Credit Card Decline Codes: A Comprehensive Guide to Understanding and Resolving Errors

Credit card decline code is a critical tool for both merchants and customers, providing insights into why transactions fail and guiding next steps. This guide will cover how decline codes work, common reasons for declines, Swipesum’s role in helping merchants address these issues, and best practices for managing and preventing declines.

What Are Credit Card Decline Codes?

A decline code is a two-digit alphanumeric code indicating why a transaction has been rejected. These codes can originate from the card-issuing bank, payment processor, or card network and offer clues to help resolve issues, completing transactions smoothly and securely.

Why Decline Codes Matter
Understanding decline codes enables merchants to quickly address transaction issues, minimize sales disruptions, and potentially retain customers by providing alternative solutions.

Types of Card Declines

Different factors trigger card declines, with common reasons including:

1. Insufficient Funds or Credit: Often the leading reason for declines, insufficient funds trigger codes like 51, signaling the cardholder has surpassed their available balance or credit limit. Insufficient funds in the customer's bank account can lead to a decline, specifically mentioning decline code 51. Additionally, insufficient funds in the customer's savings account linked to their debit card can also lead to a decline.
2. Incorrect Data Entry: Online purchases often fail due to incorrect card details (e.g., number, CVV, expiration), leading to declines. Incorrect data entry can also affect the customer's credit card, leading to a decline.
3. Fraud Prevention: Unusual activity or large purchases may lead to declines for security reasons, requiring the cardholder to confirm the transaction.
4. Card Issues: Declines can result from damaged chips, unactivated or expired cards, and network incompatibility issues.

Common Decline Code Triggers

Several codes commonly appear due to specific triggers:

Code 51

(Insufficient Funds): Declined due to insufficient funds or credit.

Code 46

(Account Closed or Needs Validation): Account may be closed or require further verification.

CVV Declines‍

Rejection due to incorrect or mismatched security code.

Error codes can indicate specific reasons for transaction declines and may vary by payment processor.

Understanding Decline Codes

Decline codes are an essential part of the payment processing system, providing valuable information about why a transaction was declined. For merchants, understanding these codes is crucial as it helps identify the root cause of the issue and take corrective action to resolve the problem.

A decline code is a two-digit alphanumeric code that indicates why a transaction was declined. These codes are typically provided by the payment processor or the card issuer and can be used to pinpoint the specific reason for the decline. Decline codes can be categorized into several types, including:

• Insufficient Funds: This decline code indicates that the customer’s bank account or credit card does not have sufficient funds to cover the transaction. For example, Code 51 signifies that the cardholder has surpassed their available balance or credit limit.
• Exceeded Credit Limit: This decline code indicates that the customer’s credit card has exceeded its credit limit, and the transaction cannot be processed. This often requires the cardholder to either pay down their balance or contact their bank to request a credit limit increase.
• Invalid Card Information: This decline code indicates that the card information provided by the customer is invalid or incorrect. Common errors include incorrect card number, CVV, or expiration date.
• Card Issuer Decline: This decline code indicates that the card issuer has declined the transaction for a specific reason, such as suspicious activity, a blocked card, or an unactivated card.

By understanding decline codes, merchants can take proactive steps to resolve the issue and prevent future declines. For instance, if a decline code indicates that a customer’s credit card has exceeded its credit limit, the merchant can offer alternative payment options or suggest that the customer contact their bank to increase their credit limit. This not only helps in completing the transaction but also enhances customer satisfaction by providing a seamless payment experience.

Help and Support with Credit Card Decline Codes

Swipesum provides top-tier support for merchants facing transaction declines, known for award-winning customer service and consultation offerings. By analyzing decline codes and assisting with management tools, Swipesum helps businesses identify reasons for rejections, take corrective steps, and ultimately reduce declines. Merchants can book a consultation with Swipesum for personalized guidance on managing payment declines.

Payment Processor’s Role in Decline Codes

Payment processors play a key role in decline management by:

• Issuing specific codes and explanations for declines.
• Providing guidance on avoiding future declines.
• Offering tools and advice to streamline transaction handling.

By helping merchants understand and act on these codes, processors support smoother payment processes and better customer experiences.

Resolving Decline Codes

Addressing a declined transaction often requires simple actions:

• Alternate Payment Methods: Ask customers to use another card or payment method if the current one is declined.
• Direct Contact with Issuer: Cardholders should call their bank to clarify and resolve issues. Sometimes the decline code indicates there is no such issuer for the card being used.
• Avoiding Retrying: Avoid multiple reattempts, especially with Code 51, to prevent overdraft fees or chargebacks.

Most customers carry multiple payment options, so advising them to switch methods can usually complete the transaction.

Reducing Credit Card Decline Rates

To proactively manage declines, merchants can:

1. Support Multiple Payment Options: Offering alternatives like digital wallets or ACH transfers increases the chance of completing sales.
2. Automate Account Updates: Use technology to keep customer payment information current.
3. Communicate with Customers: Engage customers about potential issues and steps to resolve them.
4. Leverage Decline Code Management Tools: Tools can provide insights into frequent decline reasons, helping merchants optimize payment processes and minimize declines.

Decline Code Management Tools

Decline code management tools track, categorize, and analyze decline patterns, helping businesses:

• Identify Common Issues: Understanding recurring decline reasons can guide corrective measures.
• Optimize Payment Processes: Insights from these tools can streamline payment systems, improving approval rates.
• Enhance Customer Service: By anticipating and addressing decline causes, merchants create a smoother customer experience.

Merchant Best Practices

As a merchant, having a solid understanding of decline codes and how to handle them is essential for maintaining smooth payment processes and ensuring customer satisfaction. Here are some best practices to help you navigate the world of decline codes:

• Monitor Decline Codes: Keep track of decline codes to identify patterns and trends. This can help you pinpoint potential issues with your payment processing system or customer behavior. Regular monitoring allows you to address recurring problems promptly.
• Communicate with Customers: If a transaction is declined, communicate with the customer to explain the reason for the decline and offer alternative payment options. Clear communication can help retain customers and prevent frustration.
• Verify Card Information: Ensure that card information is accurate and up-to-date to prevent declines due to invalid card information. Encourage customers to double-check their details before submitting a transaction.
• Offer Alternative Payment Options: Provide customers with alternative payment options, such as digital wallets or bank transfers, to reduce the risk of declines. Offering multiple payment methods increases the likelihood of completing the sale.
• Work with Your Payment Processor: Collaborate with your payment processor to resolve decline code issues and improve your payment processing system. Payment processors can provide valuable insights and tools to help you manage declines more effectively.

By following these best practices, merchants can reduce the risk of declines, improve customer satisfaction, and increase revenue. Remember, understanding decline codes is key to resolving issues and providing a seamless payment experience for your customers.

Best Practices for Decline Code Management

To maximize transaction success, merchants should adopt best practices like:

• Preventing Data Entry Errors: Encourage careful data entry, especially CVV and zip codes. Online transactions are particularly prone to errors, which can lead to declines.
• Using Technology: Automate account updates and track declines with management tools.
• Offering Payment Flexibility: Support multiple methods to increase the chances of successful transactions.

Comprehensive List of Common Credit Card Decline Codes

Here’s a complete list of frequently encountered credit card decline codes with explanations:

1. 00 – Approved: Transaction successfully processed.
2. 01 – Refer to Issuer: Cardholder should contact the bank.
3. 05 – Do Not Honor: Decline for unspecified reasons; cardholder contacts the bank.
4. 12 – Invalid Transaction: Incorrect setup; retry or use another payment.
5. 14 – Invalid Card Number: Incorrect number; verify and re-enter.
6. 41 – Lost Card: Reported lost; retain and contact the issuer.
7. 43 – Stolen Card: Reported stolen; retain card and advise customer to contact the bank.
8. 51 – Insufficient Funds: Exceeded balance or credit; request another form of payment.
9. 54 – Expired Card: Request a different payment method.
10. 57 – Transaction Not Permitted: Restricted purchase; customer contacts the bank.
11. 61 – Exceeds Withdrawal Limit: Withdrawal limit exceeded.
12. 62 – Invalid Service Code: Not allowed for this business type.
13. 65 – Activity Limit Exceeded: Daily transaction limit exceeded; try later or use another card.
14. 91 – Issuer Unavailable: Temporary issue; retry later.
15. 96 – System Malfunction: System issue; contact the bank.

For more codes, including Mastercard and Visa specific codes, consult your payment processor’s resources or Fiserv’s documentation.

Conclusion

Mastering credit card decline codes is crucial for businesses to complete transactions smoothly. By understanding and managing these codes, merchants can identify patterns, reduce decline rates, and maintain a frictionless payment experience for their customers. Following best practices and using decline management tools like those offered by Swipesum can optimize payment processes and support business growth.