Failed payments and dunning
Even with healthy customers, payments fail: cards expire, banks decline, fraud filters trip. Dunning is the system of automated retries and customer communication that recovers these failed payments. Without it, you lose 2–5% of subscription revenue every month silently.
How automated retries work
On first failure: charge retried in 1 day
On second failure: retried after 3 more days
On third failure: retried after 5 more days
After 4 failures total (typically ~10 days): subscription marked Past Due, dunning email sent
After 21 days of unresolved failure: subscription cancelled and access removed (configurable)
Dunning email cadence
| Day | Email content |
|---|---|
| Day 0 (first failure) | Your payment didn't go through. We'll retry in 24 hours — here's how to update your card if needed |
| Day 4 (second failure) | Heads up — your card was declined again. Please update at [link] to keep your service |
| Day 14 (subscription paused) | Update card to restore immediately |
| Day 21 (subscription cancelled) | Re-subscribe at [link] |
Reduce failed-payment churn
Card update reminders 14 days before expiration: send proactive emails to customers whose saved cards expire next month
Use account updaters: Stripe automatically updates card numbers/expiration dates from issuing banks for many cards - silently
Multiple payment method options: let customers add backup cards or ACH
Personal outreach for high-value customers: if a $5,000 customer's card fails, your team should call - not just rely on emails
NOTE - Dunning success rates
A well-configured dunning sequence typically recovers 50-70% of failed payments. The remaining 30–50% represents real churn (customer doesn't want to pay anymore). Without dunning, you'd lose all of them silently - even the recoverable half.
