How Smart Policies Apply to Reservations, Payments, and Cancellations

Some reservation changes can update upcoming scheduled payment amounts. The result depends on the type of change made to the reservation.

• Date changes:
  When stay dates are updated, the system recalculates the remaining balance and updates upcoming payment amounts accordingly.
• Room/rate changes:
  If a reservation is moved to a room or rate plan with a different rate, the remaining balance updates as long as the policy is configured to collect a remaining balance.
• Add-ons or items:
  Adding an item or add-on to the folio does not update the existing scheduled payment through the charge-adjustment workflow.
• Manual charge adjustments:
  When you use Adjust Charge to reduce the reservation total, Cloudbeds updates the pending scheduled payment to match the new remaining balance.

When a charge adjustment reduces the reservation total

Before you save the adjustment, the Policy section shows the current and updated upcoming payment amounts and the new reservation total.

If a balance is still due, the scheduled payment is reduced to match the new remaining balance. In the example below, the Policy preview shows the upcoming payment decreasing before the adjustment is saved.

If the guest has already paid enough to cover the adjusted reservation total, the upcoming payment is reduced to $0.00 and canceled.

If the adjustment also creates an overpayment, Cloudbeds displays a warning that a manual refund is required. The adjustment does not automatically refund the guest. The example below shows the scheduled payment reduced to $0.00 together with the overpayment warning.

After saving an adjustment, the scheduled payment may take a few minutes to reflect the updated amount.

• Successful or declined automated payments:
  • When an automated payment succeeds or fails, Cloudbeds can notify you via email if payment notifications are enabled.
• If an automated payment fails:
  • Contact the guest or request an updated payment method.
  • Complete any required manual payment action in the PMS.

Manual payment actions and Smart Policy automation

When Smart Policy is active and the reservation has pending scheduled payments, certain manual financial actions display a warning before you continue.

These actions include:

• Adding a manual payment
• Processing a refund
• Canceling a scheduled payment
• Voiding a payment or releasing an authorization
• Adding an item and charging for it during the same workflow

Before the action is completed, Cloudbeds explains that continuing will turn Smart Policy off and identifies the pending scheduled payments that will be canceled. The example below shows this warning while adding a manual payment.

If you confirm the action:

• The selected manual payment action is completed.
• Pending scheduled payments are canceled.
• Smart Policy is turned off for the reservation.
• Automatic payment processing stops.
• Automated collection or refund of cancellation and no-show fees stops.
• Any remaining balance or required refund must be handled manually.

The Smart Policy warning appears when Smart Policy is active and pending scheduled payments remain on the reservation. If there are no pending scheduled payments, these actions continue through their regular workflow.

System-generated routine actions do not turn Smart Policy off. For example, an authorization automatically released by the system at checkout is not treated as a manual staff action.

If you need to manage the remaining financial activity for a reservation manually, an authorized user can turn Smart Policy off from the reservation folio.

In the Folio tab, the Smart Policy control shows whether automation is currently on or off for the reservation.

Click the Smart Policy control to open the panel and review the current automation status, scheduled payments, and payments that have already been processed.

When you switch the Smart Policy toggle off, Cloudbeds shows the impact before you confirm the change. The panel explains which automated actions will stop and identifies the pending scheduled payments that will be canceled.

After you confirm:

• All pending scheduled payments are canceled.
• Automatic payment processing stops.
• Automated collection or refund of cancellation and no-show fees stops.
• Payments already collected remain on the reservation.
• Any remaining balance or refund must be handled manually.
• The reservation activity log records who turned Smart Policy off and when.
• Smart Policy cannot be turned back on for the reservation.

Once the change is processed, the Folio tab shows the Smart Policy status as Off.

Open the Smart Policy panel again to review the final state. Canceled scheduled payments remain visible, processed payments remain listed, and the panel confirms that Smart Policy cannot be turned back on for the reservation.

Permission required

Users need the Override policy payment rules privilege to turn Smart Policy off for a reservation. Users without this privilege can view the Smart Policy information but cannot complete the turn-off action.

To enable this privilege, go to the Account Menu > Settings > Users > Roles. Select the applicable role, locate Override policy payment rules under the Reservation privileges, and enable it for that role.

To learn more about creating and managing roles and privileges, see Add, edit, or delete roles and Role privileges.

When a reservation with active Smart Policy automation is canceled, Cloudbeds calculates the financial outcome according to the cancellation terms that apply to the reservation.

The cancellation confirmation window shows:

• The applicable cancellation fee;
• Applicable taxes and fees;
• The resulting amount to charge or refund; and
• The amount that will automatically post to the folio.

Automatic cancellation fee posting

When Smart Policy automation is active, the confirmed cancellation fee is automatically posted to the folio.

• For percentage and first-night cancellation fees, the calculated fee is used as the base amount and each applicable policy tax or fee is posted as an individual folio line item.
• A fixed cancellation fee posts as a single line item for the configured amount without additional taxes.
• If the calculated cancellation fee is $0, nothing is posted to the folio.
• For multi-room reservations, the cancellation fee is distributed across the individual rooms so that the itemized amounts equal the total fee.

What happens to existing folio activity

• Unposted pending reservation charges follow the standard cancellation process and are removed.
• Charges that have already posted remain on the folio.
• Payments already collected remain on the reservation.
• The automatic cancellation fee does not reverse or offset existing posted charges.

Card charges and refunds

Folio posting and card settlement are handled separately. Based on the policy outcome and the amount already paid, the guest may need to be charged or refunded.

• If the guest has underpaid the applicable fee, Cloudbeds attempts to collect the remaining amount when supported by the reservation's Smart Policy automation and payment setup.
• If the guest has overpaid, the applicable refund is processed when supported by the automation.
• Payment processing may take approximately 15 minutes to be reflected on the guest's card.
• If an automated card charge fails, the cancellation still proceeds. The cancellation fee remains on the folio as a balance due and follows the standard payment retry workflow.

Override the cancellation policy

Users with the appropriate permission can override the automated cancellation outcome by deselecting Follow cancellation policy in the cancellation flow.

• Cloudbeds displays that the cancellation fee is being overridden.
• A reason is required for the override.
• The override is recorded in the reservation activity history.
• The overridden automatic fee is not posted.

Smart Policies can define a no-show fee separately from the cancellation policy. The no-show outcome is applied whenever the reservation status changes to No-show.

This applies when the status is changed:

• Manually by property staff;
• By an integrated system; or
• During the nightly audit.

How the no-show fee is determined

The reservation uses the no-show terms defined in its Smart Policy. Depending on the policy configuration, the no-show fee can:

• Follow the cancellation policy; or
• Use a custom no-show amount configured as a percentage of the total, a fixed amount, or the first night's price.

Automatic no-show fee posting

When Smart Policy automation is active, Cloudbeds automatically posts the confirmed no-show fee to the folio.

• For percentage and first-night no-show fees, applicable policy taxes and fees are posted as individual folio line items.
• A fixed no-show fee posts as a single line item for the configured amount without additional taxes.
• If the no-show fee evaluates to $0, no fee is posted.
• For multi-room reservations, the no-show fee is distributed across the individual rooms.

Existing folio activity follows the same standard behavior as a cancellation: unposted pending charges are removed, while charges that have already posted and payments already received remain on the folio.

Override the no-show policy

Users with the appropriate permission can deselect Follow no-show policy during the no-show flow. Cloudbeds displays the effect of the override and requires a reason. The override is recorded in the reservation activity history.

Duplicate fee protection

Cloudbeds prevents the same room from receiving multiple automatic cancellation or no-show fees. Each room can receive only one automatic fee from these events.

For example, if a no-show fee has already been automatically posted and the reservation is later canceled, Cloudbeds does not automatically post another cancellation fee for the same room.

If a fee was previously waived, however, this does not prevent a subsequent valid cancellation or no-show fee from being applied.

Automatically posted cancellation and no-show fee line items are classified separately from regular stay revenue.

• Cancellation fee line items are categorized as cancellation revenue.
• No-show fee line items are categorized as no-show revenue.
• These amounts remain separate from standard accommodation or stay revenue in financial reporting.

If a guest cancels in the Guest Portal, Smart Policy automation does not run automatically.
Staff must manually process the refund or penalty.

Here are examples of how Smart Policies behave during daily operations:

1. The guest changes stay dates:
   • The remaining balance and scheduled payments adjust automatically based on the updated dates and rates.
2. The reservation total is reduced with Adjust Charge:
   • The pending scheduled payment is reduced to match the new balance.
   • If the adjusted total is already fully covered by collected payments, the pending scheduled payment is canceled.
   • Any resulting overpayment must be refunded manually.
3. An item or add-on is added:
   • Adding the item or add-on does not update the existing scheduled payment through the charge-adjustment workflow.
   • If staff add the item and charge for it during the same workflow while pending scheduled payments exist, confirming the manual payment action turns Smart Policy off.
4. Staff manually manage a payment or refund:
   • When Smart Policy is active and pending scheduled payments exist, the system warns staff before completing an affected manual payment action.
   • If staff continue, pending scheduled payments are canceled and Smart Policy is turned off for the reservation.
5. The reservation is canceled:
   • Cloudbeds calculates the applicable cancellation fee and, when Smart Policy automation is active, posts the confirmed fee and applicable policy taxes and fees to the folio.
6. The reservation is marked as no-show:
   • Cloudbeds applies the reservation's configured no-show terms and, when Smart Policy automation is active, posts the confirmed no-show fee and applicable policy taxes and fees to the folio.
7. The guest wants to update their card:
   • Staff can update the card; future automations continue as long as Smart Policy automation remains active.
8. The guest wants a different Smart Policy:
   • The Smart Policy assigned when the reservation was created cannot be replaced with another policy.
   • Turning Smart Policy off stops automation but does not assign a different policy to the reservation.

• Review the Smart Policy status before manually managing payments on a reservation.
• Review warnings before confirming manual financial actions. Cloudbeds shows when pending scheduled payments will be canceled and Smart Policy will be turned off.
• Review the cancellation or no-show fee before confirming the status change. The confirmation flow shows the applicable financial outcome and automatic folio posting.
• Review existing posted charges for late cancellations and no-shows. Automatic fee posting does not reverse charges that have already posted to the folio.
• Use the Adjust Charge preview to confirm how a reduction will affect the upcoming scheduled payment before saving.
• Remember that turning Smart Policy off is permanent for the reservation. Any remaining payments or refunds must be managed manually.
• Review scheduled payments periodically for operational accuracy.