Q: Hi I've got a question about rebills.

I’ve been selling various info products and supplements for over a year and rebills have been a part of our business model. We have some straight sale offers, but also push subscriptions to get the recurring revenue.

Our straight sale offers do well. But we’ve had trouble with conversions on subscriptions from the very start. People do sign up, but ongoing payments are an issue.

About 50% of our rebills are getting declined. When customers do sign up, we have a hard time keeping them onboard for more than 2 months. Another issue is that customers remain loyal until seven months later when we get a ton of chargebacks for every month they signed up.

We’re currently with Stripe. It seems to be working well but we’re always worried that one bad month will get us banned. Next month we plan to get a merchant account to ensure we can scale our business without the paranoia of being suspended by Stipe.

But before we do, how do we maximize conversions on our rebills?

A: When it comes to rebills you need to take a multi-pronged approach.

Here are some strategies we recommend to our clients.

First do an audit

Pull a decline transaction report of all rebilled orders. Sort them by country and then decline error message. It’s good to know your approval percentage by main country or market.

If your approval ratio is 90% in the US, but 75% in Canada, there’s things you can do to increase that. For example, set up auto-messages notifying Canadian buyers that the rebilling failed. They will either call you or you can encourage them to call their bank to authorize the transaction.

Find your merchant category code (MCC)

If you are assigned a direct response merchant category code by your payment processor, you may be suffering a little more with unnecessary declines than if you are in a more beneficial category like periodicals/newspaper for example. Due to Covid and the financial crunch business owners like you see sales suffering. That goes for both one-time credit card payments and rebill transactions. Therefore, consumers’s banks are declining transactions they feel are riskier (like direct response) more often.

Charge in local currency

For foreign transactions, ensure you are charging in local currency. Your settlement currency can be USD but charging in local currency will increase front-end and rebill conversions. Test your checkout page with an IP from your main foreign markets to see how it looks in other countries.

Get updated credit card details

Make sure you’re using Visa Account Updater and Mastercard Account updater. Most processors usually offer this, or you can sign up for it directly in your payment gateway. This allows you to update expired credit cards or a new card number automatically. The cost can be around US $0.25 per record, so it’s well worth it to save a rebill transaction.

Don’t wait 30 days to charge again

If your customer’s purchase is declined for insufficient funds, try another charge attempt the next day for a smaller amount. For example, if you’re rebilling for $39.99 and it declines, try to charge $9.95 the day after the declined transaction to keep your customer in the rebill loop. This will hopefully keep them in your subscription program in order to help convert them at regular price next month.

If you do this, send an original invoice via email congratulating him/her on qualifying on this special promo. This will bypass any confusion when they see their credit card statement (brownie points for you for saving your customer some extra dough).

If you prefer to charge the full price for the subscription, schedule your leftover rebill charge for the first few days of the month. Most people pay their bills at month-end and have increased credit capacity the first couple of days of the month so you will have better odds of collecting at that time.

Get a merchant account and a different MCC

Once you get your own merchant account (try to get a different MCC than the one you were assigned by Stripe or your current payment gateway). You can then route your declines from Stripe to your new payment processor so you can try them on a different account. If you do this, remember that your customer data needs to be vaulted. This will allow you to pass the credit card info from Stripe to another gateway safely and compliant with PCI. Don’t forget that your CVV flag must be turned off on in your payment gateway, as rebills don’t have stored CVV code numbers.

Try adding ACH

Finally, add automated clearing house (ACH) to your payment arsenal. Some customers prefer not to add another expense on their credit card. And, with ACH you can also do rebills, it is not for straight sale products only. It’ll cost you under 1% in processing fees. That’s huge savings compared to Stripe or other credit card payment fees. It’s important to note that if you do ACH in the US, you need to keep funds within the borders, so this will only work with US domestic buyers or subscribers.

If you’re getting a merchant account, you can probably include ACH as an add-on payment option. I hope I provided some creative suggestions on how to maximize rebills.

Good luck and let me know if you have any success with these strategies.

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