Dealing with Declined Credit Card Transactions [Self Storage]

October 25, 2022

Credit Card Declined with X
5 min

Payment declined.

You’ve wasted your time. You get no money. And you have to explain to the person standing in front of you that their credit card didn’t work.

Rejected credit card transactions are incredibly frustrating - for you, for the customer, and probably even for the bank (though they’ll still charge you the authentication fee). In this article, we’ll go over ways self storage operators can reduce credit card rejections and smooth things over when they do happen.

Cards can be declined for numerous reasons - expiration, technical error, or the dreaded “not enough funds.” When one of your tenants has a card declined, that’s an opportunity for you to do better than your competition. 

Here are a few ideas to reduce the occurrence of declines, and to improve your business’s position when they do.

Why Do Credit Cards Get Declined?

There are dozens of reasons a credit card might be declined - but most of them result in the same course of action for your self storage business. There are a few though that need different treatment.

Depending on the Point of Sale service you’re using, the problem may be reported with different language, but the reasons for the decline are:

  • Not Enough Funds or Credit Limit Reached -
    • This is the simplest and (perhaps) worst of the reasons a card might be declined. This means your customer has asked the bank to approve a payment which they don’t have the money or credit for.

  • Card Read Error - 
    • This is the result of any number of problems, but in general, when you see this error you want to clean the card and try to charge it again. If you can’t get it to work after a few tries, there may be a bigger problem than a bit of dust on the stripe.

  • Card Has Expired - 
    • Simple, but still frustrating. You can’t help the customer solve this one. They’ll need to provide a different method of payment or give you an updated card. This problem is most common when you’re using online autopay.
  • Call the Issuer -
    • Sometimes, the card error will tell the customer to call their bank (or credit union or whatever). This indicates the card issuer is worried about fraud. Again, there’s not much you as a business can do to help with this - just let them know, and ask for another method of payment. Or you can indicate your willingness to wait while they call.

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What to Do if an In-Person Card Scan in Declined

This can be an awkward situation, especially if you’re busy or the customer is in a hurry (which is almost always). But you can make it much easier if you have a plan in place ahead of time.

The first thing to keep in mind is that most declines aren’t due to someone trying to commit fraud. And even if someone is using a credit card in an illegal way, it’s not your job as a self storage owner to get involved.

If a card is declined for lack of funds/credit, quietly inform the customer and ask if they’d like to try a different method of payment. With in-person interactions, you can try to solve the problem right away, using your customer-service instincts.

People are often embarrassed when their card gets declined. Whatever the reason for the decline, they may feel like others are judging them. They may think that you (or whoever tried to run the card) will assume they don’t have the money to pay.

As long as the customer isn’t habitually difficult, you can try to work with them. Forgive a day’s late fees while they fix the problem if the payment was going to be late. Try to keep in mind the lifetime value of a customer compared to the money you might make off a late fee.

Creating a great customer experience will make you far more money than late fees ever could. Make sure whoever is handling customer payments knows how you want them to handle the process, including what leeway they’re allowed to give the customer.

If the customer isn’t there when a card is declined, it gets trickier.

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What to Do if an On-File Card is Declined

Self storage operators run into this problem a lot. Long-term rentals, especially customers that rent for more than a year, are unlikely to think to update their card on file when the card is expiring.

And since the customer isn’t in front of you when your PMS tries to process the payment, it’s not as easy to resolve the problem.

If you run into this, you’ll need to call, email, or text your customer to get a new, updated card. Like with the above scenario, we recommend trying to show leeway when it comes to late fees and upcharges.

The best solution is heading the problem off before there are any late payments at all! With the right self storage software, you can get in touch with your clients automatically before they miss a payment.

Self Storage Software Solutions

With good use of self storage software, operators can notify their tenants before a card expires. The right software can also help you track which tenants are habitually running into trouble making payments on time, so you can try to bring in new, less troublesome tenants.

Automating this process with your PMS will both free up your time to tackle other projects and create a better customer for your tenants. It’s a great way to show them that you’re on the ball - and a great way to avoid negative experiences and hassle.

Another thing to look for is the date of bounced payments. If you know that some of your tenants are on a fixed income, and they get a check on the fifth of the month, but you charge rent on the first, you’re likely to get a lot of card declines. If they’re using a debit card or direct bank payment, they would use to pay you isn’t in their account yet!

You can address this issue in a few ways. First, you could change the date payment gets charged for these tenants (or all tenants, if this is a common problem). Second, you could offer incentives for customers to change to a credit card from their direct payment or debit card (though credit cards sometimes end up charging you higher rates). 

Third, if there are a few tenants that are always having their cards declined, you can always stop renting to them. If a tenant is taking up too much of your time and attention, the best decision for your business is to get them out of your facility.

Intentionally turning down business can go against some operators’ instincts. You have to consider the value of your time and of your employees’ time. Asking a customer who’s always trouble to leave can end up making you more money, as you can dedicate yourself to the customers that better suit your business model.

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Learn more ways to improve your self storage facility with these:

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