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When a Guest accesses their booking, they can cancel it if it's within the 'Policy' period and for a fee (if required by the Policy). The benefit of allowing Self Cancellation is to free availability in order to re-sell the room.  The beauty of the 'Self Cancellation' system assures that the property gets whatever fee is due enabling tis important feature from the Guest.  Each property can 

Cancellation Policy

The most critical part of allowing Self Cancellation is making policies that support your business goals.  Set up the right Cancellation Policy and then that Policy gets assigned to a Rate.  When the booking is saved, that Cancellation stays with the Booking, so even if the Policy itself changes, what it was when booked is what will be enforced by the Self Cancellation system.

Cancellation Fee Applied to a Folio

When a payment is due for allowing 

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