How dunning works
Dunning starts when a scheduled charge is declined or an invoice passes its due date. A typical sequence runs over days or weeks:
- The failure is classified from the decline code: temporary or permanent
- Temporary failures, such as insufficient funds, are retried on a schedule
- The customer is told, with a link to update the payment method
- Reminders escalate while a grace period keeps the service running
- At the end, the service is paused or cancelled and the debt written off or passed on
What decides whether a retry works
Many failed subscription payments are not refusals by the customer: the card expired, was replaced or had no funds on the day. Losing a customer this way is called involuntary churn.
Timing and information drive recovery. A retry after payday can succeed where one an hour later cannot, and a permanent decline, such as a closed account, will not succeed however often the charge is repeated. Card details kept current through the networks' account updater services or network tokens remove the cause altogether.
Why dunning matters to a payments product
Each retry is a new authorisation request sent without the customer present, which makes it a merchant-initiated transaction.
A provider that offers dunning passes decline codes through to the merchant, and adds a configurable schedule, message templates and a ledger that shows the invoice as open until the money arrives.
Dunning, payment retry or debt collection?
- Payment retry
- The automatic re-attempt of the charge. Dunning adds the messages, the grace period and the decision at the end.
- Debt collection
- Formal recovery of a debt, often by a third party and under its own laws. Dunning is the merchant's earlier and lighter process.
Where Dunning shows up in a platform
Modules that do the work
- CheckoutA hosted checkout for cards, wallets, bank payments and crypto, routed to the best provider.
- Card acquiringCard acceptance on the phone, in store and online, through the acquirer you choose.
- NotificationsEmail, SMS, push and in-app messages in your brand, through the providers you choose.
- Analytics & monitoringProduct analytics, attribution, engagement and crash reports, on a tracking plan you control.