Optimizing Credit Card Processing/Combating Credit Card Declines

Our company processes our smaller clients (less than $4000 per year)on an auto-pay by credit card platform. We are moving towards an auto-pay by ACH since it will be significantly less expensive. We go through the normal paperwork to set up the account and obtain all card info (name, address, cvv, signature, etc). With the data protections in place for this information at PayPal or any other merchant processor, we are often in doubt as to why someone's card has declined. I have never used a consulting firm to assist with these types of collections, because I think there are ways to manage more efficiently in house.

Our decline percentage ranges up to 8%. Since most of these clients represent our mom and pop smaller volume sales, I don't think this is unusual. To keep our declines lower we have instituted some practices which go a long way towards educating our clients and having them help us when there is a change.

A) We keep a spreadsheet (data encrypted) with the expiration dates and reach out in advance to get updated info before we get to the decline step. "Dear client, it looks like you'll be getting a new card soon. Please fill out the attached form and return to us so you won't have any system issues."

B) When someone's card declines we automatically suspend their account and send them a note with a new authorization form to update their info. This step is key because it raises the level of participation greatly when someone can't order more until they have taken care of their account.

C) Our repeat offenders - clients who have more than the usual turnover, several fraud card changes in a year, or some other recurring reason they have to get you new information, delay payment for services, and continue to order in the meantime - will be our newest ACH clients and/or deposit in advance clients.

Our goal is to decrease the number of declines through educating our clients that we are important enough to remember when a card changes. Since they are lower volume revenue to us we also have to touch them less and it helps us on our margin. Most of our clients understand/appreciate when we let them know that we are not given a reason for the decline. It saves them the embarrassment of thinking we do not know when they don't have enough credit in the account when this issue comes up.

If you let your clients input their CC info into the system directly, then at least make sure you can get a listing of expiration dates so you can prompt them to update their info at the right time.