Don’t Give Up on Your Customer if Their Payment Card is Declined

credit cardsWhether 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

Matthew Toren

Matthew Toren is a serial entrepreneur, mentor, investor and co-founder of YoungEntrepreneur.com. He is co-author, with his brother Adam, of Kidpreneurs.org, BizWarriors.com and Small Business, BIG Vision: Lessons on How to Dominate Your Market from Self-Made Entrepreneurs Who Did it Right (Wiley).

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