When good credit cards go bad

14Jan08

Every few years, I go through the tedious ritual of contacting all the companies that have my credit card number on file, and providing them with a new expiration date for the card. You see, the credit card issuers somehow think it makes everyone safer if a card is only good for say 3-5 years. To achieve this dubious benefit, both personal and business cardholders get saddled with the burden of updating their card info regularly. Since this situation probably won’t be changing any time soon, I’d like to propose some ways that businesses can make it easier on their customers.

Whether your card is stored for future purchases (like at Amazon) or used for an automatic charge every month (like at Netflix), the problem is the same. Somewhere along the way, you have to login to your account and update the credit card info. The situation is even worse when you’ve forgotten the login information for a site and have to expend extra effort to get into your account. Since customers typically have to jump through hoops to update their billing info, there’s a good chance they’ll give up or forget to do it. Once the old card stops working, you’ve just lost a customer (unless you like giving away products for free).

There’s no silver bullet to solving this, but we can do much better than the status quo. For starters, a few months before someone’s current card expires, email them about it or show an alert when they login to the site. This makes them aware that the card needs an update. Second, don’t require someone to login just to update their credit card. Instead, provide a way for customers to enter their existing credit card number and expiration date even if they don’t remember their username or other info. Then, if that card matches one that you have on file, let the customer complete the update right then and there. To allay any privacy concerns, this process would only be used to update key billing info like the credit card number, expiration date, and billing address. No other account info would be shown, nor could you edit things that aren’t critical for processing a credit card charge.

Think about it: Do you remember every website login that you created since your credit card was issued? I certainly don’t. By adopting the approach I described, you can help customers give you the info you need, and reduce attrition due to expiring credit cards.



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