When you build a membership site, you're full of excitement to finally create passive income with an online business. However, there are times when problems may arise, like failed payments, that put a pause on your recurring income.
This can be a stressful situation, but rest assured that there are some easy ways to handle this problem!
In this post, we'll discuss the reasons why online payments may fail in your membership site.
We'll also talk about how your online business can handle these failed payments as gracefully as possible, and we'll go over some ways to avoid failed payments in the first place.
Let's get to it!
How Do Failed Payments Happen?
The beauty of having an online business is that you can accept payments in a number of different ways (credit/debit cards, Stripe, PayPal, digital wallets, etc.).
However, when a failed payment occurs, business owners quickly learn that these convenient payment options can be both a blessing and a curse.
The most common causes of failed payments include:
- An expired or canceled debit/credit card
- A lack of funds on the credit/debit card
- Incorrect bank account or card details
- A bug in your payment gateway
- A hold placed on the customer's account/card due to the bank's fraud prevention
How Do Failed Payments Impact My Business?
Whether or not a failed payment is your fault, it can negatively affect your membership business.
- You may not be able to access your funds as soon as you like, or you may lose that income altogether.
- A member whose payment fails may not want to deal with the hassle of returning to make another payment, so you could lose a customer.
- A customers might lose trust in your business if a payment fails, and they may not want to come back.
Losing a customer is a serious consequence. If your site experiences a lot of failed payments, those consequences can be catastrophic. So it's important that you understand what to do when failed payments happen to you.
How Do I Handle a Failed Payment?
Failed payments happen. It's just part of doing business online. So when they happen to you, make sure you're well armed to handle the situation.
Following are a few helpful tips.
The first thing you should do when a failed payment arises is remind yourself to stay calm.
Like we said, failed payments happen to the best of us. And the calmer you are, the greater the chances you won't offend your customer by overreacting. It's okay to be alarmed, but make sure you're relaxed so you can handle the situation properly.
Make sure everyone is informed.
This one is super important! When a failed payment occurs, don't assume your customer is aware of it.
So first, reach out to your customer to let them know of the problem. Not only is this good customer service, it also shows your customer that you're aware of them and that they're important to you.
Offer a solution.
Once you've alerted your customer to the problem, you'll want to offer a solution for how to fix it.
If the issue is on your end, let them know you've fixed the problem. If it's something on their end, provide easy-to-understand steps on how to get things squared away.
The easier and clearer your instructions, the better the chances your customer will follow through.
A failed payment can be embarrassing for both you and your customer. But it's important to remain professional – for the good of the customer and for your own good.
Never take a failed payment or a lack of a response from your customer to heart. All you can do is communicate the problem, offer a solution, and wait. You can't force a member to return to your membership site, and you wouldn't want to anyway!
Learn from it.
Last but not least, take the opportunity to learn from this mishap. Whether it was an issue on your end or not, you can always use the situation as a learning experience to do better in the future!
How to Avoid Failed Payments in the First Place
You know how the saying goes: Prevention is the best medicine. The same goes for failed payments.
Fortunately, there are a number of things you can do to get ahead of the failed-payment problem before it starts.
MemberPress has built-in features for failed payment recovery that work together with your payment gateway.
Below, we'll go over general MemberPress settings for failed payments, and we'll talk about a few gateway-specific solutions. Last, we'll clue you in on an awesome plugin that keeps working to capture lost payments long after the gateway gives up.
MemberPress settings for failed payments
MemberPress has a handy setting just for recovering your failed payments. To find it, got to the WordPress dashboard > MemberPress > Settings > Emails tab.
In the list of automated emails, you'll see an option titled, “Send Failed Transaction Notice”. Just check the box to enable the setting.
Once enabled, this function will send an email to any customer whose payment fails.
There's a default message out of the box, but you can edit the message any way you like. For example, you might include a link to the member's account page so they can quickly and easily update their payment details.
Recovering failed payments with Stripe
If you use the Stripe payment gateway, you can set up a custom retry schedule.
To get this functionality, go to the Stripe Dashboard > Settings > Billing > Subscriptions and emails > Manage failed payments, and set it up so that a member's card is charged again after X amount of time.
You can also use Stripe Smart Retries. This super cool feature determines an optimized time, then attempts to charge a customer's card again at that time.
Recovering failed payments with PayPal
There's nothing to set up or customize with PayPal-specific payment recovery.
After a failed payment, PayPal will complete three retries over 15 days (each try five days apart). If all attempts fail after the 15 days, the subscription cancels automatically.
Recovering failed payments with Authorize.net
When it comes to payment recovery, the Authorize.net payment gateway is also pretty simple (though nonetheless handy!).
If you enable the Automatic Retry feature, a member's subscription will remain in a “pending” state until the card is updated.
The Churn Buster Plugin
The beauty of Churn Buster is in its preventive capabilities. The plugin reminds members to update soon-to-expire credit cards and even helps to resolve insufficient funds issues.
And of course, long after your payment gateway has given up, Churn Buster is still busy working hard to recover your failed payments should they occur. It even has features that can improve the strategic timing and frequency of card retries – resulting in greater success.
Churn Buster's optimized retry schedule is highly effective in helping to recover failed payments caused by things like daily spending limits, temporary holds, and processing timeouts.
The best part? Churn Buster offers new customers a free 14-day trial.
No matter what type of online business you have, failed payments can sneak up on you at any time. Just never forget to stay calm and handle the situation calmly and professionally.
And remember, prevention really is the best medicine. Hopefully, our tips will help you handle your failed payments like a boss!
Have you ever had to deal with a failed payment? How did you handle it?