Why Credit Card Charges Fail
There are a number of reasons credit card charges are not successful. Here is a summary of areas where the most common failures occur:
Credit card charges can fail for several reasons which are specific to the customer. These include: - --
- The credit card is expired or over its limit
- Incorrect billing address or zip code was provided for the transaction
- A fraud alert is set on their card which blocks automated transactions
- The issuing bank blocks the transactions based on a set of circumstances such as use outside of the card holder's home country
Blocking by Payment Gateway
Your payment gateway has many settings that allow or block transactions in different circumstances. For instance, your gateway account has settings which dictate how to react if there is a billing address mismatch with your customer’s credit card, if the customer’s card-issuing bank does not support address verification, if their card bank is outside the USA, or if the card bank is simply in a different country than your business, etc.
These settings inside your gateway account are meant to protect you from fraudulent charges. You will need to log into your payment gateway website and adjust these settings as you learn your customer profile and behavior. You may need to “loosen” the settings to let more customers in, but keep in mind that the more you loosen these settings, the easier it will be for someone to do a fraudulent transaction. It’s a balance between making it easy for your customers, yet stopping fraudulent transactions.
Blocking by Merchant Account
This is less common, but your merchant account may be denying the transaction or may not be set up to accept the transaction. For example, your merchant account may impose a total monthly charge limit if you are a new business or your merchant account is new. Or if you did not specifically request it, most merchant accounts are not set up to process American Express charges, even if your payment gateway is okay with AmEx.
Payment Gateway Misconfiguration in Chargify
Your payment gateway may be working fine itself, but the username & password that you configured in Chargify may be incorrect. See the links below for more detailed documents on this.
See this Gateway Troubleshooting Guide for ideas you can test.
What You Can Do When a Customer’s Card is Declined?
When a customer’s card is declined the best course of action to take is to have the customer call the card issuing bank (their number should be on the back of the credit card) and inform them that their card is being declined for a transaction they would like to approve.
The card representative should have a list of declined transactions listed by charge amount and merchant name. This will be your company name (not “Chargify”), and is the identifying name you provided to your merchant processor. This is the name that would show up on the customer’s credit card statement after a charge from your organization.
The representative should then be able to allow charges from your organization for that customer, at which point the customer can attempt to purchase again.
Failed Payment Retries
Chargify will attempt to retry your customer’s credit card based on your dunning settings if we receive a response from your payment gateway indicating that the transaction has failed. If the card cannot be successfully charged, the subscription status will change to Canceled or Unpaid, depending on the subscription's settings. At this point, Chargify will stop attempting to collect payment on your behalf.
Visa states that a Preauthorization Transaction that receives one of the following Decline Responses may be resubmitted for Authorization, in an attempt to receive approval, up to 4 times within 16 calendar days from the date of the original Decline Response:
- Response Code - Authorisation Declined
- Response Code - Insufficient Funds
- Response Code - Exceeds approval amount limit
- Response Code - Exceeds withdrawal frequency limit
Chargify does not currently support ‘Preauthorized Transactions’, so this section would not apply to us or our merchants. However, Chargify must adhere to the rules governing ‘Resubmitting Transactions’: According to Visa, a transaction must not be resubmitted for Authorization if the transaction receives a Pickup Response or, one of the following Decline Responses:
- Response Code - Expired card
- Response Code - Invalid account number (no such number)
- Response Code - Transaction not permitted
If your merchant bank contacts you regarding these rules, you can be confident you adhere to the Visa rules
If you have any questions or concerns, please feel free to contact firstname.lastname@example.org