It only takes one embarrassing, stressful experience with a declined benefit debit card to undo all the good will you created by offering the convenience of debit card payments.
In 2017, 12% of Americans had a debit card or credit card declined.1 It’s never fun. And it can happen to anyone. In 2014, then president Barack Obama had a card declined when he tried to pay for a dinner with first lady Michelle Obama. Talk about awkward.
In the case of the former president, the problem was a credit card he hadn’t used for a long time, which got tagged as a possible attempt at fraud. With debit cards, including FSA, HSA or HRA account cards, the culprit more often is that the holder neglected to activate the card before using it. But for 32% of the people who had card declines in 2017, the cause was the same, and arguably the most embarrassing: insufficient funds.2
Generally, the financial consequences of a declined benefits card aren’t lasting—it usually won’t affect the cardholder’s FICO credit score, which is the standard benchmark for home mortgages and auto loans. But when a declined card is part of your benefits program, it can do lasting damage to an employee’s satisfaction with the benefit you’re offering. Consider that each year, about 89 million Americans visit urgent care clinics3 and pharmacies fill about 5.8 billion prescriptions.4 Many of those expenses are paid for with a benefits card. If it doesn’t work, that employee’s view is that the card has failed at its fundamental purpose: to provide a dependable, hassle-free way of paying for covered expenses.
Combine an unplanned or urgent medical need with a benefits card that won’t work due to depleted funds (because the employee forgot to replenish it or is living paycheck to paycheck) and a bad day can get worse in a hurry—especially if there isn’t an alternative means of payment handy.
It only takes one embarrassing, stressful experience with a declined benefit debit card to undo all the good will you created by offering the convenience of debit card payments. And although you didn’t cause the problem, you’re sure to be the one who hears complaints.
The answer is to make sure that when your employees use their cards, they aren’t declined because the balance at that particular moment happens to be insufficient. That’s where a feature called Card Decline Protection comes in.
Here’s how it works: Employees who opt in connect their bank accounts to a system. If an overdraft purchase happens, the plan administrator automatically covers the overdraft and floats those funds until they can be replenished, even if the employee’s bank balance isn’t sufficient to cover the expense.
Benefits like HSAs and HRAs offer convenience and help both you and your employees save on taxes. But the success of those benefits depends on how well they work. With Card Decline Protection, you’ll have happier employees and a competitive advantage when it comes to recruiting new talent.
Sources:
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“12% of Americans had a credit card declined in 2017,” USA Today, March 2018: https://www.usatoday.com/story/money/personalfinance/budget-and-spending/2018/03/09/12-of-americans-had-a-credit-card-declined-in-2017/111101022/
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Ibid
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"What’s behind the growth of urgent care clinics?” Medical Economics, August 2018: https://www.medicaleconomics.com/business/whats-behind-growth-urgent-care-clinics
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“US Prescriptions Hit New High,” Medscape, May 2019: https://www.medscape.com/viewarticle/912864
