Contrary to popular belief, insufficient funds is not the most common reason for a credit card to decline. In fact, there are a plethora of credit card decline codes that occur more frequently. To relieve the awkwardness that ensues after stating “Sorry, your credit card was declined,” we’re identifying the most common credit card decline codes and how to solve them to alleviate tension at checkout.
4 Credit Card Decline Codes to Know
- “05 Do Not Honor” is a general decline typically generated by the card’s issuing bank. Your Merchant Account Provider cannot override the decline; only your customer’s bank can allow the transaction. The solution? Have your customer call the number on the back of the credit card to discuss the transaction.
- AVS decline codes occur when the Address Verification System (AVS) cannot match the address provided with the one registered. Unfortunately AVS declines often occur due to the card issuing bank failing to update AVS when a customer updates her address. Banks will update the mailing address for statements but may fail to update the address for AVS as well.
These declines are specific to your provider and vary depending on your security settings. You may get a decline due to no match on the address, zip code or both. Sometimes AVS declines occur because the system is not working, is unavailable or is not supported.
If you trust your customer, you can override the decline and force the transaction, which will result in a more expensive transaction cost. However, if it’s a new customer we recommend you take steps to verify the purchase isn’t fraudulent.
- “97 CVV Mismatch” occurs when the Card Verification Value (CVV) entered does not match the CVV number on the card. When keying-in transactions through Virtual Terminals, CVV verifies the customer has the physical card; it’s a fraud-prevention measure. If you’re taking a phone or online order and get a CVV mismatch, it may be a fraudster attempting to make the purchase.
- “62 Restricted SIC” declines occur when the card’s issuing bank deems the business unsuitable for the type of card. Every business has a specific Merchant Category Code (MCC) for easy identification. Certain card types, such as a HSA medical credit card, can only be used at a medical office. If a customer tries to use a card that cannot be accepted by a business with your MCC code, the transaction will decline.
This decline code also may occur because you’ve been assigned a generic MCC code of 7299, which is sometimes blocked by card-issuing banks. The best way to resolve the decline is to call your provider to confirm your MCC has been properly assigned and then vet the card type your customer is using.
Delivering the news that your customer’s card has been declined is a delicate dance, but it doesn’t have to be! You can flawlessly resolve declines if you know what these common credit card decline codes mean and why they occur. Keep these four common credit card decline codes in mind so the next time you hear the dreaded ‘beep, beep, beep’ on your terminal, you can confidently deliver the news and offer a solution to your customer.
Accept ACH payments?
Have you struggled to keep tensions low at checkout when a transaction declines? What tactics have you implemented to keep customer satisfaction high at checkout? We'd love to hear from you!