Dunning

How it works

A failed renewal arrives with a decline code, and the code, not your schedule, decides what happens next. Soft declines, insufficient funds, a temporary issuer problem, a velocity limit, are worth retrying, so the schedule spaces three or four attempts across roughly two weeks, often timed for the days salaries land. Hard declines are a different animal: a closed account or a card reported stolen should not be retried at all. Running alongside the retries, an account-updater service asks the networks for refreshed card details while your emails ask the customer to fix it.

There is a ceiling on all this. The card networks cap how often a declined recurring transaction may be re-presented inside a set window, and hammering a hard-declined card can bring fines from your processor. Cost creeps in as well: some processors bill a small fee for every declined authorization, so an aggressive schedule running across thousands of subscribers earns its own line on the statement.

The money at stake is bigger than most owners expect, because failed cards are a steady monthly leak rather than a one-off, and winning back a customer who never intended to leave costs a few automated emails against the full price of acquiring a replacement. What usually breaks is delivery. Dunning emails land in spam or go to an address nobody reads, so send the update-card link from your normal support address, keep it working without a login, and show the notice inside the product as well.

Worked example

Bill 2,000 subscribers $30 a month, lose 7 renewals in every 100, and $4,200 is at risk that month. Retries and an account updater that recover just over half of it keep about $2,310, roughly $27,700 across a year. Recovery is cheap: three attempts on each of the 140 failures is 420 authorizations, about $42 at $0.10 per attempt.

Frequently asked questions

How many times should you retry a failed subscription payment?

Three or four, spread over about two weeks. Spacing matters more than volume: retry the next day, then a few days later, then near the end of the month when salaries land. Stop the moment you get a hard decline, a closed or stolen card, because those will never succeed and the networks limit how often a declined charge may be re-presented.

What is involuntary churn?

A customer lost to a failed payment rather than a decision to cancel. The card expired, or was reissued after fraud, or there was simply no money on it on the billing date, and the subscription lapsed while the customer still wanted the product. It is the churn dunning exists to prevent, and the cheapest kind to win back.

Is dunning included with my payment processor?

The basic version usually is. Most processors with a subscription product ship a configurable retry schedule and a set of failed-payment emails. What costs extra is the card account updater, which some bill per card refreshed, and anything cleverer than a fixed retry rule. Dedicated recovery tools sell that layer on its own, normally for a share of what they recover.