Meaning of a Declined Quantity Credit Card Settlement Report
- The settlement report is a document that businesses create when they accept credit cards from customers. In addition to recording the transaction itself, the company also prints out a settlement report that details all the credit card transactions for the day. Accounting software typically allows businesses to make these reports automatically, and businesses often make and file them at the end of every day to keep consistent and reliable records for their accounts receivable department.
- On the settlement report, there's typically a section called declined amount, declined quantity or something similar. This is the section that separates out credit card payments that were not actually made. A credit card transaction must be confirmed by a participating bank, which then releases the funds and transfers them to the merchant that's making the sale. The declined quantity section shows the money the business lost because the bank declined to release funds for credit. Businesses want to keep the declined quantity as low as possible.
- Banks decline credit card purchases for a number of reasons. A business may see a declined quantity because the cardholder has exceeded the credit limit for the card without realizing it. Even if the card is declined before the transaction can be completed, systems may still log a report on it for business records. Other banks may be involved in collection problems with the cardholder and choose to automatically decline all other credit purchases until the debt is paid off. Customers can also initiate these refusals themselves by calling the bank and stopping the transaction for that particular purchase if they believe that they didn't receive the product or quality they paid for.
- Merchants that have a declined quantity in their settlement reports often count it as a business loss and move on, as this is the most economical method. However, if the purchase was large or there was no reason for the bank to refuse payment, the merchant can challenge the refusal by contacting the bank.