they intend to pay before you quote rate. And some lodging reservations, especially central reservation services, charge a booking fee on all orders in the same way they do if they are also obligated to charge resort fees or special tourist taxes. But be reminded you simply can not tie together a lower rate with the guests agreement to avoid their credit card. Our recommendation is to quote fees based on the net income you hope to achieve after paying taxes, credit card fees and any other costs.

PREPOSTEROUS MYTH:
But the biggest problem with credit cards is the "big lie" that issuers have sold to consumers. A prominent "benefit" that they offer is to act as intermediaries between consumer and merchant in the event that the consumer is defrauded. While that sounds like a reasonable idea it has been misinterpreted by some consumers to mean that they can return any goods, at any time, in any condition, without sufficient cause and in regardless of a contract they signed - and that card company will require the merchant to refund their merchant.

Worse yet, credit cards have become so ubiquitous that the issuers know full well most merchants must accept cards just to stay in business. That, in turn, allows the issuers to play judge and jury in the event of disputes. They know full well that consumers can move from one issuer to another but that all Merchants are stuck in the system. Hence, when disputes arise the merchant often gets shafted even when the consumer is at fault. The associations utilize a system that is short on legal compliance and long on making consumers happy - even the crooked and self serving ones.

And it is this preposterous myth that vacation rental home owners must avoid or learn to control if they want to accept credit cards as payment for rentals.

HORROR STORIES
In one case, a woman reserved a home for 16 days on a non-cancelable contract. The day after arriving she decided she didn't like the home and asked for a cancellation. The owner refused. The next day the woman decided the home was dirty. The owner authorized a cleaner to visit but the guest refused them entrance. On the third day she vacated and a month later the credit card company debited the owner's checking account for $3,300. This process is called a "Chargeback" and the issue will put it through the system without almost no documentation from the cardholder. They will not ask for the rental agreement.

The woman had no legal right to the refund and had conveniently forgot to tell her issuer that the owner had already refunded her $500 damage deposit by check. So now she was in possession of $3,800 of the owners money. The owner can submit a request for reversal that, with the rental agreement, may be reversed. If so, the guest can put the chargeback through repeatedly and it will be handled the same way every time. The Owner gets debited, is forced to respond again and may be reversed again. Eventually the issuer may decided on behalf of the cardholder because in most Merchant Agreements there is language that says a cardholder can get their money back if they are simply "unhappy with their lodging." And they can do this even if they stayed the entire contracted period.

GUEST AGREEMENTS:
As you may remember we recommend that all guest agreements be non-cancelable. It is wise for owners to offer to resell booked dates for a guest who wishes to get out of their contract. But renting your expensive home on a cancelable basis would be as risky as renting that home to along term tenant and allowing them to move out in the middle of the night without paying. Owners have the right to determine the terms and conditions on which they offer their home for short term rental. Most states and countries have statutes defining the rights and privileges of lodging operators. These have come about over many decades, and in some cases centuries, because short term tenants are prone to defrauding Inn keepers.

So if you have a non-cancelable agreement and the guest pays by credit card is the agreement still valid? Maybe. In signing up for a merchant account you the merchant area agreeing to abide by the Visa or Mastercard rules. Most merchants never read those rules and if they do they will be shocked. In short, the associations deed themselves the right to decide whether the cardholder gets their money back - regardless of the agreement the consumer signed.

And what about if the guest breaks things inadvertently or knowing damages furniture or other expensive items. Your Guest agreement may say you can take it out of their damage deposit and charge overages to their credit card. But can you? Most of us know that hotels will charge you in the blink of the eye for charges but they know what they are doing. Have you ever noticed that hotels require you to present your card at checkin so they can swipe and leave the blank but signed receipt in your file. When you charge something they then just simply put it on your card.

Are you also aware that when you check in they get an "authorization" on your card that essentially holds the money for them until you check out? Don't ever check into a hotel where you think the charges will be $500 and have only $1,000 left on your card limit. They frequently put a hold on far more than the anticipated charges knowing that you may well run up the bill.

HOW TO TAKE CREDITS CARDS:

=====> Click here www.VROA.org to read the ENTIRE NEWSLETTER, or all the other great past and future issues. We hope you join and support the Vacation Rental Industry.


-------------------

INPUT:
As always I seek your input. Please share your tips, techniques, compliments, and complaints on this or any other subject by writing me at Director@VROA.org.

HOME OF THE WEEK:
I love creativity. Jimmy & Joanne Dunaway have a home at Paw Paw's Landing and their website says "snorin and explorin at the Ultimate Cabin Getaway." (Great name. Great slogan). See www.PawPawsLanding.com. (If you want your place considered for Home of the Week please drop me an email.)

FEEDBACK:
Nice newsletter! regards - the team at ovrentals.com http://www.ovrentals.com

Short and sweet. But I appreciate all feedback especially from everyone in the industry working hard to make it more fun and more profitable.
- Wm. May

ONLINE:
Please see these websites for fun:
- Sample Guest Booking Agreement
- Sample Booking Confirmation
- Sample Terms & Conditions

TELL A FRIEND:
If you like receiving these newsletters, if we've helped you even a little, please tell your friends by clicking here (Its automated & easy.) http://www.vroa.org/tellafriend/form.asp

===========================================
VROA OWNER NEWSLETTER
Published weekly for all Members
Copyright - Vacation Rental Owners Association
Read this and all prior newsletters at www.VROA.org

Director & Editor - Wm. May Director@VROA.org
Membership - Penny Taylor Membership@VROA.org
PO Box 21305
Seattle, WA 98111-3305
Voice: 206-343-7777
Fax: 206-628-0839
Email: Info@VROA.org
Web: www.VROA.org (for Members)
Web: www.VROA.com (for Guests - coming soon)
===========================================

Vacation Rental Central Worldwide

VROA SAMPLE NEWSLETTER - February 9, 2004
SUBJECT: Guest Checkin and Checkout lists

----------------------------------------------------------------------------------
*** This is just a SAMPLE. To receive the whole newsletter from the VROA every week and to support the Vacation Rental Industry please visit www.VROA.org and consider joining. Its just $59 per year and you'll get 10 times your moneys worth.
----------------------------------------------------------------------------------

Promises, promises, promises. I wanted to get back to the website strategy topic I promised a couple of weeks ago but another Owner question has come up and I wanted to pass on some suggestions on that. We'll get Part two of web strategies published in a future issue. (Hey, I'm a volunteer!)

GUEST CHECKLISTS:
Many private vacation homes are located in distant or remote areas. Frequently they are in areas and even climates that guests may not be familiar with. Owners are offering their expensive homes to guests that may not know how to operate them. We want them to have fun but we also want to avoid problems.

We've found the best way to do that is to provide and require all guests use a Guest Checklist when they arrive and when they depart - which they must return to us in order to receive their deposit refund.

Members can download a sample Guest Checklist by logging on to www.VROA.org. You'll find it under "Forms and Contracts."

THE PROBLEM:
As you've probably learned by now our family lives in Seattle Washington - - known for its rain and year round moderate climate. Yes we sometimes get snow in the winter for short periods and we get a few days of 100 degree weather in the summer. But all-in-all its an easy climate to live in. Almost no one has air conditioning and the entire city of 3 million people has only 10 snow plow trucks. So clearly we are not prepared for much difficulty.

Some of our rental homes are located in the Cascade Mountains just an hour away from metropolitan Seattle. Others are located in Eastern Washington on Lake Chelan - a popular resort area that is a four hour drive away. Both climates are challenging. At mid February we already have over ten feet of packed snow on the ground in the mountains (no exaggeration) and by July the temperatures will be over 100 in Eastern Washington.

Naturally, we have air conditioning (Heat pumps) in all the Chelan houses. And rip roaring fireplaces and hot tubs in the mountains. (Hot tubs are a nuisance in any climate but necessary for maximum income in the mountains. Operating them safely is a complicated subject so I'll examine that in a later newsletter.)

Some of you from similar climates may find this surprising, but as we began operating these houses we were surprised at little folks from moderate Western Washington knew about operating air conditioning. And how irresponsible a few guests can be about operating even simple systems such as furnaces and fireplaces.

============================================
This week's Sponsor: The Exchange Network.
Would you like to travel and never pay for lodging again? The key to your vacation home can open doors around the world. With over 1,000 member homes you can exchange dates for almost any location. Small yearly fee to join. Easy to use with helpful staff. See www.TheVacationExchange.com
============================================

Plus we've learned that some guests will complain about everything (such as "its too cold" in the mountains or "too hot" in Hawaii). Others will put up with burned out light bulbs, missing silverware and just about anything else. Neither situation is desirable. Houses are big machines that get lots of use from guests. And, just like your primary home, things will break or wear out or go missing. Luckily most owners have realized that the actual costs of such situations are small and simply a cost of doing business that we accept.

But if owners are not alerted to items that need attention then those same items could become problems to future guests. For maximum guest satisfaction maintenance issues need to be handled swiftly.

OCCUPANCY INFORMATION:
Owners seem to notify their guests about how to operate their homes in a number of ways. Some produce a "Guest Manual" (often a three ring binder, from the simple to the elaborate) that remains in the house and alerts Guests to the attractions in the area as well as to the Do's and Don'ts of operating the home. Some owners posts printed "Wall Notices" with details about the thermostat, garbage disposal and so forth. Some owners also provide written information in the letter they send guests before their occupancy begins.

Personally we do all three although that may be over kill in locations that have a front desk or where Guests check in personally with the owner or their representative. I've just posted some "Sample Notices" to the VROA.org website and members are welcome to download, alter and use them as they see fit.

CHECKLIST FORMATS:
On top of all that preparation we have taken to using a "Guest Checklist" in hopes that Guests will operate equipment properly and keep us posted of any problems. Our checklist is organized in two columns. The left hand side lists things the Guest should check when they arrive. These include things like checking the thermostat settings, opening the blinds and so forth. And asking if the home was ready for their arrival - were the beds all made, towels on racks and so forth.


=====> Click here www.VROA.org to read the rest of this newsletter, or all the other great past and future issues. We hope you join and support the Vacation Rental Industry.



INPUT:
As always I seek your input. Please share your tips, techniques, compliments, and complaints on this or any other subject by writing me at Director@VROA.org.

HOME OF THE WEEK:
Ed Reece has a charming get away home up in our neck of the woods - on Washington State's Puget Sound. I've never asked him why its called Harper House but check out his website at www.Harper-House.com. Instead of the usual he has an online video you might like. (If you want your place considered for Home of the Week please drop me an email.)

FEEDBACK:
It all sounds great, William. I would very much be interested in working with you in transforming this "new" activity into a more respectable "industry." One of my main concerns right now is that someone out there counterfeits a whole bunch of properties for rent ? It would do so much harm to the reputation our business! That?s why I believe in the credentials aspect of your offering.
- Walid, Paris

Thanks for the reminder. As I mentioned in January, we are revamping the inspection program to make it more functional. I hope to have that documented and underway by the end of the month. (For those of you on the inspection list, we will be contacting you directly)
- Wm. May

ONLINE:
Please see these websites for fun:
- Guest Checklist Form
- Sample Notices

TELL A FRIEND:
If you like receiving these newsletters, if we've helped you even a little, please tell your friends by clicking here (Its automated & easy.) http://www.vroa.org/tellafriend/form.asp

===========================================
VROA OWNER NEWSLETTER
Published weekly for all Members
Copyright - Vacation Rental Owners Association
Read this and all prior newsletters at www.VROA.org

Director & Editor - Wm. May Director@VROA.org
Membership - Penny Taylor Membership@VROA.org
PO Box 21305
Seattle, WA 98111-3305
Voice: 206-343-7777
Fax: 206-628-0839
Email: Info@VROA.org
Web: www.VROA.org (for Members)
Web: www.VROA.com (for Guests - coming soon)
===========================================