What are Decline Codes Anyway?

Every time a customer taps their card or pays on your website, that transaction is either approved or declined. For every declined transaction, there is a 2-digit alpha numeric code that tells the Merchant why a card was declined. 

For example, when you swipe your card to pick up a new TV and that transaction gets declined for insufficient funds. The Merchant’s POS will tend to generalize the Issuer’s decline codes so the clerk can ask the customer to swipe again or use a different card. 

With ecommerce (Card Not Present) and subscription business models, where the card holder isn’t always present, decline codes can be an invaluable tool. They give Merchants insight into retrying payments, if card holders are committing fraud, if there is missing payment information, and more.

Decline codes are two-digit codes that tell the Merchant why a credit card was declined.

Decline codes can break down into:

  1. Soft Declines – temporary issues that can be retried
  2. Hard Declines – permanent issues that (most of the time) shouldn’t be retried
  3. Referral Codes – the Issuer wants to handle the transaction
  4. Service Codes – problems with the processing infrastructure are preventing the transaction
  5. Fraud – suspected fraudulent activity on card

Stay tuned as we make sense of Merchant decline codes.

April 15, 2024

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