Are you shopping around for an online donation processor? Is your primary criteria low transaction fees? If so, you’re not alone. Most nonprofit organizations focus on keeping costs down to maximize donations. While transaction fees should be considered when choosing a processor, these fees are actually only a part of the equation, especially when dealing with recurring gifts or subscriptions. In fact, while it might appear that you are saving money with lower transaction fees, your organization could actually be losing a significant amount of money due to failed transactions. In order to be confident that a donation processor will take the steps necessary to ensure your gifts are processed successfully, ask these two key questions:
What type of methods do you use to recover failed transactions?
Let’s say you have a donor who has setup a recurring gift to be processed on the first of every month. However, a few days before his gift was scheduled to process, he made a large purchase on his card, which did not leave enough available credit to successfully process his donation to your organization, and thus, the transaction failed. Without recovery methods in place by your processor, you would lose this gift in it’s entirety. So while it is wise to get the best pricing overall, you must consider this cost in the equation as it can easily outweigh transaction fees if your organization receives a good number of recurring gifts.
In order to be sure your online donation processor is able to proactively help in a situation like the one described above, ask them what type of recovery methods they use to proactively reduce the number of card failures. And when a transaction does fail permanently, ask what measures are taken by the processor to alert all parties involved and recover future gifts in the series.
What kind of efforts are taken to remind donors to update card expiration dates and replace outdated card information?
Suppose a donor’s card expires, and a recurring transaction fails because the expiration date has not been updated by the donor. Ask your potential payment processor what type of reminders are in place to encourage the donor to update their card information. How simple or complex is the process for the donor? Similarly, if a donor reports their card as lost or stolen and receives a new card in the mail, what type of efforts are made by the processor to alert the donor to the need to update their credit card information for the associated gift?
At ServanTek, we have made significant advancements in the area of recovering failed transactions, and we’re still working to make even further progress. Check out the video below to learn more.
Have you considered how many donations you could be losing as a result of failed transactions? Let us know in the comments below.
If you work for or know of a nonprofit organization who could use some help in this area, give us a call at 845-218-7180 to learn how ServanTek can help.