Failed Payments & Dunning

Failed Payments & Dunning refers to the process of managing and recovering payments that cannot be successfully processed. A failed payment occurs when a transaction is declined due to issues such as insufficient funds, expired cards, or gateway errors. Dunning is the automated follow-up process that notifies customers, retries payments, and helps recover outstanding balances. Together, they reduce revenue loss and improve successful payment collection.

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What Are Failed Payments and Dunning?

Failed payments occur when a transaction does not successfully process, while dunning is the system used to recover those failed payments automatically.

In Deposyt, these two work together to ensure that:

Revenue is not lost just because a payment didn’t go through the first time.

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Why This Is One of the Most Important Features

Most businesses lose significant revenue due to:

• Expired cards
• Insufficient funds
• Bank declines
• Lack of follow-up

Without a system in place:

• Payments fail
• Customers forget
• Revenue is lost

With Deposyt:

• Payments are retried
• Customers are notified
• Revenue is recovered automatically

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What Causes Failed Payments

1. Expired Cards

Customers forget to update their payment details.

2. Insufficient Funds

Common with debit cards or timing issues.

3. Bank Declines

Triggered by fraud or unusual activity.

4. Incorrect Payment Details

Mistakes in the entered information.

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How Deposyt Handles Failed Payments

When a payment fails:

1. Payment is marked as failed
2. Customer is notified via SMS/email
3. Dunning process begins
4. Payment is retried based on your settings
5. Automations can trigger additional actions

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What Is Dunning?

Dunning is the automated process of:

• Retrying payments
• Sending reminders
• Recovering failed transactions

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Example Dunning Flow

• Day 1 → Payment fails → retry + SMS
• Day 3 → Retry + reminder
• Day 7 → Retry + urgency message
• Day 14 → Final attempt

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Deposyt Advantage

Deposyt enhances dunning by:

• Integrating SMS and email notifications
• Connecting retries to CRM automations
• Tracking recovery performance
• Allowing customizable retry schedules

This creates a complete recovery system, not just retries.

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High-Impact Strategies to Recover More Payments

1. Act Immediately

Send a message right after failure:

“Your payment didn’t go through—quick fix here.”

Fast response = higher recovery.

2. Use SMS First

SMS has:

• Higher open rates
• Faster responses

3. Retry Multiple Times

Best practice:

• 3–5 retries over 14–30 days

4. Provide Easy Fix Options

Make it simple to:

• Update payment method
• Retry payment
• Switch to ACH

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Pro Strategy: Recover Revenue Automatically

Combine:

• Instant notifications
• Automated retries
• Follow-up sequences

This creates a system where:

Most failed payments recover without manual effort.

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Advanced Strategy

After multiple failures:

• Offer alternate payment methods
• Send direct payment links
• Offer partial payment options if needed

This increases recovery rates significantly.

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How This Impacts Subscriptions

If failed payments are not resolved:

• Subscriptions become delinquent
• Service may be interrupted
• Customers may cancel

Proper dunning prevents churn.

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How to Monitor Failed Payments

1. Go to Payments → Reporting
2. Filter for:
   • Failed transactions
3. Track:
   • Recovery rate
   • Outstanding payments

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Common Mistakes to Avoid

• Ignoring failed payments
• Only retrying once
• Not using SMS
• Not following up quickly
• Not offering alternative payment options

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Summary

Failed payments and dunning are critical for:

• Recovering lost revenue
• Reducing churn
• Automating collections
• Improving cash flow

When used correctly, they allow you to:

• Capture revenue that would otherwise be lost
• Maintain customer relationships
• Scale more efficiently

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Next Steps

To further optimize your payment system, explore:

• Account Holds and Reserves
• Invoice and Subscription Reporting
• Auto-Pay Invoices

These features work together to protect and grow your revenue inside Deposyt.