Glossary

Cancellation Number

In today’s economy much of our daily business is transacted electronically. Consequently, payment for these products, goods, and services is also made electronically with credit cards or debit cards. Occasionally, customers will need to cancel or change reservations or other arrangements they have made with a business. When this happens, the business issues the customer a cancellation number. It is important for customers to retain this cancellation number as it may be needed in the future to avoid improper charges to the credit or debit card used in the transaction.

Types of businesses that use cancellation numbers

Businesses that take and hold reservations for products and services typically use cancellation numbers when a reservation needs to be cancelled or changed. Commonly, this includes businesses such as hotels or motels, rental car agencies, and airlines. These businesses are agreeing to save a room, a vehicle, or a seat on an airplane for the customer. They, in turn, want to be sure the customer holds up their end of the bargain. If, however, a customer needs to make a change in their reservation, a cancellation number is issued to protect both sides.

How are reservations held?

When a customer contacts a business to make a reservation, the business typically takes the customer’s credit card information to hold the reservation. At this point there is no charge to the card, but the card may have a “hold” from the merchant. This hold is similar to a security deposit to protect the merchant. The credit card processing of the actual charge, though, does not occur until the time of the reservation.

Importance of a cancellation number

A cancellation number is the customer’s tool for ensuring proper credit card processing by the merchant account. Without it a customer may be unable to request a refund or prove they did not just fail to show up for accommodations. In this case the customer may incur charges from the merchant. The cancellation number proves that the reservation was properly cancelled and protects the customer from improper charges to their credit or debit card. The customer may also use this number to request a refund from the merchant account, or, in the case of a hotel or motel reservation, to avoid being charged as a no-show for the reservation.