We never got any declines, but I always wondered how that reconciliation process actually worked out.
IIRC, the merchant gets paid if hitting a credit limit or similar decline reason. The card holder then gets hit with a financial penalty (usurious interest rates, or extra charges). If the card has been stolen, it ends up in a big phonebook-like book for offline use (otherwise the merchant just called it in for big purchases).
I remember buying books at a shop in Denver in the late 80s and watching the proprietor look to see if my card was in the big book of stolen credit cards numbers before he ran my card through the kachunka machine.
IIRC, the merchant gets paid if hitting a credit limit or similar decline reason. The card holder then gets hit with a financial penalty (usurious interest rates, or extra charges). If the card has been stolen, it ends up in a big phonebook-like book for offline use (otherwise the merchant just called it in for big purchases).