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HomeOntraport for paymentsTaking payment > Declines and collections
Home > Taking payment  >  Declines and collections
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Declines and collections
Take a deep dive into declines and collections so you’re prepared when a card fails. Set up your account to handle failed payments automatically.
You'll learn:
  • How to automatically chase those hot leads whose payments failed
  • How to set recharge settings that alert customers when their subscription payments fail
  • How to send follow up thank-you emails when customers update their payment info
  • How to create a custom automation for a dunning system
Instructor
Jason Howell
Declines and collections
Take a deep dive into declines and collections so you’re prepared when a card fails. Set up your account to handle failed payments automatically.
You'll learn:
  • How to automatically chase those hot leads whose payments failed
  • How to set recharge settings that alert customers when their subscription payments fail
  • How to send follow up thank-you emails when customers update their payment info
  • How to create a custom automation for a dunning system
Course Instructor
Jason Howell
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Transcript
In this video I’ll cover failed transactions and collections. What I’m talking about is that sad moment when cards decline – either right after someone fills out an order form or when you try to process a subscription payment. These two situations are handled a little differently.

If a card declines on an order form, you’ll capture the contact’s information from the form so you can follow up and get them to try again. But here’s the rub: if the order didn’t go through, you didn’t deliver on the product. So, the customer doesn’t actually owe you anything, right? 

On the other hand, if a subscription or payment plan payment fails, well… you did deliver the product and the customer probably owes you the money. So, Ontraport is going to try to get it for you with an automated collections process.

I’m going to explain how all this works so you can get real paid.  

Before we jump into declines, I’ll go over the different statuses for transactions in Ontraport. Those statuses are:
  1. Paid
  2. Declined
  3. Collections
  4. Write-off, and
  5. Void

Paid is pretty obvious – everything worked the way it should – so I’ll move on. Void is when you just want to cancel the transaction as if it didn’t happen. But declined, collections and write-off are a little trickier, so I’ll dig into those.

Declines happen when you run a charge and the gateway returns a “declined” status. You might see it on your end when you process subscriptions or payment plans. When this happens on your order forms, your customer knows right away that their payment failed. Instead of going to your thank you page, they’ll get an error message about the declined payment.

And FYI: some good news about this unfortunate situation. Even in the event of a decline, your potential customers will be added to your account as contacts, or their record will be updated if you already have their info. This is pretty fantastic because there’s no hotter lead in the world than someone who tried to buy your stuff!

To chase those hot leads, you can set up automation to respond to failed transactions. You’ll add a trigger or goal for “Contact submits form” then select your order form and the
“& order fails” option. You can add an email under your trigger to check in with the contact who just tried to purchase but wasn’t able to. 

Ok, moving on to collections. Subscriptions and payment plans are both recurring payments, or what we call Open Orders. So when the next charge date comes around, your account will try to charge the card on file for your customer. But what happens when your customer’s card has expired, or there isn’t enough money in the account when your recurring payment charges?

In those situations, the transaction status will be sent to collections, and the process defined in your recharge settings screen will be kicked off! Recharge settings are designed to manage what happens when an open order is declined. You’ve probably had this happen in your own life:

You set up a subscription. Then maybe your card expired, or you forgot to transfer money to the right account before your subscription charged next. You got an email saying, “Hey! Your card didn’t go through… wanna try a different one?” 

Or say you had access to a membership site and tried to log in, but you were locked out. You got that message that says, “Not so fast buddy… Please update your payment info and we’ll let you back in!” And if you don’t do it right away, you keep getting gentle, friendly (and persistent!) reminders trying to get you to update your credit card.

Eventually, your card works again, your transaction goes through and you get an email that says, “Got it! You’re back in. Thanks!”

Recharge settings are specifically designed to create this automated experience. You have rules that let you send emails and automate actions at each point of this process. Let’s check out how it works!

To get to your recharge settings go to Sales → Settings → Recharge Settings. The top section is called “Retry Transactions in Collections.” Here’s where you can specify how often your account will attempt to collect the payment in collections. The default is to try every 3 days for 90 days — after that the transaction is written off. Or, change it to what works for your biz.
 
In this section, “The First Time the Transaction Fails, Run These Rules,” you’ll want to add an email to send to your customers to let them know that their payment failed. In that email, give them a link to a form to update their information.

If you sell access to a digital product like a membership site, you should also make sure you disable access so your members don’t get access for free! To do that, you can use conditions to make rules that are specific to certain products.

“After the first failure, run these rules every additional time the transaction fails” is the section where you’ll want to add another reminder email. In this email, also let your customers know that they are past due and give them an easy way to update their payment info. You can either use one generic email, or you can use conditions to send unique emails for your different products. For example, an email for your membership site can remind your customers about the content they’re missing while they’re locked out.

Adding a link to your customer center is a really great way to let your customers update their own information. We have a separate lesson on “How to set up a customer center” so watch that for more info.

In the section called “After the last failed attempt, run these rules,” you can set up automation for the failed payments that you’re going to write off. If you sell access to a membership site, this is probably where you’ll want to completely disable your contact’s access to it. It’s also a good idea to send a final email letting your customer know that their subscription is canceled.

And finally, the “If the transaction is successful, run these rules” section. Here’s where you set up automation for your successful payments! When someone finally pays the bill, this automation will run. If you disabled membership access, make sure you re-enable it here. It’s also best practice to send a thank you email to your customer letting them know that their subscription is now up to date!

Now, I just went through how to customize your recharge automation with recharge settings. But like I mentioned earlier, you could also rebuild that same experience using automations. This option is nice because you can always see who's in what part of the process looking at Performance Mode. 

If you want to create your own custom automation for a dunning system, use triggers and goals to help you do it. Use the “Open order is charged or updated” trigger / goal to get people on the automation. Select your product and choose “Is charged but declined” for failed payments.

You’ll use the “recharge transactions” element type within your automation to retry the card on file. Remember to re-use that element each time you want to hit the card. Use “is charged and successful” goals for successful payments.

There’s a lot of power and flexibility here, and too much to cover in this video frankly. For more on both building automations and reporting in Performance Mode, check out our entire section dedicated to automations in the Ontraport for marketing course.

Now you’re ready to make sure potential customers don’t fall through the cracks because of a payment problem. You know that if a payment fails on an order form, you can alert your customer right away. You know how to set up how often your account will retry cards. And you can set up automation for every time a transaction fails in collections. 

Rest easy now that you’re taking care of the ugly business of declines and collections, automatically. Stay tuned for more important skill-building on payments, like how to set up invoices, taxes and shipping.
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