How to Avoid Failed Payments 101

how to avoid failed paymentsUnfortunately, failed payments are something that all business owners and managers may have to deal with once in a while. Failed payments deprive your members of accessing your club and your business of income, as well as taking up administration time in follow ups. It is best to be proactive and do everything you can to avoid failed payments in the first place.

 

Looking for tips on how to avoid failed payments in your business and collect the income that you earned?

 

Step 1: Be clear in the sales process

The key on how to avoid failed payments is to ensure that your customer’s payment method is liable right from the very start.

Step 1. Ask for the payment method in order of your clubs preference, e.g. “Do you have a credit card we can use to make the membership payment each month?”

  • “Yes” – proceed to Step 2A (credit card) or Step 2B (debit card)
  • “I do, but I’d prefer not to use it” – outline that payment via card is the easiest and safest payment method as other methods are prone to failure.
  • “No, I don’t have one” – discuss the other options in order of your clubs preference.

STEP 2A: Collecting payments from a credit card

If you are wondering how to avoid failed payments when using a credit card, you should:

  • Check the card against your ‘Card to Avoid’ list; if it is on the list, explain that it has a high chance of failure and that there is a failed payment fee if it doesn’t work. If you want to know how to avoid failed payments, ask them if they have an alternative card that they can use that is NOT on the ‘Cards to Avoid’ list.
  • Ensure that the card is current by making sure the expiry date is the current month or later.
  • Advise the member that if they receive a new card at any time, to contact the club to update the details to avoid any failures.

Step 2B: Collecting payments from a debit card

If you are wondering how to avoid failed payments when using a debit card, you should:

  • Ensure the card is current by making sure the expiry date is the current month or later.
  • Advise the member that if they receive a new card at any time, to contact the club to update the details to avoid any failures.
  • Encourage the member to contact their bank to confirm:

One. The ‘Card not Present’ limit is higher than the debit value.

Two. Ensure that the card will accept recurring direct debits.

To do this, it is best to turn the card over and call the Card Services number on the back. If you or your customer is ringing the Customer Service line, ask for Card Services.

 

If you want to know how to avoid failed payments, despite the payment method that they choose, you have to make sure that you explain to the member that there is a failed payment fee that is charged per failure. If they do not believe the debit should have failed, they need to contact their bank in relation to the reason and any reimbursement of the failed payment fee. It is also important for you to explain that access to the club will be denied after X days if payment is not collected and the issue resolved. Take your time answering any of your customer or member’s questions or clarify any points because you want to make sure that they are clear on the failed payment process and what happens. If you want to know how to avoid failed payments, make sure you are clear and that everything you have explained is understood.

 

Encourage the member to communicate

It’s all about the communication

When it comes to knowing how to avoid failed payments, you have to know that despite your best efforts in the sales process, you still will get some unsuccessful payments that you are going to have to deal with in your business or club. However, there are ways to make this as painless as possible with minimal time and money lost.

The best way to do this is through your business and club culture. Ensure that you set a culture in your club where the member can openly communicate about their payments and avoid failures, denies access and fees. This is extremely important because even if you get your payment by eliciting these repercussions, your member and customer satisfaction will decrease and they will have a far from positive experience to take away with them. Here are some tips on how to avoid failed payments and examples of when the member should contact the club:

 

  • If they think their debit may not work, e.g. they spent too much money on the weekend so they may need to delay the debit by a few days or pay via the POS using another payment method.
  • If they receive a new card they need to advise you of the new expiry date and card number.
  • If they close or change their account/card.
  • If they want to suspend or cancel their membership.
  • If they are having trouble paying due to financial difficulty.

Ezypay is a direct debit billing company that has an amazing collection rate of 99.5%! With our many failed payment gateways and settings that you can adjust yourself, that’s as close to a guaranteed payment as you are ever going to get. For more information, please contact us and one of our friendly team members will be happy to help.

Download your FREE eBook: In the meantime, learn how to improve your cash flow in just 31 days. That’s right, in just 31 days!

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