Credit card decline! Those are words that any business owner hates to hear, but it happens to all of us. When you get a credit card decline for your services here are some tips to quickly resolve the problem.
Be Nice – Always
I have found that sometimes a credit card decline is due to a security issue. Maybe the card was lost or compromised and the customer did not remember to advise you. Be open to the fact that it may be a very simple issue to resolve.
I always send a nice positive note with a request for a new card for my services. Typically if you hear back from the client within a day it is typically something that will be quickly resolved.
Deal with the Problems – Quickly
It is the clients that will not return a note or phone call that typically has run into a cash flow issue. For my firm, we stop services when we do not get a response, as the debt can grow quickly and end up as a write off. You have the most leverage to resolve a problem when an issue is handled quickly.
Make sure that if you have a contract that you cover what happens when a client does not pay. I have learned from experience that if you continue services on a payment promise that your write off will typically end up much bigger.
Change Terms – For Problem Payers
In our agreement for services, we spell out what happens when a client has a credit card decline, resolves, it and continues buying. We move clients like this to a prepayment basis or retainer. Some services we provide are not impacted significantly with a delay in payment, but other services are hugely impacted. Know your own needs and cover the situations in your agreement that all clients must sign to start your services.
Is It Worth It?
In some cases when you receive multiple declines, and it is clear that there is a cash flow problem, you must take time to evaluate if you would like to continue to work with a client. Each business situation is different. Just know that trying to collect on a debt is very, very difficult. Suing is not a realistic option and using a debt collector will cost a percentage of the debt and may never be collectible.
We all hate to lose a client, but a poor paying or non-paying client is typically more trouble than it is worth in the long run.
