Many merchants are concerned about their transaction decline rates and want to ensure that the rates are within what is normal for their industry or segment. Their concerns can be amplified by seeing large blocks of declined transactions, multiple attempts to collect on a single invoice, and numerous customer updates to billing information. It's important to note that with subscription billing, declines are normal. For most customers, a decline rate of 5-14% of monthly transactions for business-to-business (B2B) and 6-18% for business-to-consumer (B2C) is about right—but that number will vary greatly depending on the composition of a user base. For example, Recurly typically sees a higher decline average for younger consumers (due to low card balances), non-profit organizations (due to card purchasing limits or restrictions), or annual subscriptions (more time between charges means more time for card changes.) Understanding decline patterns in your user base as well as determining month-over-month decline rate trends is important in understanding whether or not there is a problem. 

Transaction declines per month

Transaction Declines Aren’t as Important as Invoice Failures

A transaction is created as part of closing an invoice. When a transaction is declined, the invoice will go past due, and further transaction attempts will occur, so an invoice may have more than one transaction associated with it. Invoice failures, however, mean that all collection attempts have stopped, and the revenue will not be collected. Because this is a one-to-many relationship, a high transaction decline rate doesn't mean much, especially when the majority of transaction declines across most merchants are a generic error, which has the most frequent retry schedule.

What's more important than transaction declines is how they are resolved, and this is where Recurly's feature set helps. When a transaction declines, Recurly kicks off a two-part process: the first being customer communication: emailing your customer (on a schedule you define) and prompting them to update their billing information. The second part of the process is a card retry effort—retrying the transaction during the dunning window to see if the error self-resolves.

Through these efforts, combined with our Account Updater logic, Recurly merchants can recover an average of 7% of total revenue each month. 

Analyzing Invoice Declines

Analyzing the number of failed invoices vs. paid invoices month-over-month can help merchants identify a baseline for their overall failure rate. If customers are coming back after an invoice has failed, wanting to pay, this is a good indication that Dunning Settings need to be revisited to give customers either more time in the dunning cycle or more frequent communication methods. Merchants may also want to assess their invoice aging to see how long invoices take to collect, as well as to measure results from any dunning changes.

Recovered amount by retry comparison charts

When Transaction Declines Indicate a Need for a New Gateway

Recurly's success in recovering revenue depends heavily on the amount of detail a payment gateway provides in terms of transaction declines. Some gateways only provide roughly five different error messages, while others list over 200. The more detailed the error message, the better chance Recurly has to react to the specific decline reason. As a business grows, choosing a more verbose gateway may help drive revenue recovery.

Decline reasons on the last 30 days table

Analyzing Invoice Recovery

Every Recurly invoice contains an Invoice Summary export that includes a detailed list of all invoices that were at risk and how they were recovered: whether it was through account updater, a customer update, an automatic retry, or several other reasons. By reviewing this report, a merchant can start to understand where their recovery efforts are succeeding and where they might need to be improved. 


When transaction declines are high, Recurly demonstrates one of its main advantages: converting transaction declines into revenue with functionality that includes our account updater, customer communication, or card retries.