Article
Do Not Honor: What it means and how to manage it
Discover what Do Not Honor is and how to reduce declines.
Do Not Honor is a generic decline code that banks use to stop a transaction when they can’t provide a specific reason for the refusal.
A Do Not Honor decline happens when an issuing bank prevents a payment from going through but does not specify why. This code is one of the most common reasons for failed transactions in the payments industry. Managing these declines effectively helps you recover lost revenue and improve the shopper experience.
In this article, you’ll learn:
What a Do Not Honor response code is
Why banks use the Do Not Honor code
How the Do Not Honor process works
Strategies to reduce Do Not Honor declines
Key summaries
FAQ
What is a Do Not Honor response code?
The Do Not Honor response code, often labeled as ISO 8583 code 05, is a general decline message from the cardholder's bank. It indicates that the bank has decided not to authorize the transaction but has not triggered a specific category like insufficient funds or expired card.
Since it serves as a catch-all category, it often hides the actual reason for the decline, which could range from suspected fraud to internal bank limits.
Why banks use the Do Not Honor code
Banks use Do Not Honor to protect cardholders when a transaction appears unusual or risky. If a shopper makes a purchase that does not align with their typical spending habits, location, or frequency, the bank’s security system may flag it.
Instead of providing a detailed reason that could potentially help a fraudster bypass security, the bank issues a generic Do Not Honor response. This forces the merchant or the shopper to take further action to verify the payment.
How the Do Not Honor process works
Understanding the flow of a Do Not Honor decline helps you identify where the communication breaks down. The Do Not Honor process follows these steps:
The shopper initiates a payment on your platform or at the point of sale.
Your payment processor sends an authorization request to the card scheme, such as Visa or Mastercard.
The card scheme forwards the request to the issuing bank.
The issuing bank’s risk engine analyzes the transaction data.
If the risk engine identifies an anomaly but cannot categorize it, the bank sends a 05 Do Not Honor response.
The payment processor receives this code and informs you that the transaction failed.
This sequence happens in seconds. Because the code is vague, the payment stays in a failed state until the shopper or the merchant intervenes.
Strategies to reduce Do Not Honor declines
You can lower the frequency of these declines by improving the data you send to banks. High-quality data helps issuing banks trust the transaction.
Use 3D Secure 2
Implementing 3D Secure 2 adds a layer of authentication. When a bank sees that a shopper has passed a security challenge or provided biometric data, they are less likely to issue a generic decline.
Provide accurate billing information
Ensure the billing address and CVV match the bank’s records. Small discrepancies in address verification service (AVS) checks often trigger a Do Not Honor code.
Analyze your decline patterns
Review your payment data to see if specific banks or regions trigger this code more often. If you notice a trend, you can adjust your risk settings or reach out to your payment partner to optimize your routing.
Encourage shopper contact
When a Do Not Honor message appears, ask the shopper to contact their bank. The bank can then whitelist your business or confirm the transaction is legitimate, allowing the next attempt to succeed.
Data errors
Sometimes transactions fail because of an issue with the data sent to the issuer — for example, an address verification service (AVS) or card verification value (CVV) mismatch, or the lack of 3DS2 authentication performed on a transaction in scope of PSD2. The key with these failed transactions is to find the data point triggering the decline and then retry the transaction with the correct information.
CVV failure
The CVV2 or CVC2 is the three digit code on your customer’s card. If the code doesn’t match the one the issuer has on file, the transaction will be declined. It can even occur with in-person payments if the terminal has issues reading the CVV code embedded into the chip.
In many cases, this will still return a 05 Do Not Honor, but Visa uses a dedicated N7 Decline for CVV2 failure.
Keep a close eye on the codes in combination with the CVV results provided by your PSP. If these indicate a CVV failure, prompt your customer to enter their card details again or re-initiate the payment at the terminal.
Address verification service (AVS) mismatch
AVS compares the address data provided at checkout to the one on the card issuer’s database. It’s especially common in the UK and the US.
AVS mismatches usually have an accompanying AVS response code indicating whether the issue was with the postal or ZIP code, street address, or both.
In the event of an AVS mismatch decline, prompt the customer to re-enter their address details.
Authentication required (soft decline)
1A Authentication Required and 65 Authentication Required decline codes occur when a transaction is rejected due to the lack of authentication. This is referred to as a “soft decline” and is usually returned by issuers that are bound to enforce strong customer authentication (SCA), such as in the EEA due to PSD2.
The retry strategy for a soft decline is to authenticate the customer and retry the transaction.
In cases where your customer is not in-session (such as a subscription), you’ll need to bring your cardholder back to authenticate again.
Tools such as Pay By Link, sent via email, are handy in these scenarios.
Expired and closed card accounts
This occurs when a card has expired or been canceled. These can be painful, especially if you process subscription payments and your customer isn’t in-session.
The way to recover these transactions is to retry with the customer’s up-to-date card details. Account Updater and network tokenization services can help reduce these types of declines by ensuring you always have up to date card details on file.
Format errors
Decline codes like 12 Invalid Transaction and 30 Format Error indicate there’s something wrong with the transaction data received by the issuer.
Don’t retry this transaction. Instead, ask the customer to provide an alternative payment method.
Restrictions on card usage
57 Transaction Not Permitted and 62 Restricted Card decline codes occur when that specific card can’t be used. This can happen if the card is restricted by geography or channel (e.g., only in the US or in-person payments only).
Inform the customer of the restriction and recommend they contact their bank to have it removed. Only retry the transaction after.
Technical outages
Sometimes a payment fails because of a temporary outage in the system. In this case, a 96 System Malfunction, a 91 Issuer Unavailable, or a 05 Do Not Honor code might be issued.
In this instance, payments can be retried automatically, with the caveat that .
repeatedly retrying failed transactions can lead to issues with the card networks. You may make incremental gains by retrying over long periods of time, but the success rate inevitably decreases. The best approach is to see what you can save while staying compliant with the card networks.
Manage Do Not Honor (and other card refusals) with Adyen
Processing payments for global enterprises like Uber and Spotify has taught us a lot about optimization. And, since all payments across all channels and regions are processed on the same platform, we have a wealth of data, which we feed into our machine learning algorithms.
The result is a suite of smart tools, which work in the background to determine the best way to achieve an approval, while blocking fraud. Learn more about our payment optimization suite or click below to get in touch.
Contact us to learn how our payment platform helps you manage declines and increase your authorization rates.
Key summaries
Do Not Honor is a catch-all decline code used by banks for unspecified reasons.
The code often stems from a bank's internal risk assessment or suspected fraud.
Improving data quality and using 3D Secure 2 can reduce these declines.
Shoppers must usually contact their bank to resolve the underlying issue.
FAQ
The 05 code is a standard ISO 8583 response that means the issuing bank has declined the transaction without providing a specific reason. It is the most common generic decline code in the payments industry.