I work with retailers (florists) that depend on credit card payments, often over the phone, and was recently working on best practices for avoiding (whenever possible) and dealing with (when unavoidable) credit card declines. Understanding what is happening on the merchant side (the person trying to take your credit card as payment) can also help you, as a consumer, avoid and deal with credit card declines.
When paying by credit card over the phone please remember that the merchant has to enter at least two pieces of card information (card number and expiration date). It is likely that they are going to ask for more (name, verification code, etc.), and they may also be asking for your billing address.
It's tempting just to start giving them the information in the order that makes the most sense to you, but this will almost certainly force them to bounce around between the fields in their system or terminal. That means they'll make mistakes, and/or have to ask you to slow down, hold up, or repeat things entirely.
It's much better just to sit back and give them the information as they request it. That will let them follow the sequence in their system, reducing mistakes and making things more efficient.
Speaking slowly and clearly is obvious but often ignored. We're all in a hurry but it will almost certainly be faster to say the numbers and dates slowly and clearly once rather than rush through them and then have to go back and repeat because the customer service representative missed one or two digits.
Your name too... if asked be sure to clarify anything that might have alternate spellings.
If you are asked for your address this becomes even more important. Make sure to enunciate carefully street and city names, and try and present the information exactly as it appears on your credit card statement. If the address on your statement reads "15-C W Highland Ave" then say "1-5-dash-C W Highland A-V-E".
Why is that so important? If the merchant is set up to strictly enforce address verification then even the smallest difference between the information you provide and the information your credit card company has on file can cause the payment to fail. The difference between "W" and "West" or "Ave" and "Avenue" can mean you have to go back and start over.
If the merchant is using "looser" address verification settings, then small discrepancies may be allowed making it possible for the transaction to go through. It is, however, likely to be at a higher rate for the merchant. If the address is not an exact match they likely have to pay the credit card company a higher percentage of your purchase.
This is, of course, invisible to you – it won't cost you any more, so why should you care?
First – does anybody really want to see a credit card company get more of their money? Hopefully not. More importantly any extra costs to the merchant ultimately get passed back to the consumer in the for of higher prices. Why not just get the information right? That doesn't cost you anything either.
Declines happen for many reasons. They're bad for everyone – for you, for the merchant, and for the credit card company. Understanding what is happening, which often involves deciphering what is said, is the key to getting the problem resolved quickly.
In all cases try and avoid getting angry, frustrated or offended. Presumably you want to make the purchase, and the merchant wants to help. Work together to get past the problem.
Sometimes the merchant will have a clear explanation for the decline. If the credit card company believes it to be a legitimate transaction with some bad information they will pass back an error message designed to help the merchant solve the problem. If for example the card number is wrong, or invalid, the error message will typically explain that so that you and the merchant can set things right.
In other cases the credit card company may not provide as much detail. This makes sense – in an era when credit card fraud is common they don't want to help scammers narrow down their problems. If for example strict address verification is being used to reduce fraud they wouldn't want to send back a message that said, in effect, something like "you're getting warmer but the street address is still off just a little... please try again".
If the credit card company declines the payment because of technical issue the merchant will probably want to try again. Hopefully this is the ONLY time they suggest that there is a problem with their equipment. This kind of error, most often a "timeout", is common during peak periods when connections and servers are overloaded. Usually a second or third attempt will take care of the problem and the transaction will go through.
A decline might also be intended to protect you. If the credit card company believes that your card has been compromised, or that current sale is not legitimate, they are likely to decline the transaction. In such cases the merchant will, hopefully, encourage you to call the credit card company and ask you for a different credit card in the meantime. They are trying to help you here – if the card has been frozen because of suspected fraud you want to get it sorted out asap!
What about declines because of a problem with the cardholders account? Because it is over the limit, or because the card has been suspended because of late payments?
That gets tricky. The merchant has, hopefully, been advised to never risk addressing this directly for risk of offending the customer.
Unfortunately they often make the mistake of explaining that there is some kind of problem with their system. They have been trained to deflect the problem away from the customer, and so they mistakenly deflect it in their own direction.
Why is this bad? Because it doesn't get anyone any closer to solving the problem. Presumably you want to buy the item, and they want to sell it, and there is a credit card company that wants to get their commission. By blaming their system the merchant is suggesting that the only solution is to keep trying, and that is never going to change anything.
Hopefully the merchant will deflect the problem in the direction of the credit card company, usually by saying something about security. They are correctly trying to get the cardholder in touch with the credit card company as they are the only two parties that can solve the problem. To keep things moving the merchant should then ask for a different card, so that the current sale can be completed.
If the merchant says that there is a problem on their end and then asks for a different card? They are not being honest. If the problem is with their system a different card is unlikely to change anything. Make a mental note to get in touch with your credit card company right away – there is some kind of issue that needs to be dealt with.