Many people prefer paying by check according to the 2016 Federal Reserve Payments Study. Checks declined by processing companies harm auto dealerships where losing a sale to just one declined check can have far-reaching consequences.
For example, one declined check for a downpayment could result in the loss of three sales equalling a total of $146,000 if several values are considered (see the below infographic).
Word-of-mouth marketing has always been a powerful sales dynamic, but even more so via social media. Consequently, additional lost sales to family, friends and business associates may parlay into even greater lost revenue — all from one declined check.
The above scenario paints a dismal picture of lost lifetime revenue over a period of 10 years or more.
Finally, factoring in the brand damage from one declined check is another liability to consider since your auto dealership relies on its good reputation to reach a broad customer base.