Subscription Decline Rates

The hope with every new subscription signup is a long-lasting, mutually beneficial customer relationship.

The reality is that sometimes things go sideways from the very first billing attempt. Subscription-based companies rely on recurring charges to keep their revenue streams flowing, and high payment decline rates can pose a serious problem.

  1. Decline Rates by Industry
  2. Chargeback Reason Codes by Industry
  3. Decline Codes by Industry
  4. 2021: A Year in Subscription Declines
  5. How Can Subscription Merchants Prevent Declines?
  6. Conclusion

The global subscription economy is expected to reach $275 billion this year, and Juniper Research predicts that it will grow by 200% over the next four years.

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This is good news for subscription merchants, but with a higher sales volume comes higher rates of payment issues, including credit card declines and chargebacks.

With declines, at least, you have a customer who is presumably still interested in your services, and when the issues that lead to declines can be prevented or quickly corrected, the customer relationship can often be salvaged.

The best way to achieve this is to understand why declines occur, how they impact your industry, and what actions you can take in response to them.

In partnership with Juniper Research, Chargeback Gurus has published a whitepaper on payment challenges in the subscription market, which includes research, statistics, and insights into decline rates across various industry sectors. Here’s the inside scoop.

Decline Rates by Industry

Subscription services are widely used across a wide range of verticals, from enterprise-scale SaaS solutions to niche subscription box services. Digital goods (video, music, podcasting, and audio books) take up the lion’s share of the market, nearly 55% of all subscriptions. The next largest category is physical goods, followed by multiservice subscriptions, video games, and other services.

What all of these varied merchants have in common is that there will be times when they try to charge a customer’s card-on-file and it will get declined. However, this is not a problem that afflicts all industries equally:

  • TV, Video, and Gaming services have the highest decline rate, 9%.
  • Next is Sports and eSports at just over 7%.
  • Publishing and eLearning, Health and Wellness, and Home and Web Security were in the middle range.
  • The lowest decline were in Finance and Business (about 1.5%) and Telecom and Mobile (only 0.2%).

This makes sense as telecom companies have the some of the longest histories of working with subscription-based billing models, and making sure their phone is paid up and active is usually a high priority for most consumers. On the other hand, media and gaming subscriptions may be entered into more impulsively, or by a cardholder’s family member, and consequently given less attention.

Decline Codes by Industry

The data also shows a breakdown of which reason codes each industry sees the most of. Here are the top decline codes for each category:

Finance and Business Do Not Honor, Insufficient Funds
Health and Wellness Do Not Honor, General Decline, Credit Floor
Home and Web Security Do Not Honor, Credit Floor, Insufficient Funds
Publishing and eLearning Do Not Honor, Credit Floor, Lost/Stolen
Sports and eSports Not Authorized, Pending at Merchant
Telecom and Mobile Do Not Honor, General Decline, Invalid Number
TV, Video, and Gaming Credit Limit, General Decline

Unfortunately, general decline codes and Do Not Honor responses don’t tell a merchant much about why a card couldn’t be charged. This makes it difficult to analyze the situation and determine how to prevent similar declines from happening in the future.

Learn How To Fight Them The Smart WayThe most informative decline codes that show up frequently are Credit Floor and Insufficient Funds. The latter is particularly widespread in the Finance and Business category, accounting for nearly 45% of all declines.

2021: A Year in Subscription Declines

Subscriptions involve payments spread out over time, so it only stands to reason that the timing of billings can have an impact on declines and other payment issues. Data for the full year of 2021 shows some fluctuations in decline rates that may be significant to some merchants.

In 2021, the consumer economy was still dealing with the impact of the COVID-19 pandemic, but payment approval rates stayed fairly high and consistent for most industries over the course of the year.

The most noticeable spikes in decline rates occurred in the Health and Wellness, Sports and eSports, and TV, Video, and Gaming sectors.

  • Health and Wellness declines went up by nearly 10% in November, only to recover the following month.
  • Decline rates for Sports and eSports climbed through the summer to reach a September peak of 12%. By the end of the year, they were almost back to normal levels.
  • TV, Video, and Gaming, with the highest overall decline rates, had an especially rough time in April and late summer. September saw their highest approval rates—just over 93%.

Not every merchant will experience seasonal decline spikes, and 2021 could be an outlier year, but it’s worth taking the time to analyze your own data and look for consistent patterns.

How Can Subscription Merchants Prevent Declines?

Some declines are inevitable, but many are not. An inattentive subscriber who lets their payment lapse might not feel motivated to sign back up, but if you can maintain continuity of the subscription by preventing the decline, they might be perfectly happy to stay on board. Here are a few ways to do that:

  • Send reminders when appropriate. Monthly payment reminders may not be necessary, but for customers who get billed on an infrequent or annual basis, they are a must.
  • Make sure your MCC is accurate. Different merchant categories may be subject to different approval rules. Make sure your MCC is correct, or you could be getting hit with entirely avoidable declines.
  • Use an account updater service. Providers such as Visa can automatically update expired payment card information with subscription merchants.

Most importantly, keep analyzing your decline code data to ensure you aren’t missing any new or unusual activity.


It’s important for subscription merchants to understand their decline codes, but in the end, there’s only so much they can tell you. To really maximize your approval rates, it may be necessary to partner with service providers with a high degree of experience dealing with declines and other payment issues in your industry.

The subscription market is highly competitive, and customers who get bounced out of one service due to payment issues may swiftly get picked up by another company, never to return.

Analyzing your decline codes, working with a trusted partner, and addressing your payment issues can reduce customer churn and protect your revenue.

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