Understanding Credit Card Denials: Codes and Solutions

Encountering rejection from a credit card issuer can seriously hurt online shopping and digital payments businesses. Understanding why these declines happen and knowing how to deal with them effectively is essential for continued success.

When a customer’s online purchase declines, it’s not just a simple ‘no.’ Decline codes, though initially puzzling, serve as a rejection message from the payment provider explaining the specific concern during the authorization process. These codes are like clues, pointing towards potential solutions rather than being impossible obstacles.

Common transaction denials, such as insufficient funds or an expired card, offer insights into the underlying issues. By understanding these codes and taking appropriate actions—like guiding customers to use different payment methods or updating their card information—establishments can minimize the impact of payment rejections. Seeing denials as opportunities to improve customer experience and streamline the payment process is essential for effectively overcoming these challenges.

Understanding Credit Card Decline Codes

Understanding these decline codes is an important signal about the transaction status. They fall into two main groups: soft and hard declines. Soft declines happen when temporary problems like insufficient money or technical glitches occur. Hard declines are usually final because the card being used has expired or there is suspected fraud.

Understanding these payment rejections requires careful attention. For example, Code 51 often means there isn’t enough money in the account to cover the purchase. If you see “Transaction Not Permitted to Cardholder,” it means the card is not allowed to make that specific type of purchase, like buying internationally or from certain stores.

List of Common Credit Card Decline Codes

Card Issuer Rejection: This indicates that the financial institution rejected the payment. The reason may include suspected fraudulent activity, insufficient funds, or other factors.

Here’s a list of common Card Issuer Rejection codes and their meanings:

• Code 05 – Do Not Honor: The card issuer is declining the financial activity for various reasons, such as suspected fraud, security concerns, or the cardholder’s account status.
• Code 14 – Card Number Invalid: The credit card number provided is incorrect or does not match the issuer’s records.
• Code 41 – Lost Card: The card has been reported lost, and the issuer is declining the purchase to prevent unauthorized use.
• Code 43 – Stolen Card: The card has been reported as stolen, and the issuer is declining transactions to prevent fraudulent activity.
• Code 51 – Insufficient Funds: The cardholder’s account balance is insufficient to cover the amount of the transaction.
• Code 54 – Expired Card: The credit card used to make the payment has expired and is no longer valid.
• Code 62 – Restricted Card: The card issuer has restircted the card, such as limiting transactions to certain merchant categories or geographic regions.
• Code 78 – No Account: The account associated with the card number provided does not exist or cannot be located by the issuer.
• Code 80 – Invalid Transaction: The purchase is invalid for reasons such as incorrect card information, transaction type not allowed, or suspicious activity.
• Code 91 – Issuer Unavailable: The card issuer’s system is temporarily unavailable, preventing authorization of the transaction.

SEC Violation: The SEC violation code’s meaning refers to breaking the rules set by the securities regulators, often happening when there’s a problem with security details or if something unusual is noticed during a payment process.

• Decline Code 51: Often related to insufficient funds, this denial signifies that the cardholder does not have enough credit or funds available to cover the transaction.
• Transaction Not Permitted to Cardholder: This indicates that the cardholder’s account or card type is not permitted to make this type of transaction, such as international purchases or certain merchant categories.
• Debit Card Declined Codes: Various decline codes may apply to debit card transactions, each indicating specific issues such as an incorrect PIN, an expired card, or account restrictions.
• Debit Not Available Code 51: Similar to Code 51, this code specifically pertains to debit card transactions and signals insufficient funds or credit available.
• Debit Not Available Code 12: This is another code indicating issues with debit card transactions, often related to the card’s expiration date or account restrictions.
• Debit Not Available Code 05: A transaction denial specific to debit card transactions, indicating issues such as a frozen account or exceeded transaction limits.

Issuer Declined MCC: This code suggests that the payment provider does not permit the merchant category code (MCC) associated with the transaction.

• Auth Declined 200: Authentication for the transaction failed, possibly due to incorrect security details or suspicious activity.
• Declined 82: This code may signify issues related to the card’s expiration date or a temporary hold placed on the card by the issuer.
• Invalid Transaction: This generic code suggests that the transaction could not be processed due to various reasons, such as invalid card details or technical errors.

Note: These are just some examples of Visa and Mastercard decline codes, and specific meanings may vary slightly depending on the payment processor and issuer. It’s essential to refer to the issuer’s documentation for accurate interpretations of rejection codes.

Steps to Resolve Decline Codes

1. Immediate Actions Within the Business

• Act Fast: Quick response to a payment denial can prevent loss of revenue.
• Review Payment Details: Ensure the card information entered is accurate.
• Check Card Validity: Verify if the card has expired.
• Monitor for Suspicious Activities: Look out for any unusual patterns that might suggest fraud.

2. Communicating with Customers

• Notify Customers Promptly: Inform the customer right away if their transaction is rejected.
• Offer Alternatives: Suggest other ways for the customer to make the payment, such as using a different card or payment method.

3. Improving Payment Processing

• Implement Address Verification: Use systems that check if the customer’s address matches the one on file with the credit card.
• Update Billing Procedures: Regularly review and improve how payments are processed to avoid future payment denials.

By taking these steps, businesses can better manage issues with declined transactions, maintain good customer relationships, and reduce the chances of encountering the same problems in the future.

Implementing Effective Business Strategies

Understanding why credit cards get denied can really help a business. When an establishment keeps track of how often and why cards are declined, they can figure out better ways to solve these problems. This means they can have specific answers ready for different types of declined card situations and change how they do things to avoid these issues in the future.

It’s very important for establishments to keep getting better at this. By regularly checking how they take payments and keeping up with new changes in this digital era, they can be better prepared to handle card declines. This helps the business stay on top of things and avoid losing money because of these problems.

Learning from Real Stories

Seeing how others handle problems with denied credit cards can teach us a lot. For example, a business might get a lot of Declined 82 errors and find out they happen because the card has expired or the bank put a temporary block on it. Or, they might get Issuer Declined MCC errors and need to check if they are following the bank’s rules about what kind of business they are.

These stories show how important it is to be ready and know how to solve problems with rejected cards. Understanding how to address these issues quickly means a business can avoid losing sales and keep its customers happy. When customers see that a business can handle payment issues smoothly, they’re more likely to keep shopping there. This trust leads to more sales in the future and a good reputation, which is vital for success in the online world.

Wrapping Up

In short, for businesses working online, it’s really important to understand why credit cards get disapproved. By figuring out what the different decline codes mean, fixing problems right away, and always looking for better ways to do things, businesses can avoid losing money and make their customers happier, even when a payment transaction gets denied. Staying flexible and ready to change is key to doing well in the online world.