Understand Hard Declines

When a payment fails with a hard decline, retrying it won't help until the underlying issue is resolved with the customer. Learn what triggers a hard decline, what Maxio does automatically in response, and how to retry a card once the issue is fixed.

What is a hard decline?

A hard decline is a type of payment failure that occurs when the customer's card-issuing bank rejects the payment request. This can happen for various reasons, such as using a card that has been reported as stolen or lost, or using an expired card. Hard declines are permanent authorization failures and should not be retried. Typically, when a hard decline occurs, it means that the credit card or bank account should not be charged again, since the payment is not processed successfully. Hard declines are typically indicated by an error-type response from a gateway or payment processor.

What happens when a hard decline occurs

Once Maxio (Advanced Billing) receives specific response codes from the back-end processor indicating a hard decline, Maxio takes the following actions:

1. Disable the associated Payment Profile: Maxio disables the Payment Profile associated with the declined payment. This means that the Payment Profile is no longer available for use in any subscriptions or transactions.
2. Remove the Payment Profile from related subscriptions: Maxio also removes the Payment Profile that experienced the hard decline from all related subscriptions entirely, not just as their default. This ensures that future payment attempts are not made using the declined Payment Profile.
3. Create a system notification: Maxio generates a system notification, which can be accessed by clicking the bell icon located at the top right corner of the interface.
4. Send email notification: In addition to the system notification, Maxio also sends you an email notification to inform you about the hard decline.

These actions are taken automatically by Maxio to help you manage hard declines efficiently and keep you informed about the status of your Payment Profiles and subscriptions.

Edge case: re-enabling a payment profile

In certain edge-case scenarios where the reason for the hard decline has been resolved, it may be appropriate to re-enable the Payment Profile associated with the declined payment. For example, if a customer asks their issuing bank to decline a recurring payment due to unrecognized charges but later retracts the request and takes corrective measures with their bank or card issuer, the Payment Profile needs to be re-added to the subscription to retry and reactivate the subscription.

To do this, remove the Payment Profile that experienced the hard decline via the API, and then add a new Payment Profile with identical information for that card. The hard decline classification does not carry over to the newly-added Payment Profile, so this does not block the retry. This is the recommended workflow for cards that encounter a hard decline but need to be retried, as long as it is allowed by the relevant regulations and policies.

Disabled Payment Profiles are not available on forms for creating new subscriptions or paying invoices, since they are considered inactive until re-added to a subscription.

Decline error codes

The following error codes are treated as hard declines:

For credit cards:

• invalid_transaction
• no_such_issuer
• invalid_number
• pickup_card
• lost_card
• stolen_card
• not_permitted
• invalid_account

For bank accounts:

• R02
• R03
• R04
• R05
• R07
• R10
• R51

After Maxio detects that a payment was rejected due to response reasons the industry considers a hard decline, Maxio marks the Payment Profile as disabled and removes it from all related subscriptions.

As a result, a subscription in Dunning no longer tries to make another payment attempt with that exact same rejected Payment Profile.

ACH hard decline

An ACH payment could be returned for many different reasons. Whatever the reason may be, the party who initiated the transaction receives a return code. By rectifying the underlying issue, you may be able to process an ACH payment for that bank account.

To initiate an ACH transaction, the Originating Depository Financial Institution (ODFI) first submits the banking information of both parties. This banking information is transmitted across the ACH Network. The National Automated Clearing House Association (NACHA) governs the ACH Network, checking these transactions for accuracy and rejecting transactions that seem inaccurate. An ACH return code generates for each rejected transaction, communicating what inaccuracy triggered the return.

When an ACH return code generates, the Receiving Depository Financial Institution (RDFI) receives it. The RDFI is not the bank that initiated the transaction; rather, the RDFI finalizes the ACH transaction process by debiting or crediting their member's account with the amount indicated by the ODFI. When an RDFI receives a return code, it notifies the ODFI of the event, and it's then the ODFI's responsibility to notify the originator, the person who initiated the transaction request.

If you receive a hard decline ACH return code, immediately stop any recurring payments from that customer's bank account. Doing so prevents more returned transactions while you resolve the first return. Next, speak with your customer about what caused them to trigger this dispute or cancellation, or ask your customer for another form of payment.

The ACH Network doesn't provide dispute resolution services. You need to negotiate the matter directly with your customer. If the customer insists the transaction was unauthorized, but you have proof of authorization, consider seeking legal counsel.

Related information

For the automatic deactivation that applies to fraud-related chargeback codes and other high-risk events, see Understand Automatic Payment Profile Deactivation on High-Risk Events.

For ACH reject codes that result in a temporarily disabled Payment Profile you can re-enable yourself, see Reactivate a Temporarily Disabled Payment Profile.