If you run a transaction in our gateway and enter a date in the past for the credit card expiration date, you may be surprised to discover that we don't validate it. We run the transaction knowing that the card is expired. Why do we do this? The short answer is that financial institutions will still approve transactions with expired expiration dates.
To quantify the advantage of allowing expired expiration dates to be sent, we recently analyzed a large transaction data set and found that roughly 1.4% of all attempted transactions were processed with expired cards. Of these, 34% were successful. For a merchant processing $250,000 per month, that's an additional $1,190 in revenue. (Note: we're only referencing expired dates in this analysis, not incorrect dates.)
Another interesting pattern we uncovered was that the month of January consistently made up the majority of expired months. Within one data set of expired expiration dates, we noticed that January of that year was sent for 85% of the transactions. We think this might be happening because January of the current year is often the default expiration month for a checkout page. It appears as if a number of customers are not changing the default setting for expiration date when submitting transactions. While some of these transactions are successful, the majority fail, resulting in lost revenue to the merchant. We encourage businesses to take a look at their checkout process to ensure that a default value isn't being consistently passed through on transactions. One specific suggestion is to replace a dropdown input for the expiration date with a text field.