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Everything You Need To Know About Recovering Failed Payments

Did you know that 10-15% of all recurring payments fail?

What’s worse, studies show up to 50% can be lost due to involuntary churn, or subscriber retention. In effect, companies will notice the lost revenue, wasted staff time, and decreased subscriber retention. When a business works hard for each subscriber, why lose even one due to a failed payment? The good news is businesses can recover 70-80% of failed payments! By recovering failed payments seamlessly, business owners build trust with their subscribers and increase their average subscriber lifetime value.

Reasons for Failed Payments

There are a variety of reasons payments fail but these are the most common:

  1. Non-Sufficient Funds or Overlimit
  2. Expired Card
  3. Fraud
  4. Lost/Stolen Card

Knowing the reason for a failed payment helps your business handle the declines accurately. You
wouldn’t want to e-mail or call a subscriber saying their payment declined when it was reported
stolen; it’s insensitive and can cause the subscriber embarrassment. Instead, you can have the
correct information right away to effectively communicate with your subscriber and continue to
build trust.

Failed Payment Recovery

Did you know about one third of subscribers will need to update their credit card information each
year due to changes such as an expiration date?

Prevention is the first step and key to avoiding failed payments. Account Updater is a service
you can implement to avoid failed payments before they happen. Account Updater provides
proactive updates on cards that are lost, stolen, expired, or invalid card information.
Account Updater will ensure each subscriber’s card information is kept up to date.

The most common reason for recurring payments to decline is NSF or over-limit. This means the
funds just weren’t available when the subscribers dues were run. Sure, you can stick to e-mails
and phone calls trying to recover the subscriber payments, but it’s just not efficient. Having an
expert in failed payments ensures you won’t lose a subscriber, your staff can focus on core
business, and the best part of being an expert is they know the best way to handle a failed
payment. Pick a company to partner with that can demonstrate years of data and algorithms to
guarantee the highest recovery rate.

Recovering failed payments can happen all behind the scenes without the member even knowing
there was a potential issue. The member and staff don’t have to have an awkward and
embarrassing conversation. Instead, their payment goes through, and the business keeps themember.

Studies show when you call or e-mail a member to address a failed payment, it can end
in a cancellation.

Recovering failed payments can be a full-time job, and at best, you achieve a 70% success rate.
Hiring a company in the field can result in at least an additional 10% recovery rate. Membership
retention is something every business should focus on; losing a monthly payment can sting a
little but projecting the loss of that one subscriber for the months to come can compound over
time.

Don’t lose your subscribers due to a payment issue. Increase your revenue by ensuring subscriber card data is up to date and keep your cash flowing. Cashi specializes in reducing
the risk of losing even one subscriber.

Stay Woke: 4 Steps To Avoid Losing A Customer Due to A Failed Payment

A thriving subscription box company means constantly acquiring more customers, right?

Not so fast. While attaining new subscribers is great for your bottom line, the key to sustained and increased revenue lies in keeping your existing subscribers on board. We’ve crunched the numbers. Acquiring a new subscriber can cost four times more than retaining an existing subscriber.

So, how do you keep your subscribers? Payment issues are the leading cause for subscribers jumping ship. Here are four steps to combat failed payments and avoid involuntary churn.

Step 1: Determine Why The Payment Failed

A payment could fail for a myriad of reasons. For example, the account closed, there are insufficient funds, it’s over the limit, the card is expired, invalid, or restricted, etc. Determining the reason is important for how you will handle that specific subscriber moving forward.

Step 2: Payment Rescue Mission

Depending on what is uncovered as the culprit, you then have the intelligence to build a rescue mission to solve the problem. Whether that’s EFT collections or updating card information, you now have the information needed to fix the issue and prevent it from happening in the future.

Step 3: Catch Your Cash

Now that you have a plan of attack, this is where some people make the mistake of reaching out to the customer, which can trigger cancellation of service. Reduce your risk of losing a customer by updating the information without involving them. Even better, implement updates automatically to ensure customer data stays up to date to avoid declined payments in the first place. In addition, flexible payment schedules allow you to set the billing cycle around each customers’ lifestyle to ensure the funds are ready and available when it’s time to process the authorized transaction.

Step 4: Increase Average Customer Lifetime = Subscribers Like Woah

Preventing a failed payment allows you to increase subscriber retention by keeping disruptions at bay for you and your customer. Another key component of retaining subscribers is by regularly engaging with them at the right time. Cashi’s web-based service gives you the tools to stay connected with your subscribers faster and easier with the click of a button via phone, text, or email. Take your pick!

Don’t lose your customers due to a payment issue. Increase your revenue by ensuring subscriber card data is up to date and keep your cash flowing.

Cashi specializes in reducing the risk of you losing a customer. Visit cashicash.com to schedule a free demo and learn more about integrating Cashi’s software with your subscription company!

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