Recovering Failed Payments

It happened. The worst thing imaginable: Your customer’s payment failed. What do you do now?

  1. A) Panic like a madman
  2. B) Accept failure with dignity
  3. C) Launch a payment recovery effort
  4. D) None of the above

You guessed it. The only acceptable answer is C. And fortunately, creating a failed payment recovery strategy isn’t as difficult to implement as you may think.

In this post, we’ll give you steps to take immediately after a payment fails in your system. Let’s jump right in.

Start Before Payment Failure

Are you waiting for payment failure to happen before you do anything about it?

Sometimes, you can’t prevent payment failure. But other times, especially for businesses that offer subscriptions, you can spot payment failure ahead of time.

One of these flashing red light opportunities is with credit card expiration.

On average, credit cards expire every three years. This year, approximately a third of your customers will need to update their credit card information. If neither of you does anything about it, you may lose that customer. This is known as involuntary churn, and it’s scary, but there’s absolutely something you can do about it.

Get a tool that will attempt to automatically update expiration dates. Stunning does this. Stunning works in the background without you needing to lift a finger. If our attempts to update are unsuccessful, we can also reach out to the customer in a series of emails (that you can customize) to update their information before payment fails.

Here are the best practices to follow when sending out pre-dunning and dunning emails.

Respond As Soon as the Payment Fails

For those billing issues not related to credit card expiration, here’s what to do:

Respond right away. Don’t wait for even an hour to pass. The best time to attempt payment recovery is immediately after a charge does not go through. Waiting for hours or even days before reaching out to your customer may seem like the polite thing to do because you’re not applying pressure, but what if your customer has no idea that their payment failed? The longer that you wait, the less likely you’ll be to recover payment.

Think of this as a customer service opportunity. Notify your customer that something’s wrong. Then, partner together, with urgency, to correct the problem.

Diversify Your Contact Methods

Recovering Failed Payments

What notification method should you use?

While email is the standard, that may not be the best option for every customer. Some customers respond better to texts, and others to a multi-pronged approach. Here are several options to consider:


Alert your customer as soon as possible as a pop-up in your app or in the dashboard or message center.

Via Email

Send an urgent (but friendly) email to your customer when payment fails. More on how to word this email later.

By Text Message

Text your customer to notify them of payment failure, however, be careful of the time. If you process payments after midnight, for example, don’t send a text message in the middle of the night (not everyone turns their phone off/on silent). Instead, schedule alerts for 8 am or later.

Remember that you can automate your payment failure notification process through Stunning. Customize your in-app, email, and text messages, and Stunning can send them at specific intervals that have been optimized for payment recovery.

Cultivate the Right Tone

There’s a right way and a wrong way to write a demand letter. First of all, let’s not call it a “demand” letter. Instead, let’s think of it as an “uh oh, something’s wrong” letter.

When a payment fails, don’t assume that your customer is out to scam you. They’re probably just as blind-sided as you are. Instead of taking an accusatory stance, consider the friendly, heads up, cooperative approach.

Here’s what to include in your dunning messages:

Sender Name – Send from an actual person (i.e. to soften your email and not appear intimidating.

Subject – Identify the reason for your message without making it scary and putting them on the defensive. Here’s one of my favorite examples (from Drip): “Uh oh, credit card fail – your emails will stop sending soon…” You can also go with an “Oh no, your payment failed — here’s how to fix it.”

Body – Explain why you’re writing and get to the point ASAP. Action-required emails are most effective when kept under 125 words. Tell your customer what happened (credit card declined), how much they owe, when it’s due (yesterday, now, next week), and what they can do about it (your call to action — more on this next). Inject empathy and take a helpful, friendly tone. Assume that your customer wants to make things right immediately and direct them on how to do it.

Create a Clear Call to Action

The most important part of your customer outreach is its call to action. This is the prompt at the end of your message that tells your customer what to do next.

Examples of effective calls to action include:

    • Update your credit card details now


    • Click here to make a payment


    • Yes, please keep my service active


  • Update my billing info

Your call to action should be clear without any ambiguity. Don’t ask the customer to do several things in your call to action. It should be the very next step that the customer needs to take.

Make It Easy to Pay

When the customer clicks on your call to action, where do you take them? Don’t say “Settings.” Please, don’t say “Settings.”

Don’t send your customer to a settings or general account profile page. Route them to a secured payment landing page. Directing your customer to this specific landing page, instead of down a dark maze of settings, will make it easier for them to update their payment information. Remove as much frustration from the payment process as you can.

This also means that you should eliminate the login requirement. The last thing you want is for your customer to forget their password and end up in a password reset loop.

Once the customer updates their billing details, attempt payment immediately.

Make It Easy to Respond

Sometimes, after receiving a failed payment email, your customer may wish to reach out to your customer service team for help. Don’t block access.

The first step is to send from a friendly email address. Instead of a “” email address, send from an email address that can receive responses, i.e. “”

The second step is to encourage customers to respond to your email if they have any questions. While this invitation shouldn’t clutter your call to action, you can include this option within your main message.

Retry Multiple Times

Recovering Failed Payments

Don’t make just one recovery attempt. As the proverb goes, If at first you don’t succeed, try, try again. 

There are multiple reasons why a payment fails. Yes, it can be due to insufficient funds, but over half of payment failures have nothing to do with the customer’s account balance. Sometimes, payment fails because the customer encountered an issue with your app or the payment gateway. Other times, payment fails due to loss or suspicious activity.

Some of these issues remedy themselves without intervention. This means that you should absolutely continue your recovery attempts. Our research indicates that your maximum recovery potential is 21 days. Use Stunning to intelligently retry payment for a period of three weeks past the initial payment failure.

Optimize for Mobile

Did you know that the majority of emails are opened on mobile devices? Your pre-dunning and dunning emails should be optimized for smaller screens. In other words, your customers shouldn’t need to scroll left and right or pinch-to-zoom in order to see your failed payment emails.

Making sure that your emails look good on smaller screens may be a simple fix but this step will increase your payment recovery rates.

The Bottom Line

Remember that your indebted customer isn’t the enemy. Payments fail for dozens of reasons, including expiration, fraud protection, or even problems with a payment gate. Take a friendly but proactive approach to resolving failed payments and you won’t lose your customers (or your revenue).

Check out these additional resources:



Don’t forget to download this list of dunning and pre-dunning email best practices.

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