What is dunning?
Dunning is the process of communicating with customers to recover failed or overdue payments. In subscription and SaaS billing, dunning combines automated payment retries with a sequence of reminders — email, and sometimes SMS or in-app messages — that prompt customers to update an expired or declined payment method before their subscription lapses.
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In subscription businesses, a large share of cancellations are not deliberate. A customer still wants the product, but their card expired or was declined — a problem known as involuntary churn. Dunning is how a business recovers that revenue: it detects the failed payment, retries it intelligently, and nudges the customer to fix their payment method.
A typical dunning process has a few stages. Pre-dunning warns customers before a card is due to expire. When a charge fails, smart retries re-attempt it on a schedule tuned to the decline reason rather than a fixed interval. Alongside the retries, a sequence of dunning letters reminds the customer and links them to a secure payment-update page. If every attempt fails, the subscription is finally paused or cancelled.
Done well, dunning meaningfully improves net revenue retention without annoying customers. The levers that matter most are retry timing, message wording and cadence, the friction of the payment-update flow, and the ability to retry on a backup processor when one keeps declining.
Related questions.
- What is the dunning process?
- The dunning process is the sequence a billing system runs after a payment fails: detect the failure, retry the charge on an intelligent schedule, send reminders linking to a payment-update page, and finally pause or cancel the subscription if recovery fails.
- What is pre-dunning?
- Pre-dunning is proactively warning customers before a payment problem occurs — for example, emailing them that their card is about to expire — so the failure never happens in the first place.
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