Don’t Give Up on Your Customer if Their Payment Card is Declined
Whether we like it or not, business these days revolves around the use of credit or debit accounts and if you’re involved in e-commerce you have to address this situation. It is fairly easy to establish payment procedures using these types of cards for your online business, whether you use PayPal or another authorized reseller such as 2checkout, or you may have your own merchant gateway established. The entire process between presentation of product or service and delivery to the customer requires considerable attention and your business success will depend on your ultimate ability to control the effectiveness of each step.
From time to time, a customer’s card will be declined, but this need not necessarily result in a failed sale. There can be any number of reasons for the decline, including what is known in the industry as a hard decline or a soft decline. In the case of the latter, it invariably means that a system timeout occurred or some other technical issue precluded the transaction from running its course. As a retailer you have to decide when you actually want to process the account, as if you are not physically shipping goods for a specified period, for example, you could just build in a resubmission process, hopefully overcoming the soft decline and not having to contact the customer with notification of failure.
Sometimes you will be notified that the customer needs to contact his or her bank, known as a “referral.” Make sure that the shopping cart contents are retained and that the client can return to consummate the transaction once the referral has been cleared up.
If you find that you are getting a notable number of hard declines, whether the card verification details are incorrect or whether there is a funding issue, consider whether you want to offer alternative methods of payment or not. Tracking sales and conversions through an analytics program will help you to determine the level of the problem as it pertains to your business and whether or not you should really consider alternative methods, if at all possible. Some e-commerce software products support procedures for handling these declines. Either way, you should consider a “so near and yet so far” sale to be very valuable. Just think about how much time, effort and money you have invested in getting the prospect to that point in your sales funnel. At the very least, a communication via e-mail or phone would be in order before you think of abandoning the prospect altogether.
How do you handle declines?
Matthew Toren
I would love to provide goods or services on credit in these type of cases. But if customer doesn’t return then bank does not take any liability. We can not charge card again.
Its a hard one when payments are declined or referred by banks. Its all a matter of trust really if you know the customer then fine for a short time, if you don’t know the customer then its a no no.
Great advice, a declined card isn’t that big a deal, since there are many reason for that to happen.
It’s up to you to offer as many payment options as possible to make the sale easier.
Very nice article. You are right a declined card does not mean a decline sale. The customers will have other mode to pay.
I would love to provide goods or services on credit in these type of cases. But if customer doesn’t return then bank does not take any liability. We can not charge card again.
Don’t credit card companies reward those who are excellent customers who aren’t continuously maxing out their credit cards and who also always pay their monthly payments on time?
Right now I use paypal for my card processing and I have noticed a decent amount of declines, I guess its time to change to another method of accepting cards online :-/
Nice article. You are right a declined card does not mean a decline sale. There are so many method of payments which make the sales easier.