Dunning

What is dunning?

Dunning is the process of systematically reaching out to customers to recover failed or overdue payments, especially in subscription-based businesses. It involves sending timely reminders—via email, SMS, or in-app alerts, when a payment fails due to issues like expired cards or insufficient funds. Effective dunning helps reduce involuntary churn, improve revenue retention, and maintain healthy cash flow.

Why is dunning important?

Without a proper dunning process, subscription businesses risk losing recurring revenue due to preventable payment failures. Effective dunning:

• Helps recover lost revenue
• Improves customer retention
• Maintains a consistent cash flow
• Enhances customer experience by offering timely reminders

How does a dunning process work?

A typical dunning process starts with a gentle reminder when a payment fails. If the issue isn’t resolved, follow-ups are sent at specific intervals. Some systems also attempt automatic retries on the payment method before canceling the subscription.

Example of dunning

A customer’s card expires, and their monthly subscription payment fails. The company sends a dunning email informing them of the issue with a link to update payment info. After three days, a reminder SMS is sent. Once the payment goes through, the subscription resumes without interruption.

Driftcharge Tip

A well-crafted dunning strategy should balance urgency with empathy. Use automation to follow up consistently, but keep the tone helpful, not aggressive.

Ganesh Pawar

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Ganesh Pawar is the founder of Driftcharge, a subscription management app designed to help Shopify merchants streamline and scale their subscription businesses. With a deep focus on solving real-world pain points—like legacy account page support, flexible subscription options, and advanced analytics—Ganesh is passionate about building tools that drive growth and retention.