Category: Upsell

  • How to Prevent Declines on Your Upsells — Stripe Guide

    How to Prevent Declines on Your Upsells — Stripe Guide

    Stripe keeps declining your upsells, and you’re watching potential revenue slip away with every “do_not_honor” error.

    You’re not alone in this frustration. Hundreds of funnel builders using platforms like Systeme, ClickFunnels, and Shopify face this exact problem daily. Especially when their upsells trigger Code 59 fraud alerts.

    Let me share a real question I received this week that perfectly captures this issue:

    “I am pretty annoyed right now. About half of my upsells and bumps are declined in Stripe. (The front-end price is $7, bump is $17, OTO 1 is $49). They have the code do_not_honor, with many having a network_decline_code of 59 (which means suspected fraud). I use Systeme for my funnel. Has anyone found a way around these transaction declines?”

    This business owner experiences what thousands face: legitimate transactions getting flagged as fraud, killing conversion rates and damaging customer experience.

    The good news is you can fix this problem once you understand what’s really happening behind the scenes.

    IMPROVE YOUR ACCEPTANCE RATE

    Why Stripe Flags Your Upsells as Fraud

    Banks and payment processors use sophisticated algorithms to detect fraudulent activity.

    Unfortunately, many legitimate business models accidentally trigger these same fraud signals. Your upsell sequence might look perfectly normal to you, but it appears suspicious to automated fraud detection systems.

    You’re Not Vaulting Customer Data Properly

    When you don’t vault (encrypt and store) customer payment information between transactions, each upsell appears as a completely new purchase to Stripe and the issuing bank. This creates several red flags:

    • No CVV verification on subsequent charges
    • Different transaction fingerprints for each purchase
    • Missing continuity signals that indicate legitimate customer behavior

    Without vaulting, your front-end offer and upsell look like two separate people making purchases, rather than one customer buying multiple items. Banks interpret this pattern as potential card testing or fraud.

    Your Price Points Trigger Fraud Alerts

    Sub-$10 charges are classic markers of card testing fraud. Criminals often test stolen credit card numbers with small amounts like $1, $5, or $7 to verify the cards work before making larger purchases.

    When your funnel starts with a $7 charge and quickly follows with $17 and $49 within minutes, you’re mimicking fraudulent behavior patterns. The algorithm doesn’t know you’re running a legitimate business. It just sees the same sequence fraudsters use.

    Stripe Radar Uses Default Settings

    Most business owners accept Stripe’s default fraud detection settings without customization. Stripe Radar comes preconfigured for general e-commerce, but your specific business model needs different rules. These default settings often don’t account for:

    • Rapid sequential purchases in funnels
    • Low-ticket front-end offers followed by higher-value upsells
    • Digital product delivery models
    • Subscription or continuity billing patterns

    SET UP LEGITIMATE FRAUD ALERTS

    How to Fix Upsell Declines and Boost Approval Rates

    Declined transactions on upsells can kill your business. However, there are strategies to ensure upsells go through without a hitch.

    Implement Proper Payment Vaulting

    Use vault IDs for each upsell transaction so the system treats them as part of the same original charge. This creates continuity between purchases and reduces fraud flags. Most modern payment gateways support vaulting, but you need to configure it correctly.

    If your current platform doesn’t support proper vaulting, consider upgrading your payment stack. The revenue you’ll save from reduced declines often pays for better infrastructure within weeks.

    Optimize Your Pricing Strategy

    Raise your front-end price above $10-$20 to avoid the card testing price range. Test bundling offers to create higher-value initial transactions. For example:

    • Instead of $7 front-end + $17 upsell, try $24 bundled offer
    • Combine low-ticket items into single transactions when possible
    • Use psychological pricing that doesn’t trigger fraud thresholds

    Customize Your Stripe Radar Settings

    Adjust Radar rules manually in your Stripe dashboard based on your actual transaction flow. Don’t contact Stripe support about fraud settings. This can trigger account reviews or flags. Instead:

    • Review your decline patterns in Stripe’s analytics
    • Identify which rules cause legitimate declines
    • Adjust thresholds gradually to find the sweet spot
    • Monitor results and refine over time

    Combine Transactions Strategically

    Consider charging the front-end and first upsell as a single transaction. You can hold the card information using vaulting and settle after the customer accepts the upsell. If they decline, you only charge for the front-end offer.

    This approach reduces the number of individual transactions while maintaining the upsell experience your customers expect.

    CONNECT WITH A MORE POWERFUL PROCESSOR

    Platform-Specific Considerations

    We’ve spoken heavily about Stripe and Stripe Radar, but there are other popular platforms to consider and customize.

    Systeme and Basic Funnel Builders

    Systeme excels at quick funnel launches but lacks advanced payment routing and tokenization tools. It processes each charge as a standalone transaction, increasing fraud flag probability.

    If you’re scaling beyond $25,000 monthly revenue, consider upgrading to platforms with better payment infrastructure.

    ClickFunnels and Advanced Platforms

    Higher-tier platforms often provide better payment integration options, but you still need to configure them correctly. Many users accept default settings and miss optimization opportunities.

    USE A CUSTOMIZABLE GATEWAY WITH YOUR PREFERRED PLATFORM

    When to Consider Merchant Account Upgrades

    If your decline rate exceeds 10%, you’re losing immediate sales, damaging your payment reputation, and risking account suspension. High decline rates signal to processors that your business model might be risky, leading to:

    • Higher processing fees
    • Account holds or reserves
    • Potential account termination
    • Difficulty obtaining new payment processing

    Businesses processing over $25,000 monthly often benefit from dedicated merchant accounts with customized fraud rules and better approval rates.

    OPEN A DEDICATED MERCHANT ACCOUNT

    Take Action to Stop Revenue Loss

    Upsell declines don’t have to drain your profits. Start by implementing proper payment vaulting, optimizing your pricing strategy, and customizing your fraud detection settings.

    These changes often reduce decline rates by 30-50% within the first month.

    Monitor your results closely and adjust your approach based on real data. Remember that payment optimization is an ongoing process, not a one-time fix. The revenue you save from reduced declines will compound over time. That makes this effort one of the highest-ROI improvements you can make to your funnel.

    Your customers want to buy from you. Don’t let technical payment issues stand in the way of serving them and growing your business.

    IMPROVE YOUR UPSELLS WITH DIRECTPAYNET

  • Maximize Customer Retention by Mastering the Downsell

    Maximize Customer Retention by Mastering the Downsell

    You know the upsell and the cross-sell, but do you know the downsell? This sales method perfects the trifecta. It gives you the opportunity to not only retain customers but improve your product and bump your bottom line.

    Here’s all you need to know about the downsell, how to use it, and what to look out for.

    Secure your downsells with a powerful payment processor

    What is Downselling?

    Downselling is a sales strategy that offers a lower-priced version of your product to customers who are on the fence about buying. It can also apply to a scaled-down version of your product or service, like a downgrade.

    By presenting a downsell offer, you’re giving the customer another chance to say “yes” to your business. It also gauges interest in your business. If a customer accepts the downsell, then price-point might be an issue. That’s an opportunity to create a value package for similar customers.

    When to Break Out the Downsell

    So, when should you deploy this secret weapon? Here are a couple of prime opportunities:

    1. When a customer is about to cancel their subscription
    2. When a potential buyer is hesitant to pull the trigger on a purchase

    In these scenarios, a well-timed downsell can put you on the leaderboard.

    The Goal: Keep the Customer, Keep the Profit

    The goal of downselling is retaining the customer relationship and generating some revenue. Even if it’s not as much as you initially aimed for.

    Think of it this way: would you rather have a customer pay a smaller amount or nothing at all? Exactly! By downselling, you’re saying, “I value your business, and I’m willing to work with you to find a solution that fits your needs and budget.”

    That kind of flexibility and customer-centric approach can go a long way in building trust and loyalty. And who knows—that customer you downsold today could turn into a raving fan who upgrades to your premium offering down the road.

    So, embrace the downsell. It’s not a consolation prize – it’s a smart strategy for maximizing conversions and keeping your customers happy.

    Retain customers with DirectPayNet

    How to Implement Downselling: Best Practices

    Now that you’re on board with the concept of downselling, let’s dive into some best practices for making it work for your business. Implementing downselling effectively can be a game-changer for your conversion rates and customer retention.

    Offer a Simpler or Lower-Priced Version

    One key to successful downselling is having a product or service that you can offer at a lower price point. This could be a simplified version of your main offering or a pared-down package that still delivers value. By creating a more affordable alternative, you give hesitant customers a reason to say “yes” to your business.

    Leverage Exit Intent Popups

    This is how it usually happens: a potential customer is about to leave your website without making a purchase. Before they go, an exit intent popup appears, presenting them with an irresistible downsell offer. This well-timed message can be just the thing to change their mind and convert them into a paying customer.

    The cancellation funnel can be a golden ticket to customer retention. Don’t pass up the opportunity.

    Follow Up with Abandoned Cart Emails

    Sometimes, despite your best efforts, a customer will add items to their cart but fail to complete the purchase. Don’t let that sale slip away! Send a friendly abandoned cart email that includes a downsell offer. This personalized touch shows that you value their business and want to find a way to make it work for them.

    Provide Personalized Recommendations

    When a customer is unsure about a purchase, suggest alternative products that might better suit their needs or budget. By offering personalized recommendations, you demonstrate that you understand their situation and are committed to finding the right solution. This level of attention can go a long way in building trust and loyalty.

    Create Bundled Offers

    Another effective downselling technique is to create bundled offers at a lower price point. By packaging complementary products or services together, you provide more value to the customer while generating revenue for your business.

    Allow Subscription Plan Downgrades

    If you offer subscription-based services, consider allowing customers to downgrade to a cheaper plan instead of canceling altogether. By providing this flexibility, you show that you’re willing to work with them. Plus, by retaining them as a customer, you have the opportunity to nurture the relationship and potentially upsell them in the future.

    Risks of Downselling

    While downselling can be a powerful tool in your sales arsenal, it’s important to be aware of the potential risks involved. Like any strategy, downselling requires a thoughtful approach and careful implementation to avoid unintended consequences. Let’s take a closer look at some of the risks associated with downselling.

    Merchant Account Impact

    One potential risk of downselling is the impact it can have on your merchant account. If you rely too heavily on downselling or do it excessively, it could raise red flags with your payment processor.

    They may view a high volume of downsells as a sign of questionable business practices. This could lead to account scrutiny or even termination. To mitigate this risk, use downselling selectively and make sure it aligns with your overall business model.

    Setting Expectations for Lower Prices

    Another risk to consider is the potential for downselling to set a precedent for lower prices in the minds of your customers. If you consistently offer downsells, some customers may come to expect or even demand lower prices every time they interact with your business.

    This can make it challenging to maintain your desired pricing strategy and profit margins in the long run. To avoid this pitfall, use downselling strategically and make sure it doesn’t become the norm for every customer interaction.

    Brand Perception Concerns

    In some cases, downselling could potentially damage your brand’s perception. If customers feel like they’re constantly being offered lower-priced alternatives, they may start to question the value and quality of your main offerings.

    You need to strike a balance between providing affordable options and maintaining the integrity of your brand. Make sure your downsell offers still align with your overall brand identity and value proposition.

    Not a Long-Term Growth Strategy

    Finally, it’s important to recognize that downselling is not a sustainable long-term strategy for business growth. While it can be effective in retaining customers and generating some revenue in the short term, it shouldn’t be relied upon as the primary driver of your sales.

    Downselling should be used selectively as part of a larger, holistic sales strategy that focuses on delivering value, building relationships, and encouraging customer loyalty.

    Open a dedicated merchant account today

    A chart comparing and contrasting downsells, cross-sells, and upsells for direct response marketers.

    Downselling vs. Cross-Selling vs. Upselling

    While downselling is a powerful technique, it’s often used in conjunction with two other common strategies: cross-selling and upselling. Let’s take a closer look at each of these approaches and how they differ.

    Cross-Selling: Complementary Products for the Win

    Cross-selling involves encouraging customers to purchase related or complementary products in addition to their primary purchase.

    For example, if a customer buys a new smartphone, you might suggest a protective case or a pair of wireless earbuds.

    By offering relevant add-ons, you increase the overall value of the sale and provide a more complete solution for the customer.

    Cross-selling is all about anticipating the customer’s needs and offering products that enhance their primary purchase. When done effectively, it can lead to higher average order values and improved customer satisfaction.

    Upselling: Upgrading to Premium

    Upselling, on the other hand, is the art of persuading customers to purchase a more expensive version of a product or an upgrade to their existing purchase.

    For instance, if a customer is considering a basic subscription plan, you might highlight the benefits of upgrading to a premium tier with additional features and perks.

    The goal of upselling is to encourage customers to invest in a higher-value offering that better meets their needs. By presenting the advantages of the upgraded product or service, you can boost revenue while delivering more value to the customer.

    Downselling: Keeping Customers in the Game

    In contrast to cross-selling and upselling, downselling involves offering a cheaper alternative to customers who are hesitant to make a purchase or are considering canceling their subscription. The primary objective of downselling is to retain the customer and secure a sale, even if it means accepting a lower price point.

    Downselling is a strategic move that prioritizes customer retention over immediate revenue maximization. By providing a more affordable option, you give customers a reason to stick with your business rather than walking away entirely. This technique can be particularly effective in situations where a customer is price-sensitive or unsure about committing to a higher-priced offering.

    While cross-selling and upselling focus on increasing the value of a sale, downselling aims to preserve the customer relationship and generate some revenue, even if it’s not the optimal amount. Each of these strategies has its place in a well-rounded sales approach, and the key is to use them judiciously based on the specific needs and preferences of your customers.

    Protect your bottom line with DirectPayNet

    How Downselling Fits Into Your Sales Funnel

    Now that we’ve explored the ins and outs of downselling, let’s take a step back and look at the bigger picture: how it fits into your overall sales funnel. By strategically incorporating downsell offers at key points in the customer journey, you can optimize your conversion rates and guide more prospects towards a purchase.

    The Role of Downselling in Conversion Rate Optimization

    At its core, downselling is a powerful tool for conversion rate optimization (CRO). When a potential customer is hesitant to make a purchase or about to abandon their cart, a well-timed downsell offer can be the nudge they need to convert. By providing a more affordable alternative, you reduce friction and make it easier for the customer to say “yes” to your business.

    This technique allows you to capture sales that might otherwise be lost, thereby improving your overall conversion rates. It’s a way to meet customers where they are and provide a solution that fits their needs and budget.

    Placing Downsell Offers at Key Funnel Stages

    Maximize the impact of downselling by presenting offers at strategic points in your sales funnel. Two key stages where downselling can be particularly effective are:

    1. Checkout: When a customer reaches the checkout page but seems hesitant to complete their purchase, a downsell offer can be the perfect solution. Perhaps they’re unsure about the price or the full scope of the product. By offering a more affordable or streamlined version right at the point of purchase, you can convert that hesitant buyer into a paying customer.
    2. Post-Purchase: Downselling doesn’t have to stop after the initial sale. In fact, the post-purchase stage is a prime opportunity to present downsell offers to customers who may be considering canceling their subscription or returning a product. By offering a lower-priced alternative or a modified package, you can retain those customers and prevent them from churning.

    By integrating downsell offers seamlessly into these key stages of your sales funnel, you can create a more customer-centric experience that meets buyers where they are and guides them towards a purchase.

    Using Downselling to Advance Customers Through the Funnel

    Downselling isn’t just about securing a one-time sale; it’s also a way to move customers further along in your sales funnel. When a prospect accepts a downsell offer, they’re not only converting into a paying customer but also demonstrating an interest in your business and its offerings.

    This presents an opportunity to nurture that relationship and guide the customer towards higher-value purchases in the future. By delivering a positive experience with the downsold product or service, you can build trust and loyalty, setting the stage for potential upsells or cross-sells down the line.

    Downselling acts as a bridge, helping customers cross the chasm from consideration to conversion. By meeting their needs in the moment, you’re opening the door to a longer-term relationship and the potential for greater lifetime value.

    OPEN A DIRECT RESPONSE MERCHANT ACCOUNT

  • 3 Upsell Techniques that Seriously Boost Conversions

    3 Upsell Techniques that Seriously Boost Conversions

    We’re talking at least 5%. And from the clients we work with, that result is all but guaranteed.

    Here’s the deal: you’re a business owner whose front-end is converting. The easiest way to increase your average order value (AOV) is by taking advantage of upsell opportunities. Sounds simple, right?

    Not so fast. The tips we’re about to lay on you are for merchants who have acceptable take rates but still get declined transactions (or customers can’t buy the upsell).

    What gives? That’s exactly what we’re getting into, and if you take our 3 tips to heart we can (almost) guarantee an uptick in conversions.

    These upsell techniques work on existing customers and new customers, alike, to increase sales, boost conversions, and improve your bottom line, and are geared toward e-commerce site owners.

    If you’d rather watch this, you can by heading to YouTube, or you can listen to it on the go right here.

    Preface: Terms You Should Know

    Before we get into our tips, here are some terms you ought to know.

    What is an upsell?

    An upsell is when you offer other products or services to your customers that will increase their shopping cart value.

    An upsell conversion rate is how often a customer make purchases above their initial front-end purchase (the product they initially intended to purchase). Improving the customer experience will improve the upsell conversion rate, as well as prevent cart abandonment and increase website visitors.

    Why is upselling important?

    Simply put, it’s important to use upselling to increases your revenue. It also helps customers understand the products you offer and can build a strong relationship between them and your e-commerce business, increasing retention.

    A sense of urgency comes with the territory of upsells. It’s something you can use on your product pages, checkout page (post-purchase), email marketing, and with special offer pop-ups.

    What’s the difference between upsell and cross-sell?

    Upselling is when you encourage your customers to buy a higher-end version of the product they’re interested in. Cross-selling is when you entice customers to buy related products that complement their initial purchase.

    Both involve optimization of the customer journey through checkout, but are inherently different things.

    You can think of it like this:

    A customer buys a pair of cotton socks. You can upsell a higher quality version of a product like wool socks, and you can cross-sell a matching pair of gloves. The upsell offer is always a higher value similar product while the cross-sell is more like additional product recommendations that go well with their purchase.

    Upsell = better product. Cross-sell = add-on product.

    What does “take rate” mean?

    The take rate is the rate of acceptance by your customers. In this case, the take rate applies to upsells. It means how much your customers want the new product(s) you’re upselling; how often they take the upsell.

    Tip 1: Know Your Data

    Yeah, we know you’re rolling your eyes at this one. BUT hear us out.

    Most of the people we do mandates for—we’re talking 9 out of 10 people—quote incorrect data to us. So, in our experience, if 90% of you are looking at your data incorrectly, then you can’t possibly succeed in the upsell.

    Figure out your approval rate for each upsell.

    The easiest way to get the data you need to understand your upsells is:

    –       Have a different price point for each upsell.

    –       Grab a CSV file from your payment gateway.

    –       Sort by price point and approval message.

    You need to have access to your gateway to do this. You can email your gateway or merchant services provider and ask for access/a CSV for the previous months’ worth of transactions. Or maybe you need to get a new gateway (which could mean opening a new merchant account if you use aggregators like Stripe).

    When you’ve sorted the data, you’ll see clearly how many transactions you’ve had, how many were approved, and how many were declined.

    From this list, you’ll see what’s gone through and what hasn’t as well as issuing bank declines. For bank declines, look out for “do not honor” and “code 05”. These, specifically, indicate the transaction cannot happen because the bank is declining it.

    Knowing your issuing bank declines will add more conversions.

    The cardholder’s bank (also known as the issuer or issuing bank) decides which transactions are too risky, and your MCC might be to blame.

    Tip 2: Know Your MCC

    MCC stands for Merchant Category Code. It’s a code every single merchant is assigned, whether you’re an e-commerce store using a merchant account, Stripe, PayPal, etc. or a brick-and-mortar retailer.

    The category you’re assigned affects:

    –       your approval ratio,

    –       what you’re paying,

    –       processing services,

    –       and a whole lot more.

    Different MCCs carry different levels of risk and different levels of tolerance.

    Here’s an example:

    If you’re a supplements merchant, you might be assigned the MCC 5968. This is a direct response code. Because of this code and the nature of your business, ticket sizes over $100 will likely be declined by the cardholder’s bank.

    The bank sees your code and immediately knows that direct response merchants have a higher risk of chargebacks and disputes. They don’t want to deal with that. So what happens next? They decline the transaction.

    What can you do about it?

    There are a couple of options.

    Drop your prices below $100. This only works if you’re selling products that hover just above $100. When you drop your price, you’ll see your take rate increase and your approval rate increase.

    Choose a different MCC. This one’s a bit trickier. Some providers are willing to change your MCC, but most aren’t. The best way to go about this is opening a new merchant account and selecting a different Merchant Category Code. Not all merchants can nestle into multiple MCCs, though, so don’t test your luck if that’s you.

    Stagger your upsells. You can charge each upsell separately from each other and the initial front-end sale.

    These options can work for other merchant types, though they are specific for direct response. You really need to understand your data, such as the maximum charge before a bank declines the transaction, in order to maximize the potential.

    Tip 3: Stagger Charge Your Upsells

    This upselling strategy deserves its own section because it’s actually more than a way to decrease bank declines.

    Let’s start with an example (sticking with direct response merchants):

    A customer is on their way to buy a $67 front-end product and your first upsell is $30. That’s great; you kept the price below $100 so banks shouldn’t decline it. Charge that front-end purchase and first upsell right away.

    But what if you want to push multiple upsells? It’s encouraged to have a second, third, or even fourth upsell. The trick is to stagger charge those following upsells to prevent your transaction approval ratio from decreasing (even if the take rate is high).

    Charging multiple upsells too fast decreases your approval ratio.

    This is because the bank is seeing you hit the customer’s card 3 or 4 times in a very short period of time. This makes banks nervous because, since credit cards were designed for the physical world, if the customer was at a physical store, then they’d only receive one receipt for everything. It’s suspicious.

    Stagger the 2nd and 3rd upsell charges by at least 24 hours (though not more than 48).You know the card is good because you’ve already successfully charged the front-end product and first upsell. It makes sense that the charge won’t get flagged because, again since credit cards were designed for a physical world, it’s logical that someone would visit the same store multiple days in a row.

    Some gateways have built-in functionality to help you stagger charge your upsells.

    You don’t have to do a single authorization. You’ve already processed the payment, it went through without a hitch, and the payment gateway uses this data to help you upsell products.

    NOTE: If you sell a physical product, don’t ship it until after the upsell charges go through.

    It’s not always about the quality of the upsell. Instead, it’s about how you charge your customers.

    Getting the customer to your online store is only part of what goes into successful marketing. The last leg falls on you, as the merchant, getting that customer through the buying experience.

    To do that successfully, you need to know transaction data, have the tools to ensure each customer buys everything the intended to, and have a cart page that promotes upselling.

    Get in touch with the team here at DirectPayNet about payment gateway access and switching your MCC. We’re here to help.