How to Let Customers Know Their Credit Card Was Declined

It’s an uncomfortable situation that every business owner finds themselves in at one point or another: A customer tries to pay for your goods or services with a credit card, and the transaction gets declined by the processing company.

This lose-lose scenario can have a permanent effect on the relationship between you and your customer if you handle it improperly. So, how do you let customers know their card was declined? Here are a few suggestions:

1. Use discretion. For many people, having a credit card declined isn’t particularly bothersome; however, having someone publicly call them out for it is. Be discreet when relaying the bad news. You don’t want to lose a customer permanently because you mismanaged the situation.

2. Downplay the problem. The best way to do this is to simply ask, “How else would you like to pay today?” This helps to put the customer at ease while solving the problem efficiently. The more comfortable people feel at your place of business (especially under uncomfortable circumstances), the more likely it is that they’ll return.

3. Skip the details. You probably don’t know why the card was declined — and you definitely shouldn’t speculate. Chances are, the customer already has a good idea why it happened. If customers do ask what the problem is, politely inform them that you don’t have that information, but that their bank or credit card company does. It’s a good idea to try rerunning the card even if the customer doesn’t ask. The problem could easily be a temporary glitch.

4. Don’t meddle. If the customer isn’t alone, a companion may offer to pay the bill. A discussion may ensue — and include some pushback, negotiation, or irritation. Your best move is to remain silent and let the customer make the decisions. Butting in tends to make you the bad guy.

5. Set company policy. You should decide how you and your employees will handle declined transactions before they happen. Will you hold items for the customer? If they’ve already consumed a product (like lunch), do you trust them to go to an ATM and come back? Do you ask for an ID or other collateral before they leave? At what point do you contact authorities or refuse to do business with someone in the future? Having a policy in place today will minimize fallout later.

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