This happened to me the first year I canned sliced jalapeno's and banana peppers. All that work for nothing! I was so disappointed!
To combat that I stopped using the food processor to slice the peppers, and sliced them by hand a bit thicker. Don't forget to wear gloves! I also cut down the time in the water bath by almost half. Just enough for the lids to pop and seal. Haven't had that problem since.
You can adjust the heat by the amount of ribbing and seeds you leave with the peppers. After one year of leaving all of it (VERY HOT), I remove both the seeds and ribbing about every other pepper. Maybe every third pepper (I like 'em hot).
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