Customer is disappointed after getting her credit card declined

Credit Card Declines: Why It Happens and How You Can Fix It with ReliaBills

While rates vary by industry to some extent; in general, you can expect 10% of your customer’s credit card payments to get declined.  In a card-present or retail setting, credit card declines can be unsettling.  As the merchant, you don’t want to be the bearer of bad news, especially when your customer is standing right in front of you. Certainly, the recipient doesn’t like it either. So how can you fix this matter without it getting awkward for both you and your client? Well, for one, you have ReliaBills.

Fortunately for ReliaBills and our valued clients, most invoicing takes place in a card-not-present transaction. A card decline can cost you a payment that can result in frustration. That’s where ReliaBills comes in and saves the day. But before we get into too much detail, let’s first understand what a card decline is, and why does it happen.

Dealing with Credit Card Declines

Credit card declines can be a challenge for both you and your client. The decline message sent by the card-issuing bank is often intentionally vague or doesn’t make any sense. There are two good reasons for this:

  1. Banks need to protect their customers’ privacy. Quite frankly, as the merchant, it’s none of your business that the cardholder is behind on paying their bill, maxed out on their credit card, or had their card temporarily lost.
  2. If the transactions were made by fraudsters, providing more detail could potentially give them clues on how to find a way around security.

2 Types of Credit Card Declines

Credit card declines are defined by two categories: soft declines and hard declines.

A customer trying to use credit card as payment option to avail services

Soft Declines

A soft decline occurs when the issuing bank successfully identifies the card and cardholder information; however, for any of several reasons, it fails to approve the disbursement of funds. Common reasons for a soft decline to take place are as follows:

  • Insufficient Funds. As the name suggests, there are not enough funds for the transaction to take place.
  • Card Activity Limit Exceeded.  Often, for the protection of the cardholder, banks will limit the number of daily transactions, which is the maximum of a single transaction of the daily aggregate amount of transactions.
  • Do Not Honor. The issuing bank has identified the card and cardholder but is refusing to disburse funds. For the protection of the holder, the bank is withholding useful information.  The reason for the decline comes from one or multiple information provided (name, zip code, expiration date) to be incorrect.
  • Generic Decline.  Similar to “Do Not Honor,” the issuing bank has identified the card and cardholder. However, it’s refusing to disburse funds. Again, for the protection of the cardholder, the bank withholds useful information.

The only good thing about soft declines is that transaction failures are temporary. You can retry your card in one or two days after the decline occurs and hope for valid authorization. Typically, the card association will allow four attempts in 16 days.

Hard Declines

A hard decline occurs once the issuing bank does not approve the payment. This type of card decline is a permanent authorization failure that doesn’t have any retries. Hard declines may be caused by:

  • Expired card. The card has or is about to reach its expiry date. In most cases, banks will issue an entirely new card number as opposed to simply extending the expiration date.
  • Stolen Card. The card’s owner has reported it as stolen, and the bank is preventing any future transactions from going through. If the payment seems to be recurring, decline service to the person who is attempting the transaction and request an updated payment method from them.
  • Closed Account. The cardholder’s bank does recognize the account.  However, the account has been closed.  The reason for the closure is undefined.
  • Transaction Not Permitted. The customer’s bank is declining the transaction for unspecified reasons. In most cases, it’s possibly due to an issue with the card itself. A hard decline occurs when the problem originates with the processor or the issuing bank.

The problem with hard declines is that no matter how many times you retry your card number, it won’t workThe only way to prevent losing the payment is to have the customer fix the problem. It will eventually result in them having to give you a new credit card to avoid a delay.

How ReliaBills Can Get You Paid

The ReliaBills Merchant Services offers Revenue Recovery Tactic as an integrated feature of the software. That means we can get direct access to your customers and their payments. We can create standard and recurring invoices to make sure you get paid no matter the circumstances.

Here are samples of the difference that ReliaBills can do during a card decline:

  • Customer payment information can be securely stored within the platform.  That means we are aware if a card on file is about to expire and can notify you in advance. 
  • Even though you may have a card stored within ReliaBills for auto-pay, we can still send an automated reminder that auto payment will be made in a few days. 
  • If an auto-payment fails due to a soft decline, you will be notified immediately.  Since it’s a soft decline, ReliaBills will automatically retry the card every two days for a total of four attempts. 
  • If an auto-payment fails due to a hard decline, you will be notified immediately. But since it’s a hard decline, ReliaBills cannot make another attempt. Instead, you will be automatically un-enrolled from auto pay and will receive the scheduled payment reminders.

With ReliaBills, you get a brandable payment portal. That way, your customers can self-manage their information. All of this makes ReliaBills a reliable option for small business owners to pay and get paid fast.

We do more than anyone to get you paid.  Visit us at For more information, you can send us your inquiries at Or call our hotline at 1-877-932-4557.

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