How Much Should You Actually Refund? Here's Our Math.

In the last post, we covered how to respond when something breaks. Now the question I get asked more than any other: when something goes wrong, how much do you actually refund?

We don't wing this, and we don't negotiate it in the heat of the moment. We use data and simple math. The governing principle:

If it genuinely impacted the guest's experience, we adjust the booking value to match. No more, no less.

Start with how you bring it up

Say the AC isn't working on arrival. First, you run all five steps from the last post — acknowledge, triage, diagnose, commit, communicate. Refund talk comes after you're solving the problem, never instead of it. Then you say something like:

"We know you've had an AC issue, and I think it's only fair to compensate you for that."

Often the guest is already asking. But even when they aren't, we offer it anyway — because we want to be the kind of operator that lands on the right side of fair whether or not we're pushed there. That instinct, oddly enough, is also great business: a guest who didn't have to fight for fairness tells that story in the review.

The actual math

Here's the formula we use:

• Major issues (AC out, no hot water — the stuff that materially wrecks the stay): 30% of that day's booking value. If multiple days were affected, apply it across all of them.
• Minor issues: 10–15% of the affected day's booking value.

Anchoring the percentage to that day's booking value — not the whole reservation — keeps it proportional and defensible. A broken AC on night three of a seven-night stay isn't a 30%-of-everything problem; it's 30% of night three.

Two things we're always transparent about

• We don't refund taxes or cleaning fees. We don't collect the taxes — the platform does, and remits them. And the cleaning fee is earmarked for the cleaner who already did the work. Saying this plainly actually builds trust, because it shows the guest the numbers aren't arbitrary — there's a real reason for every line.
• We refund through the platform. That keeps it documented, clean, and protected for everyone — no off-platform cash, no he-said-she-said later.

The small stuff: goodwill over refunds

Then there's the category that doesn't really warrant a refund but absolutely shouldn't be ignored — the minor inconvenience that can snowball if you brush it off.

Classic example: the cleaner forgot to restock the K-cups, and now the coffee maker is useless on the guest's first morning. If you can't solve it instantly (check the closet, send a box via Instacart), a small gesture of kindness goes a long way:

You: "I'm so sorry the coffee maker isn't set up for you. I'm going to do two things: send K-cups to the house, and if they don't arrive by morning, go grab a coffee at the local shop on me — just shoot me the receipt here in the chat and I'll reimburse you through the platform."

That tiny gesture is what keeps a minor annoyance from snowballing into a major complaint. It costs almost nothing, and it tells the guest you're paying attention — which is the whole thing they're really evaluating.

The throughline

Everything in this series so far comes down to four moves: solve the problem, be fair, be transparent about the math, and add a little kindness on top. Do that consistently, and most "bad guest" situations never become bad reviews at all.

But some will anyway — because some guests simply can't be satisfied, no matter what you do. That's the final post, and it's the one I feel most strongly about.

Want a team that already runs this refund math by default, so you're not doing it at midnight? Here's how Oikos co-hosts short-term rentals.