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

Recovering revenue from failed transactions is a critical component of maintaining a healthy cash flow. 4Geeks Payments includes robust dunning management features designed to automatically recover revenue lost to failed payments. Dunning is the automated process of communicating with customers to collect payments for outstanding invoices, often caused by expired credit cards or temporary insufficient funds.

By configuring effective dunning strategies within your dashboard, you can reduce churn, improve customer retention, and automate the recovery of failed subscription or recurring payments without manual intervention.

Prerequisites

To configure dunning strategies and manage failed payments, ensure you meet the following requirements:

• An active account on the 4Geeks Console with Administrator or Finance permissions.
• An active subscription to 4Geeks Payments.
• Existing recurring billing or subscription plans set up within the platform.

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How to Manage Failed Payments and Dunning Strategies

Step 1: Access Dunning Settings

Navigate to your payments dashboard to access recovery tools.

1. Log in to the 4Geeks Console.
2. Select 4Geeks Payments from the main menu.
3. Go to Settings and select Revenue Recovery or Dunning Management.

Step 2: Configure Smart Retry Logic

Automated retries can recover a significant percentage of failed payments without disturbing the customer.

1. In the Retry Schedule section, toggle Enable Smart Retries.
2. Define your retry schedule. A common best practice is a "1-3-7" schedule:
   • Attempt 1: 1 day after failure.
   • Attempt 2: 3 days after failure.
   • Attempt 3: 7 days after failure.
3. Save your configuration. The system will now automatically re-attempt charges based on this logic before marking an invoice as uncollectible.

Step 3: Customize Dunning Email Campaigns

Communication is key when a card fails. Set up automated emails to notify customers to update their billing information.

1. Navigate to the Email Notifications tab within Dunning Management.
2. Enable specific triggers, such as "Payment Failed" or "Card Expiring Soon".
3. Use the email editor to customize the message. Ensure you include a dynamic link (e.g., {{update_payment_method_url}}) that allows the user to securely update their card details immediately.
   • Tip: Keep the tone helpful rather than accusatory. For example, "It looks like your payment method needs an update" is better than "Payment Rejected."

Step 4: Define Final Actions

Determine what happens if all retries fail and the customer does not update their information.

1. Locate the Final Action setting.
2. Select the outcome for the subscription or invoice after the dunning cycle ends (e.g., usually after 30 days). Options typically include:
   • Cancel Subscription: Immediately stops service.
   • Mark as Unpaid: Keeps the subscription active but flags the invoice for manual collections.
3. Click Save Changes.

Common Use Cases

Scenario 1: Recovering Payments from Expired Cards

A long-term subscriber's credit card expires, causing their monthly renewal to fail.

• Application: With 4Geeks Payments dunning enabled, the system detects the "Expired Card" error code. Instead of cancelling the subscription immediately, it sends an automated "Card Expiring" email 3 days before the due date and a "Payment Failed" email immediately after the failure. The customer clicks the link in the email, updates their new card details, and the payment is successfully processed on the next retry attempt.

Scenario 2: Handling Temporary Insufficient Funds

A customer attempts a purchase, but the transaction fails due to a temporary lack of funds.

• Application: You configure a Smart Retry schedule to attempt the charge again in 2 days and then 5 days. The system automatically retries the card on payday without sending a potentially embarrassing email immediately. The payment goes through on the second attempt, preserving the customer relationship and securing the revenue seamlessly.

Troubleshooting

Issue 1: Customers are not receiving dunning emails.

• Solution: Check your email configuration in 4Geeks Console. Ensure that your sender domain is verified and that emails are not landing in the customer's spam folder. Verify that the "Enable Email Notifications" toggle is active in your Dunning settings.

Issue 2: Retries are attempting to charge an invalid card repeatedly.

• Solution: Review your Retry Logic. If the gateway returns a "Hard Decline" (e.g., Stolen Card, Invalid Account), the system should automatically stop retries to avoid gateway fees. Ensure "Stop retries on hard declines" is checked in your settings.

Issue 3: The "Update Payment Method" link in emails is broken.

• Solution: Verify the dynamic variables used in your email template. Reset the template to the default version to ensure the {{url}} variable is correct. If using a custom domain, ensure your SSL certificate is valid.

FAQs

Conclusion

Effective management of failed payments is essential for maximizing revenue. By automating dunning strategies with 4Geeks Payments, you can recover lost sales, reduce administrative overhead, and provide a smoother experience for your customers.

For more advanced strategies on managing your business finances or workforce, explore our other solutions like 4Geeks Payroll and 4Geeks Assets.

Explore more features and documentation in the 4Geeks Help Center.