Skip to content
Log in
← Statistics glossary

dunning

Also called: dunning management, failed payment recovery, payment recovery

The process of recovering failed subscription payments: automatic retries, messages asking the customer to update their card, a grace period and, if nothing works, a pause or cancellation.

Dunning is everything a subscription business does to recover a payment that failed: a card expired, hit its limit, was blocked or replaced. Without it, those customers simply stop paying, even though most of them never meant to leave. That's involuntary churn, and dunning is the main tool against it.

A typical dunning process has four parts. Retries: try the card again on a schedule, for example after 1, 3 and 7 days, since many failures are temporary. Messages: tell the customer clearly and early, through the channel they actually read (email, SMS, a messenger), with a direct link to update the card. Grace period: keep the service running for a few days so the customer's business isn't disrupted while they fix it. Final step: pause or cancel, with a way back that doesn't lose their data.

Good dunning is polite and specific: it doesn't sound like a debt collector, and it makes updating the card a one-minute job. For business customers, reach the person who pays, who is often not the person who uses the product every day. Before any of this, prevent failures where you can: remind customers before a card expires, and offer yearly plans and invoice payment for those who prefer them.

Example

In October one GarageDesk shop is lost simply because its card expired and nobody noticed; of the 11 shops that left since the March launch, 4 were failed payments. The payment provider retries twice and then gives up, so the founders add the human part:

  1. A notice a week before a card expires.
  2. After the provider's retries fail, a Viber message to the owner (not the administrator) with a payment link.
  3. Then a call.
  4. A pause instead of deletion, so the shop's clients and history are still there when it pays.

Had both of October's accidental departures been saved (the expired card and a shop that never loaded its clients), churn would have been 1 / 58 instead of 3 / 58.

Common mistakes

  • No retries. Many failures are temporary; one attempt loses customers who never meant to leave.
  • Messaging the wrong person. In a business, write to whoever pays.
  • Cutting the service off immediately. A grace period keeps goodwill while the card is fixed.
  • Threatening tone. A friendly, clear message with a one-click fix recovers more.