Marriott Took $1,000 For A Prepaid Stay—The Guest Showed Up To A Closed Hotel, And They Don’t Know Where The Money Went

Just last week I wrote about a Marriott guest booking a hotel and showing up to find out that it wasn’t even open. Marriott wouldn’t help, and they were forced to spend more points to get a room. The chain’s “Ultimate Reservations Guarantee” didn’t apply because they couldn’t actually enter the property to get walked from it. So the Marriott did not guarantee a thing.

Now here’s a story that is even worse – because the Marriott customer showed up at a closed hotel and they were on a prepaid rate – but Marriott won’t give them their money back.

Spent 1000 dollars on a marriott hotel in September. When I arrived, this was stuck to the door with no prior warning. I had to pay for a new hotel and still have heard nothing about the $1000 that support said I’d be refunded.
byu/atraeurichardson inmildlyinfuriating

The guest booked a pre-paid rate at Marriott.com in June 2025 for three nights in September at the Fairfield by Marriott Inn & Suites Louisville North across the river from Louisville and paid with a debit card. On arrival, the hotel had a paper sign saying it was temporarily closed and directing people to call reservations.

Marriott customer service offered to find them another room – but they would have to pay for it, even though they’d already paid for their stay at the first Marriott. A month later, their prepaid $1,000 still hadn’t been refunded.

Credit: Marriott

Marriott actually said, on a call the guest recorded, that they don’t know where the money is, don’t know when it will be returned to the guest, or where it would even come from.

Other guests confirm the hotel’s closure, and third party booking sites show it as blocked out from further reservations.

The owner of the hotel, KNS Motel, Inc. (d/b/a Fairfield Inn & Suites, 619 N. Shore Dr., Jeffersonville, IN), filed Chapter 11 bankruptcy in 2023 and converted to Chapter 7 liquidation on September 5, 2025.

The problem for guests is that Chapter 7 triggers an automatic stay under 11 U.S.C. § 362 halting direct collection of debts and generally freezes the debtor’s ability to pay unsecured pre-petition claims like prepaid stays, except as authorized by the court. Customers seeking refunds from the debtor are unsecured creditors.

Credit: Marriott

Marriott “Advance Purchase / Pay Now” rates have the merchant of record as the individual hotel (the franchise). Your card is charged by that property’s merchant account—not by Marriott itself. You are booking through Marriott, but not buying from Marriott.

So when a property enters bankruptcy and shuts its merchant account, Marriott corporate doesn’t have your funds. So they can’t just unilaterally refund back to your card. And they don’t want to pay themselves.

And while Marriott publishes an “Ultimate Reservation Guarantee” meant to make you think that if a hotel can’t honor a reservation, they will pay for nearby accommodations for that night and compensate you, that’s not applicable here.

Credit: Marriott

In this situation you’re really left with a credit card dispute. You’re much better off paying with a credit card than a debit card, since a credit card dispute freezes the transaction and you don’t have to pay it while the dispute processes (you even get a credit back in the meantime if you’ve already paid, under most circumstances). With a debit card you may be out the money until the dispute finalizes. But you can still do a dispute.

• With Visa (Reason Code 13.1 Merchandise/Services Not Received) you have 120 days to file your dispute from the latest expected service date or the date you were informed that service won’t be provided, capped at 540 days from the original transaction.

• With Mastercard (Reason Code 4853 Goods/Services Not Provided) the rule is typically a similar 120 days.

• American Express has 120 days to file as the default with “goods/services not received” extending that timeframe (there’s no 540‑day cap that I am aware of).

This is a hidden risk most travelers do not think about – when they make a prepaid reservation at Marriott.com they aren’t doing business with Marriott at all. They’re usually doing business with a company they’ve never heard of, that’s who charges their card, and that’s who is on the hook to deliver. Marriott isn’t that different from Uber, connecting you with an independent driver. And there’s counterparty risk. At least with Uber, that’s who’s charging your card. The driver isn’t taking your money in advance, leaving you out the funds if they don’t show up for the ride.

Credit: Marriott

I should flag that credit card network chargebacks are far more generous than your rights under the Fair Credit Billing Act for goods not received. That allows you 60 days from the statement date to send written notice (15 U.S.C. §1666 / Reg Z §1026.13). And for a booking made far in advance you’re not going to be covered!

Credit: Marriott

In fact, under Hasan v. Chase Bank USA, N.A. (consolidated with Hasan v. American Express), the U.S. Court of Appeals for the Tenth Circuit held that a cardholder can assert claims against their card issuer only up to the “amount of credit outstanding” on the disputed transaction when notice is given. In other words, if you’ve already paid the charges on your card you don’t have a legal claim. In that instance, the merchnat went bankrupt and never delivered the purchase but the cardmember didn’t have statutory protection.