A few things can cause checkout anxiety, but I say the top two are not being able to put your change away fast enough before the next customer and being greeted with a significant fat decline across the receipt. Most of us have had it happen for tons of various reasons at one point or another. credit card declines
No one likes a decline message, so customers must be shown some discretion while finding an alternative. Business owners need to be prepared to handle such situations; luckily, most declines are resolved efficiently. Losing a sale may be a disappointment but having that customer ditch your business for another based on poor handling of a crappy situation is a worse fate.
Visa and Mastercard report an average of 15% of recurring payments are declined, but the rate can be double that for some industries. In addition, there is a wide array of reasons why a card may be denied. When a card is declined, it is by the issuing bank, processor, or the payment gateway.
Types of Card Declines
Hard decline
This happens when the bank doesn’t approve the transaction. Reasons could be related to a maxed-out credit card, data entry error, or fraud. This situation calls for a new payment method; trying to rerun it will yield nothing.
Hard declines typically need the payment card information to be updated regardless of the number of retries attempted.
Soft decline
A soft decline happened when the bank authorized the payment, but the transaction failed elsewhere. Think of it as a relay race rat race if the last person doesn’t complete their leg, the team is disqualified and doesn’t cross the finish line. The steps that occur at each transaction can fail with no fault of the consumer or the issuing bank. Soft declines are usually resolved by trying the traction again. Just remember trying more than three times is not a good practice.
Types of soft declines
Insufficient Funds
This happens when the customer does not have sufficient funds in their account to cover the transaction. This is the most common and most embarrassing for the customer to experience.
Unusual Purchase
Sometimes when a purchase is made out of your home state or doesn’t align with past buying behavior, the banking institution will flag and block the transaction to negate fraud. Then, a quick phone call or visit to the app (if they have one) can verify the purchase or travel notice allowing the customer to continue as usual.
AVS or Billing Address Issue
For card-not-present transactions, online payment gateways require extra validation to prove that the transaction is a legitimate credit or debit card used. Banks will typically block transactions outside of that card’s billing address.
Types of hard declines
Stolen or fraudulent card
The bank will mark a card as stolen or fraudulent, so it will be blocked when a purchase is attempted, whether for in-person sales or online transactions.
Invalid card
Usually, the result of a typo, invalid card declines, concerns about incorrect card numbers, CVV verification numbers, or other card details.
Reasons behind a credit card decline
The user met the credit limit.
If there isn’t enough available credit, the card will be declined.
Large purchases
An account can get flagged for a large purchase. If it seems outside of the customer’s normal spending behavior, it can trigger fraud and freeze the account, which declines the transaction.
Expired Card
An expired card will always end in a failed transaction. This is because the card network cannot process a card that has expired.
Missed payments
If you have a less than stellar credit history and are a few days past due on your bill, any attempted transaction would be declined. Not only does the missed payment hurt your credit score, but it also can prevent you from using the card.
Check the customer’s information.
Sometimes if the numbers were keyed in, they could have been transposed or off just a little. Confirm with the customer that the billing and zip code and the CVV code are correct.
Confirm the card is valid
Check the information on the card to make sure it lines up correctly. We use the same card for years, so it can expire without us even realizing it. If the information is correct, the customer must contact their bank and use an alternative payment method.
Should you try the transaction again?
A declined card will not go through no matter how many times you swipe it. The best solution is to have the customer call the card issuer to find the potential issue. Once that has been resolved, you can rerun the card.
Widen your payment options
Offering multiple payment options such as digital wallets can help expand your customer base.
In a survey conducted by CompareCards.com, one in five American consumers has declined a credit card at least once in the past 12 months. That is more than 40 million people!
Treating customers with discretion and being gentle with the situation regardless of the decline will help customers feel at ease. Approximately 15% of shoppers will go to a different retailer after experiencing a decline, causing merchants to lose out on a sale. By being as respectful and helpful to find a resolution as quickly as possible will help your customers feel that they are in a safe and judgment-free environment.