Issuer declines

Card issuers rely on automated systems and models to decide whether to approve or decline a payment request. When a payment is declined, the subscription platform like Stripe, Recharge or Chargebee relays the reason provided by the issuer. Sometimes, issuers include a specific decline code explaining the cause. However, many declines fall under general categories, most commonly labeled as do_not_honor. For privacy and security reasons, issuers can only share detailed information with their cardholders.

When processing payments, you may occasionally encounter declined transactions. Understanding why these declines occur and how to handle them effectively is crucial for maintaining a smooth payment experience for your customers. This guide explains the most common reasons for issuer declines and provides actionable strategies to address them.

How Card Issuer Declines Work

Card issuers rely on sophisticated automated systems and proprietary models to evaluate every payment request submitted through FlyCode. When an issuer declines a transaction, FlyCode receives and shares the reason provided by the issuing bank. While some declines come with specific decline codes that explain the issue, many fall into generic categories that offer limited detail.

The Five Most Common Decline Reasons

Understanding the primary reasons for payment declines helps you respond appropriately and improve your payment success rates. Here are the most frequent scenarios FlyCode merchants encounter:

1. Generic Declines: "Do Not Honor" and Similar Responses

What it means: The issuer has chosen not to provide a specific reason for declining the transaction. This catch-all category can stem from various factors in the issuer's risk assessment that they prefer not to disclose.

How to respond: Since the specific issue is unclear, your best approach is multi-faceted. First, prompt your customer to contact their card issuer directly for more information about why the payment was declined. Second, suggest they try a different payment method if available. Finally, consider retrying the same payment method after some time has passed, as temporary issues may have resolved.

2. Incorrect Card Information

What it means: The customer has entered card details that are either incorrect or no longer valid. This might include a wrong card number, an incorrect CVV/CVC code, or an expired expiration date that hasn't been updated.

How to respond: Make sure you've enabled automatic card updates through FlyCode to minimize outdated card information. When declines occur, reach out to your customer through multiple channels, email, text message, or in-app notifications work well. Ask them to re-enter their payment details. If problems persist after they've verified their information, they should contact their card issuer. As a fallback, encourage them to use a different payment method.

3. Insufficient Funds

What it means: At the time of authorization, the customer's account doesn't have enough available funds to cover the payment amount. This is a straightforward liquidity issue rather than a security or validity concern.

How to respond: Handle this situation delicately to avoid embarrassing your customer. Use FlyCode to recover the payment.

4. Lost or Stolen Card

What it means: The cardholder has reported their card as lost or stolen to their issuing bank, which has flagged the card for security purposes.

How to respond: This is a security-related decline, and retries will not succeed. The customer must contact their card issuer to resolve the situation or obtain a replacement card. Importantly, do not report the specific "lost or stolen" reason to the person attempting the purchase, as the legitimate cardholder may not be the one trying to make the transaction. Simply indicate that the card was declined and they should contact their issuer.

5. Transaction Not Allowed

What it means: The issuer has declined the payment for reasons related to the card's usage restrictions or the specific type of transaction. For example, certain merchant category codes might not be permitted on the card, such as using an FSA (Flexible Spending Account) card for items that aren't healthcare-eligible.

How to respond: The customer needs to contact their card issuer to understand the specific restrictions on their card. Retries are unlikely to succeed until they've resolved the issue with their issuer. In the meantime, offer alternative payment methods. If you notice patterns of these declines for specific product categories, consider whether your merchant category code is appropriately set up in FlyCode.

Best Practices for Managing Declines in FlyCode

To optimize your payment acceptance rates and provide the best customer experience, consider implementing these strategies:

Enable Smart Retry Logic: Work with FlyCode's retry features to automatically attempt failed payments at optimal times, particularly for insufficient funds scenarios.

Keep Card Data Current: Activate automatic card update services through FlyCode to ensure you're always attempting charges against valid, current card information.

Communicate Proactively: When declines occur, reach out quickly through multiple channels with clear, helpful instructions rather than generic error messages.

Offer Payment Method Diversity: The more payment options you provide through FlyCode, the less likely a single decline will result in a lost sale or churned subscriber.

Monitor Decline Patterns: Use FlyCode's analytics to identify trends in your decline reasons. Patterns might reveal opportunities for optimization in your checkout flow or payment timing.

Conclusion

Payment declines are an unavoidable aspect of processing transactions, but understanding their causes empowers you to respond effectively. By recognizing the common decline reasons FlyCode reports and implementing appropriate responses for each scenario, you can minimize friction for your customers, recover potentially lost revenue, and maintain healthy payment success rates.

Remember that FlyCode serves as the messenger for issuer decisions—we provide you with all available information from the card issuer to help you support your customers effectively. When in doubt, directing customers to their card issuer for specific details remains the most reliable path to resolution.