Dunning
Dunning is the systematic process of communicating with customers about failed payments and attempting to recover the revenue through automated retries, payment method updates, and escalation sequences.
The term originates from the 17th-century practice of making persistent demands for debt payment. In modern SaaS, dunning is automated: when a payment fails, the billing system retries the charge at optimal intervals, sends email notifications to the customer, and may offer alternative payment methods.
Effective dunning programs recover 30-50% of failed payments. The best-performing systems use intelligent retry timing (e.g., retrying on the 1st of the month when paychecks arrive), pre-dunning notifications before card expiration, and multiple communication channels.
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