Credit Card Declined Codes Explained

Whether you are a business owner or a frequent shopper, you’ve probably run into a declined credit card payment at least once. Declined payments can be due to a wide variety of reasons, ranging from errors when introducing the information to more severe fraud flags. The best way to deal with these codes is to learn what each of them stands for and what you can do when you run into them.

To that end, in this article, you’ll learn what credit card declined codes are, what each of them means, and how you can help lower your rate of declined payments.

What Are Credit Card Declined Codes?

The credit card declined code is an alphanumeric two-digit code that indicates why a credit card transaction has been declined. Using these codes, merchants can determine if a transaction should be reattempted based on additional information they receive.

The processing of a credit card transaction involves many entities. The transaction starts with the merchant and the customer, but before any money changes hands, it passes through a payment processor, gateway, and the customer’s bank. Any of these parties may reject the transaction if there is a problem with it. In this case, they will send back a decline code that explains why the transaction could not be processed.

Although credit card declined codes aren’t uniform across all networks, there is now a standardized list of codes covering most scenarios after an extensive effort to standardize them in recent years.

If a merchant encounters a network-specific decline code, they should check that network’s list of response codes in order to understand what it means.

Breakdown of the Different Credit Card Declined Codes

Many reasons can cause a credit card payment to be declined, including the card being flagged as fraudulent or an issue with the merchant’s payment processor software. Here is some credit card declined codes and what they mean:

01: Refer to the Issuing Bank

The transaction was blocked by the credit card company (Mastercard, Visa, Amex, etc.). You should suggest your customer switch to a different card, as well as contact the issuer to figure out the issue.

02: Refer to Issuer (Special Condition)

As with the previous code, this is a result of an issue with the issuer. You can recommend your customer to use a different card or payment method and direct them to contact their issuer to find out why the code occurred.

03: Invalid merchant

This code indicates that there is a problem with the merchant’s payment processor software and that it might not be set up correctly.

04: Pick Up Card (No Fraud)

The code will appear if the card has expired or if it has been stolen. Retail merchants are responsible for confiscating the card and returning it to the issuer.

05: Do Not Honor

This card should not be accepted, as its name implies. Customers must use other payment methods instead.

07: Pick Up Card, Special Condition (Fraud Account)

The issuing bank flagged this account as fraudulent. Don’t take payments from this card, and be wary of other payments from this customer. If you are adamant about continuing with the transaction, you should make it cash-only.

12: Invalid Transaction

You have attempted to perform an incorrect transaction. This might be the case if you are processing a refund. Make sure that all payment batches have correct configurations.

13: Invalid Amount

This error occurs when an incorrect or invalid number is entered in the number field. Maybe you type in an incorrect symbol or use a negative number.

14: Invalid Card Number

Similar to error code 12, this error happens when you fail to type the correct card number while inputting a customer’s credit card information.

15: No Such Issuer

The error occurs if you do not enter the correct credit card numbers for the corresponding card brand. For example, American Express’s cards always begin with three digits. Visa uses 4, Mastercard 5, and Discover 6.

19: Re-Enter, An Unknown Error Occurred

There was an unknown error. In this case, you can only try again. If the error persists, contact the issuer.

28: File is Temporarily Unavailable

The code appears if there is a problem during authorization. Try entering the numbers once more and contact the card issuer if you still get the error.

41 and 43: Lost Card, Pick Up (Fraud Account)

This means that the card owner reported the card as lost or stolen. The card should not be run again, and the customer should not be provided with goods or services. In the case of recurring payments, you can try getting alternate payment information from the customer, but only if you haven’t had issues with them in the past.

51: Insufficient Funds or 65: Activity Limit Exceeded

This transaction is being denied by your customer’s issuing bank because either your customer’s card is at its limit, or this transaction will put it over it. Your customer can contact their credit card company to have their card’s limit increased, or you can request another form of payment.

54: Expired Card

The card has expired, as indicated by this error. Verify that the date is correct. Customers should check their expiration date. If the card has expired, they’ll need to get a new one. You can ask for a different payment option either way.

57: Transaction Not Permitted – Card

You will see this message if the card has not been configured for a specific type of transaction. The customer should call their card provider so that the transaction can be approved. Once approved, the transaction can be completed.

58: Transaction Not Permitted – Terminal

This problem occurs if a merchant’s processing account hasn’t been set up to accept this type of transaction. Consult your account provider about re-configuring your POS accordingly.

62: Invalid Service Code – Restricted

The system may not be configured to accept AMEX or Discover, or the customer is trying to pay online with a card that can’t be used online. If this occurs, you can have the customer pay using a different method, or you can get in touch with your merchant services provider.

63: Security Violation

An incorrectly read CVV, or CID code results in this error. You can usually run the transaction without including the code without any problems. However, you should inform the customer if the transaction pops up as fraudulent due to this. 

85 OR 00: Issuer System Unavailable

Codes 85 OR 00 are caused by temporary communication errors. You can simply wait a minute or two and run the transaction once more. If you still have issues with the payment, contact the issuer.

85: No Reason to Decline

Errors in this category are unexplained and usually resolve on their own. If the problem persists, contact the issuer.

91: Issuer or Switch is Unavailable

Like error 85 above, error 91 doesn’t have a specific reason for the issue, as it’s more of a catch-all code. You will either have to contact your payment processor or the card issuer if the problem continues.

93: Violation, Cannot Complete

The transaction was denied due to an issue with the customer’s account. You should ask the customer to use a different card and to contact the issuer to determine the problem.

96: System Error

The transaction encountered a problem, so try again after a few minutes. If the problem persists, please contact the issuer.

RO or R1: Customer Requested Stop of Specific Recurring Payment

A customer has requested that their bank discontinue recurring payments. You should follow up as soon as possible to ensure this was not a mistake on their end.

What’s the Difference Between a Hard Decline and a Soft Decline?

Soft declines indicate that the transaction can be retried. If the problem that led to the first decline has been fixed, the second attempt may be approved. Hard declines, on the other hand, are final. Hard declines should never be retried.

At the processor level, aggressive anti-fraud tools can sometimes result in soft declines. Soft-declined transactions will be subject to the rules and guidelines of your processor. Take a look at the information they have provided and be especially careful when allowing automated retries. Ideally, your system should block repeated attempts to complete a transaction in a card-not-present environment if the transaction has returned a hard decline code.

In the case of hard declines, offering the customer alternative payment methods is the best way to recover sales. You can also hold an item for them if they need to contact their bank to resolve a security flag or to increase their limit.

You should not try to force a transaction without proper authorization, as you won’t be able to dispute a chargeback in that situation. If you are proceeding with the approval of the customer, you should always document the actions you took and keep them as evidence in case they later decide to dispute it. Keeping good records can be crucial to winning a chargeback dispute.

Keeping a reference sheet on hand with a list of decline codes and instructions for employees may be beneficial to merchants. As a result, employees can explain to customers why their cards have been declined and prevent any confusion regarding retrying or not retrying a transaction.

How to Handle Credit Card Declined Codes

There are a few ways you can handle a declined credit card code. If your customer is trying to pay and one of these codes presents itself, try the following:

Look up the specific credit card decline code

The steps to follow will largely depend on the kind of code you get. For instance, fraud-alerts should be raised if you receive a decline code that indicates the card has been lost or stolen or any other response that instructs you to “pick up” the card from the customer. You will need to contact your credit card processor’s authorization line and request a “Code 10 authorization” if you receive this declined code with the customer present. A representative will contact you with further instructions on how to handle the situation.

In the case of an online or other card-not-present transaction, you don’t have to do anything specific. However, be careful with continuing your business relationship with this customer, especially if you do not have a previous relationship. In a card-not-present environment, you might see this sort of decline because your customer reports a stolen card that you have on file for recurring billing.

Have a plan for declined transactions in place ahead of time

Prior to a declined credit card transaction occurring, you should have a plan for handling it. If there is no process in place, the situation will only become more stressful for everyone involved. In order to maintain good customer relationships, you need to reject potentially fraudulent transactions with caution. Furthermore, you should have a decline strategy in place that cultivates profitable customers and gracefully turns away troublesome and ultimately unprofitable ones.

The first thing to remember is that not all credit card declines occur because of a problem with the cardholder’s credit. In some cases, a unilateral decision is made by the issuing bank based on risk protocols. You can often encounter errors when typing in an account number for transactions where you manually enter card data.

In addition to standard reasons such as exceeding credit limits, delinquent payments, and expired cards, there are some less obvious reasons a card might be declined. The card issuer may initiate a freeze on your account due to international purchases or other unusual purchases.

Ask for a different form of payment

Some declines may just be issues a customer needs to resolve with their credit card company. As a matter of fact, in many cases, the customer will be just as confused as you are by the decline. In those situations, it is best to simply request a different form of payment. 

You could ask for a different credit card, a check, an ACH payment, or cash. Alternatively, you can let the customer call their card issuer, work out any problems, and get your transaction pre-approved. Once approved, you can retry the transaction.

Beware of declined transaction costs

When a transaction is declined, you are charged an authorization fee. Even though these costs are typically only a few cents per transaction, they can add up if you have many declines and resubmissions. There is a widespread issue with online payment forms, where customers can submit a transaction multiple times if a mistake is made. Data entry errors can’t be eliminated, but you can help prevent them. Make your forms easy to read and use. The customer should be able to enter the correct expiration date, and then the form can auto-select the card type based on the account number entered.

How to Lower Credit Card Payment Declines

If your business is suffering from a high rate of declined credit card payments, then dealing with a code once it pops up will only be a short-term solution. You need to be proactive about the way you handle these issues, and the best way to do so is by following these tips:

Use recurring billing indicators

Identifying recurring billing payments with indicators can help you avoid erroneous denials and expedite the resolution of disputes with payment processors and banks. Contact your payment provider to see if they offer this feature. In that case, you should include the indicator with every recurring transaction you process.

Be proactive about customer outreach

It’s not easy to re-engage customers after a decline has occurred and ask for their payment credentials. Reaching out before the decline takes place will improve your chances of getting updated information. To do this, run a query in your CRM to look for credit cards that are nearing their expiration dates, and notify card holders that their subscriptions will lapse if they do not update their credit card information.

You should also contact customers after their charges have been declined. Keep their information current, remind them why they subscribed and what they will miss, and offer some incentives if you can. It’s always better to keep an existing customer than to have to go out and find a replacement.

Use account updater programs

MasterCard and Visa allow merchants to enroll in programs that automatically obtain updated credit card information from issuing banks and update your payment gateway with new billing addresses, expiration dates, and even account numbers. Merchants will not necessarily receive their new payment credentials in full, but automatic payments can continue as before.

Provide automatic clearing house payments

Today, many customers prefer to make ACH payments online using their checking accounts. There are additional reasons for merchants to prefer ACH, too, as the processing fees are lower, and ACH transactions are less likely to be declined than credit cards.

In the event that you decide to accept ACH payments, ensure that your billing practices are bulletproof. It’s imperative you don’t make any mistakes in the transaction amount, as that could result in overdraft or NSF fees for your customer, who probably won’t be very happy.

Notifying your customers a few days in advance of each recurring charge is good practice in general, but these fees make it even more important for ACH transactions.

Resubmit (carefully)

It is possible to resubmit “soft” decline codes and have them accepted. A payment may be declined for insufficient funds simply because the cardholder is near their limit and they haven’t realized. Network issues can also cause declines. However, be aware that some card networks may prevent you from retrying too often. If in doubt, contact your payment gateway provider.

Final Thoughts

Awareness and understanding of the different credit card declined codes is the best way to deal with declined credit card payments. Not all codes mean that the payment can’t be processed at all, and knowing which codes allow you to retry the payment (soft decline) and which ones can’t be retried (hard decline) can also be the difference between saving or losing a sale. If you deal with declined payments often, try checking around for tools that allow you to instantly update the card information you have stored, such as Visa and Mastercard’s account update programs. If your business uses a lot of recurring payments, you should also inquire with your provider to see if they offer recurring billing indicators.