With all ACH payments, there is some risk that your tenant's payments can fail. The most common scenario results from insufficient funds, but it can also happen due to a stop payment or an error on the part of their bank.
Some of the most common reasons for a tenant's payment failure are:
Insufficient funds
Incorrect bank account
The card information was entered incorrectly
Payment method is not authorized for debit payments (this is if they entered a savings account vs a checking account)
The renter had their bank account frozen
It is important to know that if a payment fails multiple times, our payment processor will block the payment method. If that is the case, the renter will need to connect a different payment method to remedy this.
What happens when a payment from your tenant fails -
For Premium landlords:
If you are subscribed to the Premium Plan, Stripe will start the deposit process to your account as soon as payment has been submitted (before the funds have cleared from the renter's account), so you will receive the payment within 2-4 business days. If a tenant's payment fails, you will be notified via email. The email will include the tenant's name, amount, and date on which the payment failed. You can learn more about reversals by clicking here.
It will take 5-7 business days for the reversal to fully process and clear. Future payouts may be disrupted during this time. Once the reversal is complete and a new payment is submitted, you will see those funds in your account within 1-2 business days.
Below are a couple of examples of what the notification looks like when sent to the renter and the landlord.
The email notification sent to the renter:
The email notification sent to the renter for failed payment notice will include the bank account information with the last four digits, the amount of the charge that was tried, and the option to Recharge Payment.
The email notification sent to the landlord:
The email notification sent to the landlord when a tenant's payment fails will include the tenant's name, date, amount, and option to view the payment details.
In addition to the email notification, you will also receive the status of the payment failure within the charge along with the date the payment failed:
For non-premium landlords:
Payments will take 5-7 business days to be pulled from the renter's account and deposited into the landlord's bank account.
All payments are processed on business days, excluding weekends and (bank-observed) holidays. If your renter pays late in the evening or on a Friday, their payment will be processed the following business day or Monday.
What is a failed payout?
A failed payout refers to a payment that we are unable to deposit into your account. This issue may arise for several reasons, such as your bank account being closed or incorrect bank account numbers that need to be updated in TurboTenant.
If a payout fails, you will be notified via email. The email will contain the amount, the tenant's name, the last four digits of your bank account, and the reason it failed to pay.
You will also see the failed payout in the payments section of your lease profile. To get there, you can select the 'Leases' tab, select the name of the lease profile, and then select 'Payments.' You will see 'Deposit Failed':
Once you receive notification that your payout failed, you can take action by re-adding or updating your errored bank account. You'll also want to contact our support team for further assistance.
FAQs
Q: My bank rejected the payment because my bank account was closed. What do I do?
A: If your bank rejected the expected payment deposit because your bank account was closed, frozen, or for any other reason, to rectify this, you'd want to reach out to our support team. Our payment processor typically takes several business days to receive the failed payout information. In the meantime, you can take action by re-adding or updating your errored bank account. Our team is happy to look into the status and provide you with additional information.