It happens to all of us. A customer goes to pay for a transaction and then the POS system or online checkout shows the transaction declined. As frustrating or embarrassing it can be to the customer it’s important to understand the different reasons why a transaction fails.
Funds Not Available
The most common reason why transactions fail is funds aren’t available on the card. This can happen for several reasons, maybe the customer has a maxed-out card, or they may have used an account that has insufficient funds. There are also scenarios where a client may operate with several bank accounts and simply failed to transfer funds over to their account.
If you work out of a brick-and-mortar location and this happens to a customer, it is important you never embarrass the customer in any type of way. You can simply say it looks like your transaction did not complete and this will gently let the customer know that there is something wrong with their card.
Another reason why a payment may have failed could be since the issuing bank may have flagged the charge as fraudulent. In the case that this happens the customer needs to contact their bank and have the card released for future transactions. Most banks might send a quick text or phone call to verify the transaction. Once the bank releases the transaction the customer can proceed with their purchase.
In some cases, a transaction can fail due to system issues such as internet connectivity or system maintenance. You may find this happening often with online transactions, but in some cases, it does happen in brick-and-mortar locations. No one can ever predict when and if these issues arise, but it is important to have a backup internet plan or alternate ways to take payments should a system failure arise.
While we mentioned some of the top reasons why transactions may fail, there are other reasons to consider.
- Missing or incorrect payment information
- Expired debit or credit card
- Merchant Account may have blocked transaction
- Location of where debit or credit card is used
- Type of payment method used
Again, these are just some miscellaneous reasons you might come across for failed transactions.
Failed transactions are never fun, however, having a proper understanding of the Reasons for Failed Transactions can better position you as a business owner when and if you come across this. You can also help your customer find some alternative payment methods.