The Numbers Guy Looks at Processing Expired Credit Cards

Can Your Monthly Pass Program Benefit from Processing Expired Credit Cards?

 

 

If you are like most car wash operators, you have worked hard to build the number of monthly pass customers. It is a revenue stream that you have come to rely on each month, and helps you sleep better during times of poor weather patterns.

Still, it probably bugs you that you lose a number of customers each month due to expired credit cards.

The typical credit card expires 3 to 5 years (36 to 60 months) after it is issued. That means, on average each month you could lose between 1.7% and 2.8% of your recurring charge monthly pass customers due to expiring credit cards if nothing is done to retain those customers.

One car wash operator who uses SiteWatch works very hard to retain his monthly pass customers. His cashiers ask the customer for a new credit card if they see that it is expiring. At the Xpress Pay Terminal® for self-pay sites, the customer is prompted to swipe their new credit card if their old one is expiring or expired. Using these retention methods, this operator has been able to cut his losses due to expired cards to half of the mathematical average. But, he asked DRB Systems for ideas to reduce it even more.

When researching that question, we found that some card issuers (the folks who issue the credit card to the customer and who ultimately approve/decline the charge request) will approve a charge request even when that credit card is expired. Therefore, in SiteWatch 2012, we introduced a new feature that submits expired credit cards for monthly recurring charges to the card processor.

After SiteWatch 2012 was installed, we compared 5 months of data to the prior year. We chose to compare to the same month in the prior year because some months appear to have more credit cards expiring than others. In the analysis, we saw an immediate reduction in the percentage of monthly pass customers lost due to expired credit cards once the new version was installed.

What makes these results exciting is that the operator did not have to do anything different. Simply by installing SiteWatch 2012, the new feature took over and reduced his recurring monthly pass attrition. Digging into the data more deeply – that’s in another study – we find that most of these customers will eventually rejoin. Yet, they leave a gap in revenue in the days between when they are dropped to when they rejoin.

This new SiteWatch 2012 feature is truly a win-win situation. For the customer, their ability to get a car wash on their monthly pass continues uninterrupted. For the car wash operator, he is maintaining higher revenue and is providing a better car wash experience for his customers.

Harold Guthrie, denizen of the digital world, is the DRB Systems numbers guy. A graduate of the University of Akron with a degree in mathematics, Harold toiled for IBM before he came to our company in 1994. A consummate numbers guy, he has conducted numerous engineering studies on a wide variety of SiteWatch products. When it comes to figuring out the meaning of figures, Harold is clearly our number one choice. He can be reached at 800-336-6338.

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