72% of consumers abandon baskets at check out after being declined for credit

72% of consumers abandon their baskets after being declined for credit at checkout, despite over half saying they would look for an alternative finance option.

The results, from independent research commissioned by Payl8r, with the figures suggesting that single-lender checkout structures may be contributing to avoidable conversion loss.

Payl8r says that the research reveals ‘false drop-offs’ as instances where consumers leave the checkout process following a single credit decision, despite still having every intention of making a purchase.

Typically, in retail finance checkout processes, consumers are offered access to credit from just one lender. If this fails because the consumer does not meet that lender’s specific criteria, the process typically ends there. But the evidence suggests that a decline is not necessarily the end of the story. A large proportion of respondents said they would look for another finance option if it were available.

A credit decline reflects the underwriting model of a specific lender at a given point in time, with many major retail finance lenders operating within prime or near-prime criteria.

Customers with limited credit history, younger borrowers, or those rebuilding their credit files may fall outside these criteria, despite having the capacity to repay under a different risk assessment.

If no alternative route is provided, retailers may be unnecessarily losing sales from customers who are still keen to proceed.

Samantha Fogerty, Co-Founder of Payl8r, said “What this research shows is that a credit decline doesn’t automatically mean the customer doesn’t want, or can’t afford, the product. More than half of those surveyed said they would actively look for another option if one was available.

If the journey ends after a single credit decision, retailers risk losing customers who were still prepared to go ahead. In many cases, it’s not about unwillingness to pay, it’s about there being no next step. As retail finance continues to evolve, there’s an opportunity to rethink how checkout journeys are structured, while still maintaining strong affordability and responsible lending standards.”