“The result [of online credit card declines] is consumer aggravation, increased operational costs for banks and credit card companies and as much as $40 billion in lost revenue for online retailers.” via TrustInsight
A Credit Card Decline
One of the primary benefits of selling software through a webstore is that visitors can shop at your store 24/7 without you having to manually operate the cash register for every sale.
Since most of your ecommerce revenue from U.S. customers probably comes from credit card payments, you need to make sure that their payment experience in your checkout process is both efficient and secure. This infographic from TrustInsight, based on a report called Measuring Consumer Attitude on CNP Credit Card Declines, explores the effects of credit card declines on merchants and and their online shoppers.
In a best case scenario, the effects of restrictive order screening is an increase in customer contacts, who consume valuable customer service resources in order to complete a process that should take mere seconds. In a worse case scenario, you’ve lost a customer after they already decided to pay for a product.
A Note About Fraud Prevention
One of the last things you want to report is a rise in refund or chargeback rates, especially if it is due to an increase in fraudulent orders made with stolen credit cards. However, you also don’t want to report a decrease in your order volume because you have been too cautious in the orders you screen.
Part of your fraud prevention strategy is finding the golden mean for declining orders. Too many unwarranted declines and you risk leaving money on the table as well as developing a reputation for providing a poor customer experience. Too few, and you open yourself up to a world of refunds and chargebacks from irate consumers.
Therefore, one of your more important assets is a knowledgeable fraud prevention team empowered to look at any transaction and make the most effective decision regarding its security.