Why do PATREON donations always “DIP” at the beginning of each month?

Every…single…month…

It’s like clockwork! I call it “PMS”—the Patreon Monthly Slide—although others simply call it “the Dip.” And yeah, it’s a thing. At the beginning of every month, most Patreon campaigns with a decent number of backers suddenly and inexplicably drop by 2%, 3%, or even 5%…only to recover some or most of the loss over the next few days.

It’s happened to both the Ares Studios Patreon as well as the Neutral Zone Studios Patreon (two of the largest current Trek fan film-related campaigns)…over and over again. And when “the dip” hits Ares Studios, you’ll usually see something like this posted over on Axamonitor…

Of course, looking at only a short snapshot of a single month misses the big picture entirely. And if you were to zoom out, you’d see the long-term trend is actually pretty solid (with a noticeable uptick in the weeks since AXANAR successfully completed its first film shoot at the beginning of October)…

So yeah, if you cherry pick a specific short downtick from the nearly year-long graph, you can try to sell the argument that four months of progress have essentially been “erased.” But overall, long-term, Ares Studio is a very strong and steady campaign, consistently taking in more than $2,000/month from over 200 donors, not dropping significantly from that level, and even showing a slight (and later, more pronounced) up-slope. And it’s been providing ALEC PETERS upwards of $25,000 per year to help with the rent and utilities for the studio.

But what’s also obvious from that long-term graph is that, yes, at the start of every month, there’s a mysterious “dip.” It’s there every time. The total number of donors and amount of monthly contributions drops like a brick…only to recover within a few days as though nothing ever happened!

And it got me to wondering…why?

Now, the tempting answer from some out there is to claim that people forgot they were still being charged regularly and, when reminded with a monthly receipt from Patreon showing the charge to their credit card, suddenly “came to their senses” and canceled the automatic renewal.

But that doesn’t explain the rapid recovery that nearly always follows the “dip.” Are all of these disillusioned donors just as quickly and inexplicably replaced in the days immediately following? Do they all suddenly change their minds back? And why do only a tiny few donors go through this “epiphany” each month—and then always seem to quickly get over it?

But something happened to me last month that solved the mystery…

Sometime in early-October, the nice folks at my credit card company unexpectedly decided that I was now worthy of “elite” status…whatever the heck that meant! The new benefits didn’t seem all that impressive, and I honestly didn’t want it. In fact, when I discovered that it would necessitate me being sent a brand new card number and having to update dozens of auto-pay billing accounts, I really REALLY didn’t want to be “elite”!

But apparently, it wasn’t my choice…and it was already a done deal. My new card arrived, and I spent most of the next few weeks updating auto-pays (and forgetting to update some and then receiving e-mail notices that my credit card was no longer valid)—pain in the frickin’ butt, folks!

One of the last notices I received was from Patreon on the first of November. My credit card charge didn’t go through for my monthly $5 donation to Ares Studios. Sigh, yet another mole to whack…

Adding a new credit card was easy enough. “Add new payment method” was right there in orange letters for me to click. I entered my information, clicked “Update” (an even larger orange button!), got the confirmation page, and figured I was done. Wouldn’t you figure you were done?

Two days later, I received a new e-mail from Patreon letting me know that my credit card payment had not gone though again because the card was no longer valid…and it provided the same hyperlink to update it. And back I went, hoping/praying that my new “elite” card wasn’t suddenly screwed up.

Turns out that, in a quirk of interface design that I frankly would never have let pass in my old days as a user experience designer, the “Add new payment method” did NOT automatically replace the expired/invalidated payment method. It simply added a new method while KEEPING the old one, too. If I wanted to SWTICH from the old to the new payment method (something I thought I’d already done), that was actually a whole other interface.

Now, I don’t mean to bash the UX designers at Patreon. But I will comment that if I misunderstood the process—and contrary to what some people believe, I am not an idiot—then others might fall into the same confusion and go for three days or longer without successfully updating their Patreon payment method. And what if THAT is what has been causing the monthly “dip”?

It turns out I’m actually right, as I discovered on Patreon’s own blog site for their campaign runners (Patreon even calls it “the Dip” with a capital D)…

Did you know that a large portion of the Dip comes from credit-card declines that your patrons may or may not be aware of.

This is actually good news — not only does this mean the Dip isn’t your fault, it also means you can do something about it.

But before that, let’s talk about why credit-card declines happen.

According to Maritza Dominguez, Patreon’s Payment & Risk Operations Manager, your patrons’ credit-card declines can be put into three categories:

• Expired credit cards
• Insufficient funds
• Do not honor: Maritza said that this category is super general, and can cover a whole lot of things, such as unrecognized merchant, address or postal code mismatch, recent suspicious activity, etc.

The next time you find yourself worrying about declines, Maritza wants you to remember this:

“Patreon retries soft-decline (transactions that don’t go through because of a temporary issue, like insufficient funds) several times during the month. So if a payment declines on the 1st, we have more opportunities to get those funds back.”

Maritza Dominguez, Patreon’s Payment & Risk Operations Manager.

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Oh, I’m certain that the occasional Patreon donor does, in fact, decide that enough is enough and cancels his or her monthly donation. But I suspect that the vast majority are simply situations described by Patreon above—folks like me with new credit card numbers and others who temporarily don’t have sufficient funds.

And so I fully expect that, in a few more days on the Ares Studio Patreon, we’ll see that pesky, pernicious, precipitous “plummet” as November turns into December. But come back around December 5 or 6, my friends, and see if it was really the beginning of the end of the world for Ares Studios…or just the dreaded “Dip” dropping the donation total for a few shorts days.