Spring is here, filling gardens to the brim with beautiful flowers. But even the most peaceful garden is constantly disrupted by the threat of weeds. Seasoned gardeners know the truly damaging part of weeds is not how they look above the surface, but their negative impact underneath the soil.
Similarly, payment declines disrupt your day-to-day. And if you think of them like weeds, the total cost of their burden goes deeper than you might realize. The reality is, under the surface, payment declines are costing you a lot of money. Continue reading to learn the ways payment declines are sucking up resources, and get some tips to weed out payment declines so you can have a thriving, bountiful business.
What Are the Hidden Costs of Payment Declines?
Your staff is likely spearheading the brunt of the work tracking down payment declines from your monthly membership billing. This is a time-consuming process. Let’s say you have 46 declines a month. Tracking down these declines will average about 17 staff hours per week to resolve. At $15/hr that means the entire year tracking down and resolving declines will cost your business $13,260. This is top of the money you didn’t collect from those declines in the first place.
Another consideration in what declines are costing you is how they affect membership. In fact, 1 in 3 declines results in a membership termination. Staying with the 46 declines a month, that ends up with 13 terminations a month or 156 terminations each year. Keep in mind these terminations are for an entirely avoidable issue. If these membership dues average $50/month, this totals $7,800/year in lost revenue simply due to avoidable declined payments.
In addition to labor and membership costs, you may be using a payment service that charges fees for declined payments. This is usually between $.06-$.10 per decline. Sticking with an average 46 declines a month, this will mean about 552 declines per year, totally $55.20 in fees. While minimal, it still an annoying and avoidable annual cost to your business.
What is the Solution?
Fortunately, you don’t have to spend an average of $20,000+ each year resolving these declines. The majority of declined payments are due to inaccurate account information. Card account updaters automatically update member information to avoid these declines. For instance, to take an extra step for you, the Gains full-service billing team will track down and resolve any remaining declines for you, saving your money and giving back valuable time for your staff to engage your members.
Partner with Gains
Connect with a payments specialist today for a custom payments report and learn how Gains can help you weed out declines and enter spring with a more bountiful business.