Deposit or advance payment for an apartment booking: one word decides who loses on a cancellation

A guest books a date, pays an "advance", and two weeks before arrival cancels and demands a refund. Your calendar is blocked and you lost the chance at another booking. Can you keep anything? Almost always it depends on one word used at booking: deposit (zadatek) or advance (zaliczka). People use them interchangeably, and the difference can cost you the full price of the stay. Below we explain how they differ, when to use which, and how to protect yourself from cancellations and guests who never show up.

A deposit and an advance are two different legal constructs

Their consequences are completely different when something goes wrong.

An advance is part of the price paid up front. If the stay takes place, it counts toward the amount due. If the stay does not happen, the advance as a rule goes back to the guest, whoever is at fault. It is not a penalty for cancelling. For the owner it is the weakest possible protection: you block the date, and the guest can back out and get the money back.

A deposit protects your calendar. Polish Civil Code regulates it (Art. 394). In short:

• if the guest cancels through their own fault, you keep the deposit;
• if you cancel the booking, the guest can demand the deposit back at double the amount;
• if the stay goes ahead, the deposit counts toward the price;
• if the booking ends by mutual agreement or for reasons beyond both parties' control, the deposit is returned at its ordinary amount, without doubling.

An advance is refunded, a deposit is forfeited by whoever is at fault. If you want a guest's cancellation to carry a real cost, you need a deposit.

Why this matters for an apartment owner

Short-term rental lives on dates. A weekend blocked in season and then cancelled is not just missing income from that booking. It is also an offer you did not show to someone who would have come. With an advance, the guest cancels, you hand the money back and you are left with a hole in the calendar.

A deposit changes the balance. A guest who paid one has a reason to come, or to cancel well ahead while you can still sell the date to someone else. And if they cancel anyway, the kept deposit covers part of the loss. It is the simplest and cheapest protection against a no-show, a guest who did not arrive and gave no sign of life.

The double refund works both ways

If you cancel a confirmed booking because a better-paying guest turned up, you mixed up calendars or you want to use the apartment yourself, the guest can demand twice the deposit paid.

If you discipline the guest with a deposit, you have to keep your own calendar in order. The most common route to a double refund is a double booking of the same date from two sources. We wrote separately about avoiding that by syncing calendars. Here it is not about inconvenience, it is about real cost.

How much to charge and when

There is no mandated amount. You set it yourself, as long as it is reasonable and stated clearly before booking. In practice this works:

• 20–30% of the stay price as a deposit at booking. The guest feels committed and the amount does not put them off.
• The rest at check-in or a few days before arrival, depending on how firmly you want to secure payment.
• For pricier, long bookings (holidays, New Year's Eve, longer stays) consider a higher deposit, because an empty, valuable date costs more.

The amount and the word "deposit" must appear in writing and before payment: in the booking confirmation, in the terms, in the message to the guest. If you never write "deposit", in a dispute the payment is often treated as an advance, which is refundable.

Deposit vs. security deposit

Both payments appear at booking, but they serve different purposes:

• A deposit (zadatek) secures the booking itself (the guest will come and pay) and counts toward the price of the stay.
• A security deposit (kaucja) secures property, covers any damage and goes back to the guest in full after the stay if nothing happened.

These are separate amounts and separate mechanisms, and you can use both at once. How to set a damage deposit sensibly is covered in our text on security deposits in short-term rental.

Booking.com and Airbnb

On OTA portals the platform sets the payment and cancellation rules, and you choose a policy variant (flexible, moderate, strict). You usually do not collect a classic deposit in the sense of the Civil Code there. Settlements and refunds go through the platform.

A deposit shows its full value on direct bookings: on your own page, by phone or by email. You set the rules and keep the whole amount, with no commission to an intermediary. You save on commission and control how you secure a date. If you take online payments on your own booking page, collecting a deposit is one step in the booking flow, and the confirmation stating "deposit" is issued automatically.

How to set it up: a checklist

1. Decide what you want. If you want protection against cancellations, collect a deposit, not an advance.
2. Put it in the terms and the confirmation. Use the word "deposit", give the amount or percentage, the payment deadline and the consequences of cancellation for each side.
3. Tell the guest before payment. Rules a guest did not know before paying are hard to enforce later. Keep ready wording in your message templates.
4. Keep the calendar in order. A deposit works both ways, so avoid situations where you have to cancel a booking. The most common cause is a double booking.
5. Do not mix it with the security deposit. These are two amounts with different purposes. Separate them in communication and on the confirmation.
6. Be fair toward the consumer. Grossly one-sided clauses are often challenged as unfair contract terms.

Summary

A deposit and an advance differ in who bears the risk of a cancelled booking. An advance always goes back to the guest, so it gives only apparent protection. A deposit protects the calendar: a guest who cancels loses the payment, and when you cancel, you return double. Set an amount around 20–30%, call it a "deposit" in writing before payment and keep it separate from the damage deposit. You gain the most on direct bookings, where you set the rules and keep the full amount.

Want to close the cancellation topic? Read the article on cancellation policy. A deposit and well-set cancellation rules together form one system that protects your calendar.

This text is a practical guide and does not constitute legal advice. In unusual or disputed situations, consult a lawyer or accountant about your specific case.