What to Do If Your Client’s Credit Card Has Been Declined

JetPay Communications

February 7, 2019

No matter how high-quality a company’s products or services may be, or how effective its marketing materials are, the problem of declined credit card payments will inevitably arise.

Whether these transactions take place in-person, online or on a recurring basis, declined payments can waste time and money that would be better spent growing your business.

However, there are a few things that companies in every industry can do to mitigate the complications that can occur when credit card transactions don’t go through.

In-Person Transactions

If you encounter a situation in which the customer wishes to pay for something at the point of sale and their card is declined, your course of action is simple. Politely explain the situation to the customer and ask if they have another payment method available. If the customer insists that their card should’ve gone through, recommend that they contact their financial institution. Doing so will put the onus of resolving the declined card situation on the customer and will free up sales staff to continue processing transactions with minimal operational disruption.

Over-The-Phone Sales

If a credit card payment fails to go through during an over-the-phone transaction, your company’s representative should ensure that they have correctly captured the client’s credit card number, expiration date and CVV code.

If their card information is correct but the charge is still declined, the representative should ask the customer if they have another payment method available and suggest that the customer contact their bank. Again, Sales staff should be able to also be focused on processing transactions, not fixing payment errors.

Online Transactions

Ideally, your company’s web store should include a secure online payment solution that will instruct customers how to resolve a declined payment. Utilizing an automated payment solution for online transactions is optimal for both clients and your company’s workforce.

Recurring Payments

Offering recurring payment services is a great way for a business to generate a robust stream of monthly revenue. In fact, companies that offer recurring payment services enjoy 24 percent higher sales than those that do not. However, to keep that stream flowing, merchants must be proactive when dealing with declined recurring credit card payments, Membership Services Inc., 10 percent of monthly subscription charges fail.

Why Credit Card Payments Fail

Understanding the reasons why recurring credit card transactions fail is essential to optimizing profitability. The most common reasons recurring credit card charges are declined include:

  • Client’s credit is near or over their limit
  • Client’s card has expired
  • Client’s card has been reported lost/stolen and is being replaced
  • Client’s card has been replaced with a new EMV card

In each case, merchants can take certain steps to ensure that their payments are collected. When a lack of funds is the problem, retailers can resubmit the charge later in the month.

However, the problem with fixing these types of credit card payment issues is that doing so eats up valuable time. Given the high rate of recurring credit card payment failure, sales staff might spend hours re-processing payments and updating customers’ card information. In order to avoid this time waste, JetPay offers a solution to this problem that optimizes profitability without reducing productivity.

How JetPay Fights Declined Credit Card Charges

As part of our omnichannel payment processing services, JetPay gives its partners the ability to accept recurring payments. On its own, this can be useful because, as mentioned above, recurring payment acceptance can lead to higher retention rates, increased revenue and improved customer satisfaction. But as opposed to other payment processors, our recurring payment services include features that are designed specifically to resolve payment failures.

Our account updater communicated with the card issuer in order to update client credit card information once it has expired or otherwise changed. As such, your company has the opportunity to receive these funds, even after an initial decline.

Another revenue-stabilizing feature JetPay offers is transaction recycling. Once a recurring transaction has been declined, our system will automatically attempt to collect payment again 12 days later. This will reduce the number of “soft declines” that can eat into your company’s monthly revenues without affecting productivity.

By using both account updater and transaction recycline you can reduce the amount of time that your employees spend chasing down payments, while also reduce the amount of failed transactions you receive while doing business.

And as a fully integrated payment processor, JetPay offers an app for credit card processing that makes it easy to monitor your company’s successful, declined and recycled transaction statistics at a glance.

If you want to improve your company’s profitability by reducing credit card decline rates, contact JetPay today.

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