Each year, merchants across the U.S. lose out on hundreds of billions in potential revenue. Not from fraud. Not from chargebacks. But from something far more ordinary: declined card transactions due to insufficient funds (NSF).
These declines are often treated as dead ends. The logic seems simple, if a card is declined for lack of funds, the customer can’t pay. But that assumption is increasingly outdated. In many cases, these are good customers with temporary liquidity issues, mistimed billing attempts, or balances that fluctuate daily. The transaction fails, and the opportunity disappears.
A Hidden Cost With Massive Impact
Non-sufficient funds (NSF) is the leading cause of card declines in the U.S. Every failed transaction is a missed opportunity, and the impact adds up. Across the U.S. payment ecosystem, failed transactions cost businesses an estimated $300 billion in lost revenue each year. For merchants, that means lower conversion rates, broken checkout flows, and unhappy customers.
The Long-Term Cost of Inaction
When NSF declines are ignored, the damage adds up:
- Customers leave, when their payment fails, many don’t try again. They may feel frustrated or lose trust in the process.
- Sales are lost. These are people who wanted to buy, the failure to process their card means missed revenue that likely won’t come back.
- Marketing spend is wasted when checkouts fail.
- Resources go into failed retries and recovery attempts.
- The customer experience suffers, hurting the brand.
Over time, this leads to lower lifetime value, higher acquisition costs, and unreliable payment data. This isn’t just about systems and operations. It affects the bigger picture of how merchants grow and keep their customers. It’s avoidable, and costly not to fix.
How Can Merchants Avoid NSF?
Insufficient funds aren’t the same as an unwilling customer or a fraudulent transaction. These are often people who intend to pay but don’t have enough in their account at that moment. Declines that happen just before payday or right after another recurring charge are usually about timing, not intent. Treating these as final misses the bigger picture. It leads to lost revenue and damages the customer relationship.
There are ways to act on this. Merchants can treat these transactions instead of automatically declining them by using Kipp’s technology to offer compensation to the card issuer for approving a high-risk transaction before it gets declined.
Rethinking the Decline
NSF-related declines are easy to miss, but they come with real cost. These failed payments affect both revenue and customer relationships. Many are avoidable with the right approach. Kipp helps merchants spot these opportunities and act on them, instead of letting them go.
Addressing this blindspot can unlock meaningful value. Ignoring it means taking on silent losses, again and again. Contact us to learn more.
