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Why has a member's Direct Debit payment failed, and what action can I take?
Why has a member's Direct Debit payment failed, and what action can I take?

Direct Debit Payments may occasionally fail, here we explain why they may fail and what action you can take

Updated over a month ago

It can be a source of frustration when your members do not successfully make a scheduled Direct Debit payment. Thankfully this is typically less than 2%, and Direct Debit is still the most successful and cost-effective recurring payment method to build up a "rain or shine" recurring revenue for your business.

There are two main reasons this can occur, a cancelled mandate or a refer-to-payer-(insufficient funds) unpaid outcome.

Reason 1 - The member has cancelled their Direct Debit mandate with the bank

When a member cancels their mandate, this will appear as a notification on your dashboard. This does not mean they have yet missed a payment, as they may have paid you on the 1st of the month, and cancelled their Direct Debit instruction on the 5th, so they won't yet be overdue unless action is taken!

However, if they cancel close to the next scheduled payment, a payment will be missed, again, action is needed by you to get them back on track.

How can I check this?

1 - Keep on top of your dashboard notifications

2 - Check your "unpaid" tile on the main dashboard

3 - Visit the member profile, then the "Payments Tab". For a member that has cancelled, you will see a "Suspended" message if this is a recent action, or a message there is no DD mandate in place:

"There is currently no ClubRight Pay mandate in place" means the DD was cancelled more than 2 weeks ago, or the mandate was never set-up:

"The mandate for this member was suspended" means a recent DD cancellation:

How to resolve a cancelled mandate:

Important - Firstly, you must talk to the member to seek an active confirmation that they want to continue to pay by Direct Debit. The member has taken the decision to cancel a Direct Debit which is their right under UK payment regulations, and you must have a payers permission to reinstate or set-up a new DD mandate.

Once you've elicited the permission, then click to "Reinstate Mandate" and you'll then be prompted to enter the members sort code, account number and bank account name. This will be verified live against the banks online verification system. If it fails at this point, please check and re-enter.

Once this is done, you may be prompted to "collect a one-off" payment to recover any overdue funds.

Reason 2 - The member had insufficient funds in their bank account on the day of collection (also known as a "refer-to-payer" failure)

This is the second-most common reason for a Direct Debit failure. Remember, this is not the same as cancelling a DD mandate, where the member has taken a positive action to stop Direct Debit payments, this is typically a temporary issue with a member's lack of funds. The mandate will still be available for future collections.

How can I check this?

1 - Keep on top of your dashboard notifications

2 - Check your "unpaid" tile on the main dashboard

3 - Visit the member profile, select "edit" against the current active membership plan, and then the "Payments Tab". For a member that has seen an insufficient funds failure you will see the wording "Failed Refer to Payer"

How to resolve an unpaid DD due to insufficient funds?

For Clubright Pay users, we will automatically make reattempts!

We will make up to 3 reattempts to recover the unpaid fees, without you having to lift a finger. You can see this in action, as there will be a "Failed Refer to Payer" showing intially and then a "requested" payment attempt pending:

The reattempts will be made 5 days after the failure notification

Can I stop the reattempt, and take the payment by another method?

If you see an N/A next to the request, this means you CANNOT now stop the attempt, the bin is Not Available for use as the reattempted payment, has already gone to the members bank. Taking payment by any other method is now blocked to avoid duplicated payments occuring.

If the Bin symbol is showing without an N/A, you have time to stop the reattempt and take a payment via the till or other means.

Finally....

It can sometimes happen that your member says they did have sufficient funds or they have not cancelled the mandate! In these cases, do not argue, simply say that the members bank has told our Direct Debit provider, that the mandate was cancelled, or that there were not sufficient funds, and if the member disagrees with this, then politely ask them to talk to their bank to ask why the bank delivered such a message.

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