When a customer with a reservation cancels their reservation within your late cancellation window, they will see messaging that is related to the penalty fee settings:
Loss of usage/credit: “You will lose a credit if you cancel this reservation. Are you sure you want to cancel?”
Charge: “You will be charged $X if you cancel this reservation. Are you sure you want to cancel?”
Loss of usage/credit and charge: “You will lose a credit and be charged $X if you cancel this reservation. Are you sure you want to cancel?”
No penalties: “Are you sure you want to cancel?”