Security deposits for rentals: how much to take and how to handle them

A deposit protects you from non-return and damage, but a large one scares customers away and a badly written one cannot be withheld. Here is how to strike the balance.

Money, not documents

A cash or card deposit is the most reliable option: the agreement says what it secures and when it is returned. Holding passports or driving licences is often illegal and makes you responsible for someone's documents.

How much

• A guide is the cost of the most common repair: 10–30% of the price for inexpensive units.
• For costly equipment (e-bikes, electronics) — closer to replacement cost.
• Regular customers with a good history can get a lower deposit — a reason to come back.
• The deposit should not exceed a reasonable damage amount, or customers go elsewhere.

How to handle it

• Amount and terms in the rental agreement: what is withheld (late fees, repair, loss) and when the rest is returned.
• Give a receipt for the deposit.
• Inspect first, return the deposit second — so you never chase the customer.
• Withhold by a price list for typical damage — fewer disputes.

Keep deposits separate from revenue

A deposit is the customer's money you will return, so the till must show it separately. In ProkatOS the deposit is set in the tariff, charged as a separate rental line and refunded when the rental closes, while damage and late fees are charged separately. See deposits, debts and partial payments and cash shifts.

A deposit only works if you can prove damage: take checkout and return photos and put the terms in your rental agreement.