Software or Human Touch? The Best Way to Fix Credit Card Failures

Did you know that for years the decline rate on credit cards and debit cards has remained virtually unchanged? There is rarely any variation, and if there is, it is usually within a 3% window. The current stats show that credit cards are going to decline around 7.5% of the time, while debit card will decline right at 13% of the time. If you average these together you get a very consistent decline rate of around 10%.

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The truth is that most credit card and debit card transactions are successful. 90% of the time the payment goes through, and that’s good news for all us. But what about the other 10%? Here’s what we know. As long as your looking at credit card declines as a percentage number it’s not so bad. But when you attach a dollar sign to that number, all of a sudden it becomes a much bigger deal.

If you own a SaaS business, or an information business, or any subscription based business that receives most or all of its payments from credit cards, then you can rest assured that you are more than likely experiencing a 10% decline rate on all credit card payments. It has nothing to do with you, your product, your service, or your company. A 10% decline rate on credit cards is simply a universal rule. We all experience this and it happens for a variety of reasons. Expired cards, insufficient funds, stolen cards, lost cards, the list goes on. So here’s my question: How much money is that costing you and your business? If you’re not sure, you need to be. My guess is that you probably already know, and seeing that amount of revenue walk out the back door of your business is not something you enjoy seeing. The great news is that there are steps you can take to recover this lost revenue.

The first step is purchasing some kind of dunning software.

There are lots of great options out there. Recurly, Stunning, Churn Buster are just a few of the options that you could choose. These software programs will help you create an automated email sequence that will touch base with your customer as soon as their credit card payment fails. These programs are great for helping you see how much is failing each month and actually repairing some of the most basic transaction failures. All told, you can expect to recover about 15% of your failed revenue with these programs. This is a great first step, but it should only be a first step. What do you do about the other 85% of your lost revenue that is walking out the back door?

Your next step should be human touch.

Software is great, but it’s no substitute for human touch. Your customers will respond much better if they know they are actually talking to a person. Additionally, a person can actually help to solve the problem of their payment failure if there is a legitimate reason for the failed payment. Software just can not do that. 85% of dunning emails go unread. But the click through rate on emails that have been personalized and optimized by an actual person are much higher!

We have cracked the code.

At Gravy we start where software stops. Recovering 12-15% of your credit card declines through software is a great first step, but we consistently average over a 50% recovery rate for our customers with several seeing recovery rates as high as 70-80%! We’ve cracked this code. We know how to do this. Our team is 100% human powered, and we are 100% based in the U.S. We treat your customers with dignity, and the same amount of care that is consistent with your brand. We know that fear tactics and trying to scare people is not the way to recover failed payments. Collection agencies have been doing this for years and it simply does not work. But having a team of people dedicated to recovering your credit card declines with prompt and respectful interaction with your customers is a winning formula, guaranteed!

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