A failed payment is the easiest churn to get back, because the customer didn't decide to leave: a card expired, a bank declined, a limit was hit. Paddle estimates that these failures make up as much as 40% of a subscription company's churn (Paddle). Dunning management is the process of getting that money: retrying the charge, messaging the customer, and, for the accounts worth it, picking up the phone. This guide covers the tools for each step, from the retries built into your billing system to an AI agent that calls the customer, and what each costs, with prices checked 9 October 2026.
Outcraft AI pays us a commission if you sign up through our links, and other vendors here may too. It doesn't change the order: the free steps come first, the paid ones after, and Outcraft is listed where calling belongs in the sequence. How we compare.
Why subscription payments fail
Stripe sorts failures into two kinds. Soft declines are temporary: insufficient funds, a bank's fraud rule, a spending limit, a card presented from too many devices. A retry at a better time often succeeds. Hard declines can't be retried: Stripe won't attempt the charge again when the issuer returns codes such as incorrect_number, lost_card, stolen_card, authentication_required or transaction_not_allowed. Those need a new card, or the customer's hand on a 3D Secure prompt, and only the customer can supply either (Stripe).
That split decides the tool. Retries recover the soft declines; messages and calls recover the hard ones. Paddle, citing a JPMorgan guide, notes that card networks allow a payment to be retried up to 15 times in 30 days, except for the most serious decline category (Paddle), so the retry step has a ceiling built in.
The recovery ladder: retries, messages, calls
- Retries. Stripe's Smart Retries pick the time to try again from signals such as the number of devices that presented the card; the recommended setting is 8 tries within 2 weeks, and the window can run to 2 months. Stripe also updates the card number automatically when the customer's bank issues a new card (Stripe). Chargebee calls its version smart dunning and includes it in its Flow and Enterprise billing plans (Chargebee). Cost: nothing beyond the billing fee.
- Messages. Stripe sends automatic emails when a payment fails, a card expires or a payment method needs updating, with a link to a portal where the customer fixes it. Specialist tools add texts, in-app banners and a paywall: Churnkey runs campaigns by email, SMS and in your app, and can block features until the card is updated (Churnkey); Baremetrics Recover sends up to 7 emails over 30 days, shows a banner when the customer logs in that turns into a paywall after a grace period, and can add SMS, for $129 a month or 10% of what it recovers (Baremetrics).
- Calls. The customers left after the retries and the emails are the ones who never open the email, whose card was cancelled, or who are letting the subscription lapse without saying so. A call reaches them. Services such as Gravy work the accounts for you and publish no prices; Outcraft does it with an AI voice agent at a published $3 per customer (Outcraft).
Each step reaches customers the step before it missed, and each costs more per customer than the last. Run them in that order.
Dunning management tools compared
| Tool | What it does | Published price | Works with |
|---|---|---|---|
| Stripe Billing | Smart Retries, automatic failed-payment emails, card updater, customer portal, no-code automations | 0.7% of billing volume, pay as you go; monthly plans from $620 | Stripe |
| Chargebee | Smart dunning for online and offline payments; AI-powered collections (Receivables) | $0 + 0.80% of billing volume, or $99 + 0.65% above about $66,000 a month | Chargebee |
| Paddle Retain | Payment failure recovery and cancellation flows, built into Paddle Billing | Included at no extra cost | Paddle |
| Churnkey | Self-improving retries, unlimited dunning campaigns by email, SMS and in-app, feature blocking, cancel flows | Starter $250 / month billed yearly ($300 monthly) under $5,000 of monthly churn volume; Core from $500 | Stripe, Chargebee, Braintree, Paddle, Maxio, Recurly |
| Baremetrics Recover | Up to 7 dunning emails over 30 days, card-expiry and renewal reminders, SMS, an in-app banner that becomes a paywall, a branded card-update form | $129 / month or 10% of recovered revenue, plus a Baremetrics plan (Launch is free) | Stripe, Braintree and Recurly in full; other gateways for the emails and in-app messages |
| Gravy | A recovery service that works failed payments for you; says it has returned over $1 billion to clients | Not published | Ask |
| Outcraft AI | An AI agent that calls the subscriber, then follows up by text, email or WhatsApp; also handles cancellations and winback | $300 / month for up to 100 customers worked; $2,000 for 751 to 1,000 | Stripe, Shopify, HubSpot, Salesforce, Klaviyo, Zapier |
Prices from each vendor's pricing page, checked 9 October 2026. Churnkey's Core and Intelligence plans scale with monthly churn volume up to $50,000; above $100,000 is custom. Churnkey states 72% recovered payments across its customers and 89% for the best; those are its own figures.
When an AI calls the customer
Outcraft's agent phones the subscriber whose payment failed, and, in its words, reaches "subscribers before the renewal they were about to skip" (Outcraft). The call and the text, email or WhatsApp messages that follow it count as one conversation, and the agent runs the same way for customers who click cancel and for users who already left (Outcraft). It connects to Stripe and Shopify, so the failed payment itself can be the trigger.
The price is per customer worked in a month, not per minute: $300 for up to 100, which is $3 a customer, falling to $2 at 751 to 1,000 and $1.36 at 2,001 to 2,500, on a monthly contract with no setup fee (Outcraft). Only customers the agent engages count.
An example
Take a software company with 60 renewals a month still failing after Stripe's retries and emails, on plans averaging $80 a month. Calling all 60 costs $180 a month. If the calls bring back one customer in four, that is 15 customers and $1,200 of monthly revenue kept, from the first month on. The one-in-four is an assumption to replace with your own trial figures; the arithmetic works the same way at any rate once a saved customer is worth more than a few dollars.
Where the call is worth it: annual plans, business customers, plans above a few tens of dollars a month, and the hard declines that no retry can fix. Where it isn't: a $5 plan with thousands of small failures, where the emails and the paywall do the job at a fraction of the cost.
Building it yourself
Stripe sends an invoice.payment_failed event for every failed subscription payment (Stripe). An agency or a developer can route that event through Zapier or code to a voice agent built on Retell, Vapi or Bland, at $0.05 to $0.31 a minute plus the phone line. The AI voice agents guide compares the platforms and what building costs in time.
What failed payment recovery costs
| Option | 100 failed payments a month | Notes |
|---|---|---|
| Billing system retries and emails | $0 extra | Stripe at 0.7% of volume, Chargebee from 0.80%, Paddle Retain included |
| Churnkey Starter | $250 to $300 | Under $5,000 of monthly churn volume; email, SMS, in-app, cancel flows |
| Baremetrics Recover | $129, or 10% of recovered | Plus a Baremetrics plan; Launch is free |
| Outcraft AI calls | $300 | 100 customers called and messaged; $3 each |
| Gravy | Not published | A done-for-you service; ask for a quote |
Published prices checked 9 October 2026; the billing systems' percentage fees apply to all billing, not only recovered payments.
Cancel flows and winback: the same tools, one step earlier and one step later
Customer retention software bundles three moments. Before the failure: the retries above. At the cancel button: a flow that asks why and offers a pause, a discount or a downgrade; Churnkey offers pauses, discounts, cross-sells and seat hand-offs in its cancel flow and says it reduces cancellations by up to 54% (Churnkey); Paddle claims Retain cuts churn by 25 to 30% (Paddle). Both are the vendors' own figures. After the customer has gone: winback, a message or a call weeks or months later with a reason to return. Churnkey calls these customer return campaigns and sends one-click return links; Outcraft runs the cancel and the winback as calls, which is unusual; most tools do both by email.
The order of value is the same as for payments: the cheapest step (an email) first, the call for the customers worth it.
Rules for payment calls
A summary, not legal advice; have a lawyer check your script.
- A call about the customer's own payment is not telemarketing, as long as it stays on the payment. Under the FCC's rules, an artificial or prerecorded voice call to a mobile number that isn't telemarketing needs the called party's prior express consent; a call that includes or introduces an advertisement needs prior express written consent (47 CFR 64.1200). An AI voice counts as an artificial voice (FCC 24-17). So keep the upgrade pitch out of the failed-payment call, and keep the consent the customer gave at sign-up on file.
- Residential landlines: commercial calls that don't advertise are exempt, with a limit of three calls to a line in any 30 days, and opt-outs must be honored (47 CFR 64.1200(a)(3)).
- Say who is calling. An artificial or prerecorded message must state the identity of the business at the start, under the name it is registered with the state (47 CFR 64.1200(b)).
- Card details: have the agent send a secure link to update the card rather than take card numbers by voice.
- Europe: the ePrivacy Directive's consent rule covers automated calls for direct marketing (EUR-Lex); a service call about an existing payment is a different category, but national rules differ, so check the country.
Setup checklist
- Retries on in your billing system, with the recommended schedule, before you buy anything.
- Emails on, with the update-card link tested on a phone.
- A clear hand-off rule: which failures go to a call (hard declines, annual plans, accounts over a set value) and when (after the second failed email, say).
- Consent and identity: the sign-up form's consent wording, and the registered business name in the script.
- Quiet hours in the customer's time zone.
- A measure: recovery rate by step, so you know what the call adds on top of the emails.
Test plan
- Fail a test payment with a card that returns a soft decline and watch the retries and emails fire.
- Fail one with a hard decline code and check that the account reaches the call step.
- Take the call yourself. It should name the business, explain the failure, and send the link, not ask for a card number.
- Say you've already updated the card. It should check, thank you and stop.
- Say you want to cancel. It should take the request, or hand you to a person, not argue.
- Ask for no more calls, and confirm nothing follows.
Questions subscription businesses ask
What is dunning management?
The process of collecting payments that failed: retrying the charge, telling the customer, and following up until the card is updated or the account closes. The word comes from “dun”, an old term for pressing someone to pay. In subscription software it means retries, emails, texts, in-app notices and, for some accounts, a phone call.
What is failed payment recovery?
Getting the money back when a subscription renewal fails. Stripe, Chargebee and Paddle do the first part automatically with retries and emails; tools such as Churnkey and Baremetrics Recover add texts, in-app banners and paywalls; services such as Gravy work the accounts for you, and AI agents such as Outcraft call the customer.
What is involuntary churn?
Customers lost because a payment failed, not because they chose to leave. Paddle estimates it at as much as 40% of a subscription company's churn. It is the cheapest churn to reduce, because the customer usually wants to stay.
How many times should you retry a failed payment?
Stripe's recommended Smart Retries setting is 8 tries within 2 weeks, timed by its model rather than on a fixed schedule, with a window of up to 2 months available. Hard declines such as a lost or stolen card aren't retried at all; they need a new card from the customer.
Does Stripe handle dunning?
Yes. Stripe Billing includes Smart Retries, automatic emails when a payment fails or a card expires, automatic card updates and a customer portal, at no cost beyond the Billing fee (0.7% of volume on pay-as-you-go). It doesn't call customers.
What is the best dunning software?
Start with what your billing system includes. If you need texts, in-app paywalls and cancel flows on top, Churnkey (from $250 a month) connects to Stripe, Chargebee, Braintree, Paddle, Maxio and Recurly, and Baremetrics Recover costs $129 a month or 10% of what it recovers. For the customers the emails never reach, Outcraft calls them at $3 a customer.
Can an AI call customers about a failed payment?
Yes. Outcraft's agent calls the subscriber, explains the failure and follows up by text, email or WhatsApp, for $300 a month covering up to 100 customers. Agencies also build this on voice platforms such as Retell or Vapi, triggered by Stripe's payment-failed event.
Is it legal to call customers about a failed payment with an AI voice?
In the US, yes with the customer's prior express consent: a call about the customer's own payment that doesn't advertise isn't telemarketing, so it doesn't need the written consent that sales calls with an AI voice need. The message must state the business's name at the start. Add an upgrade offer and it becomes a marketing call. Have a lawyer check the script.
What is customer winback?
Reaching customers who already cancelled or lapsed, weeks or months later, with a reason to come back: a new feature, an offer, or simply a reminder. Most retention tools do it by email; Outcraft does it by phone and message.
What is customer retention software?
Tools that stop customers leaving at three moments: when a payment fails (retries and dunning), when they press cancel (a flow that offers a pause or a discount), and after they've gone (winback). Churnkey and Paddle Retain cover the first two; Outcraft covers all three by phone.
What recovery rate should I expect?
The vendors' own figures: Churnkey states 72% of failed payments recovered across its customers, and Paddle says Retain's recovery rate is over 50%. Your rate depends on the mix of soft and hard declines and the value of the plan. Measure each step separately so you know what the call adds.
What is the difference between dunning and collections?
Dunning is the automated, friendly end: retries and reminders in the days after a renewal fails, while the customer is still a customer. Collections is what happens to an unpaid debt after the account is closed. Chargebee sells both, as billing with smart dunning and as Receivables.
Sources
- Stripe documentation: revenue recovery, Smart Retries (retry policy, hard decline codes, webhook events); Stripe Billing pricing
- Chargebee pricing; Paddle Retain product page and Paddle's payment failure guide; Churnkey home and pricing pages; Baremetrics pricing; Gravy home page; all vendor-published and checked 9 October 2026
- Outcraft AI: home page, B2C solution page and pricing page (vendor-published), checked 9 October 2026
- 47 CFR 64.1200 (eCFR); FCC 24-17 (8 February 2024); Directive 2002/58/EC, Article 13 (EUR-Lex)