If you're not checking your customers' expired cards, you're losing money | Hacker News Reader

If you're not checking your customers' expired cards, you're losing money

developingandstuff.com

17 pointsmparramon11 comments

Hey. I'm the Andrew who runs the Churn Buster product mentioned by patio11.

Very clever of you to think to email customers before their credit card expires. :-) We had the same idea and it was a feature in the original release of our product, but after several months we actually found that only about 30% of cards set to expire actually started failing payments within two months of hitting the expiration date, and after two months failure rates just return to normal. So, even with a healthy 50% conversion rate on the email campaign, we were only retaining about 1.5 customers per 10 that we sent 3 emails to. Furthermore, the email notifications to the customers who very likely didn't need to receive the email were triggering cancelations from some customers as they re-evaluated their purchasing decision in front of a "you owe us money!" email instead of a sales page promoting the benefits they're receiving. :-) For that reason, we no longer send out these emails by default. There are still some businesses where this makes sense, but they're definitely the rare exception and not the rule.

Furthermore, we found that a very decent chunk of failed payments (maybe 15-30%?) will sort themselves out automatically with no intervention if you just try them a few times over a few days. Again, no need to email these customers and waste their time unless there is a time sensitive delivery that needs to go out or something similar.

So, for those two reasons we choose to wait until the third failed payment attempt before we start emailing the customer. But once we hit that third failed payment attempt, we really go to town trying to get in touch with the customer and get them current. We've got all sorts or tricks up our sleeves for this, including a real person with a great British accent who will call customers on the phone.

Happy to answer any questions you or anyone else may have about solving this problem. It really isn't something many subscription service providers think about when they're building their business. Feel free to reach out any time at andrew@churnbuster.io .

Great example of issues I would probably never catch if I tried to implement all of this in-house. It just wouldn't get that level of attention once it was already working.

"Oh, that's easy, I could implement all that in a weekend" - One, no. And two, no. Problems are always deeper than they seem, and it's usually the extra 90% that determines how well it works.

Thanks a lot for your thorough answer! Do you work with customers outside of the US?

See also BeStunning.net, which takes care of this for you, or ChurnBuster.io, which decides to wait for a failed payment (Andrew the founder says outdated CCs will still pass through many payments) and then follow up with a combination of email and real live human phone calls.

Andrew the founder says outdated CCs will still pass through many payments

They sure do. I wanted to cancel Xbox Live years ago but couldn't be bothered to call. Luckily, my credit card was expiring that month anyway.

Six months later I noticed I was still paying, and only got an email a full year later asking me to update my information.

Thanks! We're not using Stripe though, do you know of any solutions that do not depend on it?

Talk to the guys who run those two about their near-term product plans. They may be able to assist you. wink

I'm fairly certain that Churnbuster now supports other payment processors and gateways beyond Stripe.

First let me say that there is no support like Stripe support. :-) I'm always greatly relieved when onboarding with a customer and they both use Stripe and Stripe subscriptions. But to your point, I may know something about Churn Buster supporting folks not using Stripe subscriptions or even using other payment processors. Email me at andrew@churnbuster.io for more information. :-)

Thanks as always, Patrick!

As Braintree eloquently put it, "Credit cards aren't like milk--they're still good after expired" [1]. If the account itself is still valid and still has the same number, charging it will often still work for recurring payments. I've heard conflicting advice from different payment processes as to how to submit a recurring charge on a card that is expired (but was not expired when the original transaction was submitted). I've heard both (1) set the expiration to 0000, and (2) set it to some future date (original + 3 years, e.g.).

If the account number has changed, then you are out of luck--unless it is a Visa or MasterCard and you subscribe to Visa or MasterCard's recurring billing update service [2], which takes an account number and (sometimes [3]) will tell you if the account has a new number and/or expiration date and will give you that new information.

[1] https://www.braintreepayments.com/blog/credit-cards-arent-li...

[2] I'm not sure if this is generally available or is only offered to merchants who meet certain volume and reliability requirements.

[3] It's up to the issuing bank whether or not the update service is supported.

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