Just about every webmaster and program owner thinks about consumer declines, and here at CCBill, it’s no different. In fact, we are continually analyzing declines carefully to mitigate risk, minimize chargebacks and reduce instances of refunds. After all, we want our clients to make money and process transactions.
What may come as a surprise, however, is how a declined transaction gets that way in the first place. While it might be fair to say some people believe it’s always the processing company declining transactions, that isn’t necessarily accurate. At CCBill, the majority of consumer declines are initiated by the bank.
Why would a bank decline a transaction? There are a variety of reasons, but the most common we see are that the bank issues a “do not honor” statement, or the payment method selected has insufficient funds.
As for the declines CCBill has control over, our fraud team works continuously to figure out methods to increase transaction throughput while minimizing or reducing the chances of chargebacks. This has resulted in a number of instances where CCBill has reduced its scrubbing criteria throughout clients’ accounts, allowing more sales to go through while still maintaining acceptable risk levels as dictated by banks and the credit card associations.
Of course, we wouldn’t be doing our jobs if we didn’t check for fraud. Leveraging our advanced scrubbing system, Internet-specific fraud checks are run on each transaction that goes through CCBill.
Employing a variety of criteria, transactions are thoroughly scrubbed and checked against our database to ascertain their validity and/or if they appear in our blacklisted accounts. This process is so comprehensive, that if it were to be “relaxed”, all that would happen is banks would decline the transactions.
In our 10 years of experience, a couple of trends we’ve noticed are that international transactions generally have a higher decline rate than domestic transactions, and a given client’s decline ratio will usually improve throughout the day as more domestic consumers get online and make purchases. However, international transactions as a whole are a good thing and businesses shouldn’t shy away from overseas consumers.
So what’s the bottom line? Some transactions will be declined. But by checking each transaction, we are helping clients limit their amount of chargebacks and refunds. This, in turn, enables their business to capture a higher percentage of “good” consumer purchases, keep more sales revenue, and not worry about payouts for refunds or chargebacks.
Nobody likes the thought of consumer declines, but in some cases, they can be the best thing for the business.
Mark Greenspan is vice president of Client Risk for CCBill.
This article originally appeared in the June 2009 issue of AVN Online. To subscribe, visit AVNMediaNetwork.com/subscribe
