# What is dunning?

URL: https://www.paydude.io/resources/what-is-dunning
Type: Guide
Published: 2026-09-02 · Updated: 2026-09-02
Summary: Dunning is the retry-and-remind sequence after a failed payment. What a good sequence looks like, and the retry mistakes that make things worse.

**Dunning is the sequence of automatic retries and customer messages that follows a failed subscription payment.** Its job is to recover revenue from customers who still want the product but whose payment method has stopped working.

## Summary

Three or four retries across one to two weeks recovers most of what is recoverable. Retry on different days of the month, not at fixed hourly intervals. Emails should link straight to updating the card — no login maze. End with a defined cancellation date rather than leaving accounts in limbo.

## What a good sequence looks like

**A workable dunning schedule**

| Day | Action | Why |
| --- | --- | --- |
| 0 | Payment fails. Email the customer. | Many failures are fixed the moment the customer knows |
| 1 | First retry | Catches transient declines |
| 3 | Second retry + reminder email | Different day, different balance |
| 7 | Third retry + reminder | Crosses a likely payday |
| 14 | Final retry + final notice | Last chance, with a stated cancellation date |
| 17 | Cancel or downgrade | Defined outcome, easy path back |

The dates matter more than the count. Retrying on the 1st and 15th catches payday cycles; retrying every six hours on the same day just produces four declines instead of one.

## The emails

- **Link directly to updating the card.** Every extra click loses recoveries. A tokenised link that skips login recovers substantially more than one that does not.
- **Say what happens and when.** "Your access ends on the 17th" outperforms vague warnings.
- **Keep the tone neutral.** This is an administrative problem, not a debt collection.
- **Send from a real address.** Replies should reach someone who can help.

> **Retry hard and you will be throttled:** Aggressive retry patterns — many attempts in quick succession — are treated as a risk signal by card networks and issuers. It lowers your authorisation rates across the board, including on healthy transactions. Spread attempts out.

## What dunning cannot fix

Dunning addresses the message and the retry. It does nothing about the underlying credential, which is why the largest category of failures — expired and reissued cards — needs [account updater](https://www.paydude.io/resources/what-is-account-updater) instead. The two together are what produce 70%+ recovery; either alone falls well short.

For the revenue at stake, see the [failed payment revenue calculator](https://www.paydude.io/resources/tools/failed-payment-revenue-calculator).

**Keep more of what you recover** Lower published rates on every successful retry. — [See pricing](https://www.paydude.io/pricing)

## Frequently asked questions

### How many times should I retry a failed payment?

Three or four attempts spread across one to two weeks, on different days of the month, recovers most of what is recoverable. Retrying immediately and repeatedly mostly produces more declines and can attract card network scrutiny.

### When should I retry?

On different days of the month rather than at fixed intervals. Insufficient-funds declines often clear after a payday, so a retry on the 1st or 15th succeeds where one 24 hours later does not.

### Should I cancel after dunning fails?

Yes, on a defined schedule. Leaving unpaid accounts active indefinitely inflates your customer count, distorts churn metrics and costs you infrastructure. Cancel with a clear final notice and an easy path back.

### What recovery rate should I expect?

A good dunning process combined with account updater recovers 60–80% of failed payments. Below 50% usually means retries are too clustered, emails are not landing, or account updater is not enabled.