No-Show Penalties Tried on Car Rentals

Hotels do it. Tour companies do it. Now car rental firms want to do it too.

The “it” is charging cancellation fees. This summer, in selected cities, Budget and Dollar began charging customers a full day’s rental if they fail to cancel at least 24 hours in advance on vehicles they’ve reserved by credit card for a weekend. Both firms say the policies are experimental, but a Budget spokeswoman said, “We’re hopeful that the rest of the industry will take heed and follow us.”

The companies say they want to cut down on no-shows that can average 20% or more. Dollar, which began testing the policy Aug. 1 in Boston, Manhattan, Brooklyn and Queens, offers a carrot with the stick: discounts of about 10% for customers who reserve by credit card versus those who call for a reservation without securing it. At Seattle’s airport, where Budget just ended a test of the policy, customers didn’t get a discount, and they only were able to reserve by credit card.

Thrifty has imposed a no-show penalty in most U.S. sites since 1995, a spokeswoman said, but it generally allows credit-card customers to cancel right up to pickup time.

Currently, most major rental companies charge cancellation fees only for specialty vehicles or during major events. National and Avis said they have no current plans to expand the practice. Hertz refused to comment.