Five Useful Decline Definitions To Empower Your Retries

There are dozens of different decline codes you receive back from your payment gateway when a transaction is not approved or requires additional action. Here, we’ll focus on defining the five most common decline codes that present an opportunity for you to prevent churn and maximize profit by taking further action. We’ll also provide detailed instructions with the decline definitions so that you’re equipped with a data-driven strategy to increase your approval rates.

Insufficient funds (NSF)

What it means

The balance available on the card is less than the amount you are trying to charge to it.

What to do

Your best strategy will vary based on the type of card you are processing.

• For debit cards, the best strategy is to try to hit it on payday. Debit cards are typically limited by the amount of cash available in the account, plus a small overdraft limit. This cash is often depleted in between pay cycles, and replenished again on payday — so by figuring out when the cardholder gets paid, you maximize your chance of rebilling success.
• For credit cards, where the available balance is impacted by recent payments, the best strategy is to rebill on the cardholders’ payment “due date” — right after they’ve paid down a bit of the balance and made room for your transaction.
• Reloadable pre-paid cards are very similar to debit cards. Funds are typically replenished on or around payday.
• For non-reloadable prepaid cards, your best bet is to collect a partial payment, and ask the customer for an alternate payment method to cover the balance. We suggest using automated, low-effort ways to do this to prevent cancellations and chargebacks.

Do Not Honor

What it means

“Do Not Honor” can mean just about anything. In some regions, card issuers use this code when they aren’t allowed to disclose that funds are insufficient, due to privacy regulations. In other cases, the card issuer may be unwilling to complete the transaction due to a heightened risk profile.

What to do

Follow the same strategy outlined above, for Insufficient Funds.

Expired Card

What it means

The card is no longer valid, since it has passed it’s expiration date. More than likely, a new card has been issued with a new account number and / or expiration date.

What to do

We actually wrote a whole blog post devoted to this topic! You can find it here. In short, we’d recommend preventative strategies for expired cards, including:

• Using Account Updater services if they are offered by your issuer.
• Asking your customers for their new number before the old one expires.

While preventative strategies are recommended, they are not 100% effective. In any recurring billing business, you will end up with expired cards. After a card has officially expired, we recommend:

• Guessing the new expiration date.

Seriously. It sounds crazy, but it’s not — and it works. With the exception of massive card reissuances like the EMV chip card rollout in the United States, it’s a legitimate, moderately successful approach. Here’s how to do it.

• First, try the card again by submitting an authorization request without any card expiration date. Most gateways will reject it, but a few won’t.
• Next, try the card again with an expiration date that is exactly three years later than the date you originally had on file.
• If that doesn’t work, try four years.
• Finally, if that doesn’t work, try just two years.

Restricted Card

What it means

“Restricted Card” typically means the issuer is blocking transactions between their customers and merchants in your country.

What to do

First, try the card again – but wait 13 days. Occasionally, this message is erroneous, since many issuers use really old technology. If there was a wholesale problem at the issuer, 13 days is usually enough time for them to identify and fix it.

If you get this error often, and it’s costing you a lot of lost business, you may want to consider opening a subsidiary or related branch in the country that is restricting transactions with you, and open a merchant account in that country to process the payments. It requires effort and expense, but many businesses have found it profitable.

Lost Card, Stolen Card, Pickup Card, or Hot Card

What it means

Each of these terms typically means the card you are attempting to process was either lost or stolen.

What to do

What you don’t know if whether your customer was the victim or the thief. Either way, it doesn’t make sense to try to charge the card again.

If your customer was the victim, Account Updater services can help for certain issuers. Otherwise, this is one instance where you’ll need to engage with your customer to update your records.

Using data like decline codes to help drive your retry strategy will pay huge dividends when it comes to your approval rates and customer lifetime value. The information is there, and we’re here to help you understand it and enact a plan that works best for you and your subscription billing.

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