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How to Manage Failed Payments and Dunning Strategies in 4Geeks Payments

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Failed payments and involuntary churn can significantly impact revenue for subscription-based businesses. 4Geeks Payments offers robust tools to manage failed transactions through automated dunning strategies. By configuring intelligent retry schedules and communication workflows, businesses can recover lost revenue without manual intervention.

This article guides you through setting up and managing failed payment strategies within the platform to maximize transaction success and customer retention.

Prerequisites

Before configuring your dunning strategies, ensure the following:

  • Active Account: You must have an active admin account on 4Geeks Console.
  • Enabled Module: The 4Geeks Payments module must be active.
  • Payment Gateway: A valid payment gateway must be connected and configured.
  • User Permissions: You need “Admin” or “Finance Manager” roles to access retention settings.

How to Configure Dunning and Smart Retries

Follow these steps to set up automated recovery logic for failed payments.

Step 1: Access Retention Settings

  1. Log in to the 4Geeks Console.
  2. Navigate to the Payments module via the main dashboard.
  3. Click on the Settings gear icon and select the Retention & Dunning tab.

Step 2: Set Up Smart Retries

Instead of retrying a failed card immediately, it is effective to space out attempts. This gives customers time to resolve issues like insufficient funds.

  1. In the Retry Schedule section, toggle on Smart Retries.
  2. Tip: This feature uses data-driven logic to attempt charges at optimal times based on the decline error code.
  3. Alternatively, define a Custom Schedule:
  4. Attempt 1: 1 day after failure.
  5. Attempt 2: 3 days after failure.
  6. Attempt 3: 7 days after failure.
  7. Click Save Schedule.

Step 3: Automate Customer Notifications

Communication is critical during a dunning process. Use automated emails to prompt customers to update their billing information.

  1. Navigate to the Notifications sub-tab.
  2. Enable the Payment Failed Email trigger.
  3. Customize the email template. Ensure you include the dynamic variable {{update_payment_method}} to provide a direct link for the customer.
  4. Set the trigger timing (e.g., “Immediately after 1st failure”).

Step 4: Define Final Actions

Determine the outcome if all retry attempts are unsuccessful.

  1. Scroll to Final Action.
  2. Select an option from the dropdown:
  3. Cancel Subscription: Revokes access immediately.
  4. Mark as Unpaid: Maintains the subscription but flags the invoice as unpaid (common for B2B).
  5. Click Save Changes to apply the policy.

Common Use Cases

Scenario 1: Soft Declines (Insufficient Funds)

  • Situation: A customer’s subscription renewal fails because their account balance is low.
  • Solution: 4Geeks Payments automatically schedules a retry for 3 days later.
  • Outcome: The second attempt succeeds once funds are available, preventing service disruption and saving your team from manual follow-up.

Scenario 2: Hard Declines (Expired Card)

  • Situation: A recurring payment fails due to an expired credit card.
  • Solution: The system instantly sends a “Payment Failed” notification with a secure link to update card details.
  • Outcome: The customer updates their payment method via the portal. The system detects the update and immediately processes the pending charge.

Troubleshooting

Issue 1: Retries are not triggering on schedule

  • Cause: Gateway-specific settings might be overriding platform rules.
  • Solution: Check your gateway configuration in 4Geeks Payments and ensure “Platform Management” is prioritized over “Gateway Default.”

Issue 2: Customers aren’t receiving dunning emails

  • Cause: Emails may be flagged as spam or SMTP settings might be misconfigured.
  • Solution: Verify your domain records (SPF/DKIM) in general settings. Advise customers to check their spam folders or whitelist your support address.

Issue 3: Subscription remains active after max retries

  • Cause: The “Final Action” setting may be set to “Do Nothing” instead of “Cancel Subscription.”
  • Solution: Review Step 4 in the configuration process and confirm that Cancel Subscription is selected.

Conclusion

Effective dunning management is essential for healthy recurring revenue. By leveraging the automated tools in 4Geeks Payments, you can reduce involuntary churn and focus on growing your business.

For further assistance or advanced configuration, visit the 4Geeks Help Center or explore other products like 4Geeks Payroll for integrated financial management.