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As a merchant, you may occasionally see failed transactions marked as “05: Do Not Honor”. For ecommerce companies in particular, it’s one of the most common reasons for unsuccessful payments, but what does “Do Not Honor” actually mean?
In this article, we’ll cover everything you need to know about the “Do Not Honor” bank code, explaining why it happens, how your business should respond, and how to optimize your payment authorization rates.
What does “Do Not Honor” mean?
The 05 "Do Not Honor" message means the customer's bank has declined a transaction. This message is usually sent back to the merchant or service provider when a customer attempts to make a purchase online or complete a transaction using their debit or credit card, and the bank has refused to authorize the payment.
There are several reasons why a bank may send a "Do Not Honor" message, including insufficient funds, suspected fraudulent activity, or a hold on the account due to suspicious activity or past delinquency. Some banks send more granular response codes. 05 is a generic response code that may be used (particularly by banks with limited technical expertise) as a catch-all for the more granular codes.
This can have several implications for you, the merchant, depending on the nature of the transaction and the reason for the decline.
For example, if the decline is due to insufficient funds in the customer's account, you won’t receive payment for the transaction and may need to chase the customer and ask them to use an alternative payment method.
If the “Do Not Honor” bank code is due to suspected fraudulent activity, you’ll likely need to take additional steps to verify the identity of the customer and ensure that the transaction is legitimate before going forward.
Whatever the reason, receiving a 05 "Do Not Honor" message can be frustrating – it can lead to lost sales, and additional time and effort to resolve the issue. However, there are simple ways you can optimize authorization rates and reduce the risk of error codes, which we’ll explain further down the page.
Reasons for the “Do Not Honor” credit card decline
There are a few reasons why a customer’s bank may deny a transaction, including:
Deficiency of funds
This means the customer's account doesn’t have enough funds to cover the transaction amount. This will cause the bank to decline the transaction and send a "Do Not Honor" message with the 05 error code.
Possible fraud
If the bank suspects fraud, it may decline the payment and send a 05 "Do Not Honor" message. This could happen if the bank deems the transaction unusual, or if there have been previous instances of fraud on the customer's card.
Discrepancy between AVS and CVC
AVS (Address Verification System) and CVC (Card Verification Code) are security measures used to verify the customer's identity during a transaction. One of the most common reasons for the “Do Not Honor” code is when there’s a discrepancy between the AVS and CVC.
Read more: What is AVS mismatch?
Operation in another country
The customer’s bank may suspect fraudulent activity if the customer’s making a payment from another country, or if the transaction falls outside of the customer's usual purchase activity. Both scenarios will likely cause the bank to send a “Do Not Honor” message
Card blocked
If the bank has blocked the customer's card, the bank may decline the payment and send a "Do Not Honor" message. For example, if the customer has exceeded their credit limit or if there has been suspicious activity on the card, the bank may decline the payment.
Various purchase activity
If the customer regularly makes small purchases, then suddenly tries to spend a huge sum, the bank may deny the transaction and generate the 05 “Do Not Honor” error.
Incorrect card details
If the cardholder accidentally enters any of their card details incorrectly at checkout, the bank will decline the transaction and send a “Do Not Honor” message. Even if just one digit is wrong from the card number, expiry date, or card verification code (CVC), the bank will not be able to accept the payment attempt.
How to fix “Do Not Honor”
When it comes to resolving the “Do Not Honor” error, you have a few options.
Request an alternative payment method
The first port of call is to ask the customer to try a different payment method. Depending on your business and the number of failed transactions, you'll need to determine whether to continue attempting to process the payment, or to request that the customer provides a different payment method.
Ask the customer to contact their bank
Another possibility is to ask the customer to contact the bank explaining that they are trying to make a payment, so that the bank can allow it if it was erroneously declined.
Ask the customer to try later
In some cases, the failed payment is due to a temporary issue with the customer's bank or payment provider. That’s when you can ask the customer to try paying again later.
Send automated emails to inform customers
It’s good practice to send automated emails to customers if a transaction fails. This email should explain the reason for the failure and provide instructions on how the customer can proceed, whether that’s using an alternative payment method or trying the payment again later.
How to interpret and resolve response codes with Checkout.com
Our research found that 65% of businesses don’t receive detailed raw response codes on failed payments, which costs businesses $20.3 billion in disconnected payments. In other words, it’s vital that your business receives and responds to error codes, including the 05 “Do Not Honor” message.
The easiest way to detect failed transactions, optimize authorization rates, and recover lost revenue is by partnering with Checkout.com. With our customizable integration, you’ll get real-time data on your entire payment processing flow, including information on hard and soft declines.
For more information on how to streamline your payment flow, contact our sales team today.
