If your gym has been noticing more recurring monthly card payments from members getting declined, just know you are not alone. Most of the time, it is through no fault of the member, as they likely do have the funds. It’s the financial institutions, the issuers of the card, who are the perpetrators.

Why Are the Declined Payments Happening?

It may surprise you, but on average, 15 percent of recurring credit card payments are declined. To complicate matters even more, 30 percent of credit cards have to be reissued each year for various reasons, halting recurring payments in the process. As a gym owner who relies on monthly member payments to keep the business running, a few too many of these could be a death blow. This is considered “involuntary customer churn”, where the customer wants to pay, but the system is stopping it from happening.

You might have noticed an uptick in declined payments just in the last month. Card networks (Discover, Amex, Mastercard, Visa, etc.) make system updates and regulatory changes every year during two release periods: spring and fall. One just happened at the beginning of October. Cards that worked previously may now be hit with codes such as “Do Not Honor” or “Transaction Not Allowed”.

Reasons for the Decline

There are a handful of reasons why the declined payments are happening. Understanding these may provide you with a solution to fix the problem.

Insufficient Funds: The account the card is linked to lacks the money to cover the charge.

Temporary Technical Errors: Processing glitches on the bank’s end are keeping the transaction from happening.

Expired Card: The expiration date has passed on the card.

Security Flags: Something is currently triggering the automated fraud filters for the card at the issuing financial institution. Recurring charges are under constant scrutiny.

Stolen or Lost Card: The card is missing, so the account has been closed by the cardholder.

Invalid Card Data: The account number or routing data is no longer correct.

Neobanks Have a Higher Decline Rate: Neobanks are financial institutions that do not have any sort of brick-and-mortar building or physical location. It’s digital banking through apps and websites. Their decline payment rates are up to five times higher because they are financial technology (fintech) companies with often unique funding models. They are greatly concerned about fraud and have high decline rates to show for it.

Possible Solutions to Fix the Recurring Payment Decline

Who knew being a gym owner would also allow you to be a detective? (I’d watch Gym Owner: CSI in a second.) In determining why the card was declined, you may be able to find a quick solution to the problem. If you follow these tips, you should be able to significantly lower that 15 percent decline rate.

Reattempt During Morning Hours: Banks have fewer false declines on card attempts during morning hours while the brick-and-mortar banks are open. It is the optimal processing window to do all of your recurring payments.

Choose the Days for Recurring Payments Wisely: If you are worried about insufficient funds being the reason for a decline, schedule recurring payments for the 1st, 15th, or Fridays during the month. These are the days when most people get paid and are more likely to have the funds.

Find the Expiration Date: Locate the expiration date for the card on your screen. If it has expired, reach out to the card owner.

Ask the Member to Contact Cardmember Services: If the card was declined, wait a day and reattempt first thing the next morning. If it is declined a second time, stop all other reattempts and contact the member. Let them solve the problem through the cardmember services.

What Not to Do As a Gym Owner with a Declined Payment

Once a member’s recurring credit card payment is declined, don’t keep hitting the button and trying it over and over again. Too many rapid-fire attempts during a short window of time will trigger a “card_velocity_exceeded” code or fraud alert. It could appear to the financial institution as a “carding attack”, or an unauthorized person trying to steal as many funds as possible before anyone realizes.

Furthermore, each attempt is being viewed by the financial institution, and they do not take kindly to reattempts so quickly after they have already declared the transaction has been declined. They will charge you, as the business owner, with a penalty for excessive reattempts. Depending upon the card, it could be 10 to 20 cents each reattempt. Some cards charge a dollar or two for each increasing reattempt. In rare cases, a number of disproportionate reattempts will result in the business being hit with a costly fine.

As a gym owner, you just want your money without having to play the role of a loan shark with members or having to deal with ruthless credit card companies. With the latest update from Gym Insight, there’s no need to break legs or waste your time on the phone with the bank’s customer service representatives.

NEW UPDATE: Gym Insight Software Has Your Back

At Gym Insight, we want to reduce as much gym owner stress as possible. Declined recurring payments are a frustration we can help you avoid. The Gym Insight software will receive a new update shortly with an upcoming secondary payment option.

Members will soon be able to have two different cards on file, whether it be a credit card or debit card. If the recurring payment is declined on one card, it will automatically charge the other card on file without delay. No more hassle or playing tag with members while trying to reach them for a payment that has been declined.

If the person is less than excited about providing two card options, remind them that 15 percent (or more) of recurring credit and debit card transactions are declined. As a business owner, having the second payment option on file is literally going to allow you to keep your doors open. And, as many declines are due to financial institution issuer errors that are remedied within 24 hours on their own, it will save the member from having to contact the company if their card were to get frozen or locked out from too many attempts.

Gym Insight

Our gym software is constantly evolving according to gym owners’ needs. If you have a problem, let’s brainstorm and come up with a solution. Gym Insight offers flat, per-month pricing plans with a lifetime guarantee that our price will never increase. If you haven’t done so already, come give us a try!

Phone: 1-855-FOR-GYMS

Email: [email protected]