Visa Guarantees Car Rentals at Peak Times

At the behest of major car rental companies, Visa U.S.A. has introduced a guaranteed reservation service for peak travel times.

Visa said the service was available beginning Monday at participating renters, including Hertz, Avis, National, and Budget. Cardholders who give their account numbers at the time of their reservation can be assured that a car will be awaiting them.

To attack a growing "no show" problem, the rental companies will offer guarantees when demand is high, mainly around holiday periods and special events. The service will be similar to the hotel late-arrival guarantees that customers can secure with credit card numbers.

Visa, the first of the major card groups to introduce the car-rental convenience, said users will no longer have to book cars at a number of agencies to make sure they get one. By reducing the number of no-shows, the rental companies should be able to manage their fleets better.

As a byproduct of the guarantees, renters would penalize no-shows. Visa no-shows would have to pay as much as a one-day rental fee if they do not cancel reservations at least eight hours before the scheduled pickup.

American Express Travel Related Services Co. is developing a similar service, which a spokesman said could be available in the first quarter. A no-show penalty of up to two days would kick in if a reservation was not canceled 48 hours in advance.

MasterCard International does not have a rental guarantee in the works, a spokesman for that association said, because "we haven't seen a great deal of interest in something like this."

Visa said the service is voluntary. Cardholders can still reserve cars in the customary manner. A guarantee ensures that customers whose rental cars cannot be delivered in an hour will be transported to their destinations, provided with cars within eight hours, and given a free day's rental.

Under American Express' proposed plan, if a rental company overbooked and did not have the customer's vehicle, it would have to secure a comparable one from another firm. If it could not do so, the rental agency would provide an alternative vehicle at a rate no higher than the original car and it would waive the first day's fee.

American Express and Visa, which are first and second, respectively, in car rental charge volume, said the rental companies came to them this year seeking a solution to the no-show problem. No-show rates go as high as 70% during peak periods.

Not all rental agencies have committed to the guarantee service. A spokeswoman for Alamo Car Rental said the company is evaluating it and has not made a decision.

Janet Maizner, a spokeswoman for Value Rent a Car, said, "We normally take a wait-and-see attitude" to any new service that other agencies adopt.

"Overall, it's a good move for the industry," Ms. Maizner said, adding that it is hurt by "double and triple booking."

Visa also is introducing an advance deposit program, allowing customers to charge a deposit for rentals of up to 14 days. The association plans to change its rules and procedures to permit the car rental deposits, similar to an adjustment made in 1989 for hotels.

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