Tenant background and credit check question

[Steven Sestir]

I saw this in BiggerPockets -Typically, if a tenant applies for a property and fails to qualify – they forfeit their application fee due to the time and cost associated with working their application through. However, if you deny them simply because someone else came first, then you must return their application fee.  

Is this for a background and credit check fees I would have to pay a person back?  Also if you have a couple of could be tenants that check each box on your check list, how would you deny one over the other?  I just want to be safe and I have never have did the application process for a new tenant.  

Any help would be great thank you.

Steven Sestir