Dunning Email Examples: Payment Recovery Best Practices

Lost revenue from failed payments hits hard. A customer's card expires, they forget to update it, and suddenly you're scrambling to recover that subscription. That's where dunning emails come in.

The average SaaS company loses 9% of revenue to failed payments. This can happen to various causes, like credit cards that expire every three years, banks issuing new cards when fraud happens or simply there just aren't enough funds. These payment failures happen constantly, but most companies handle them poorly.

Dunning emails notify customers about payment problems and help them fix the issue. When done right, they recover up to 70% of failed payments. But when done wrong, they can annoy customers into canceling.

The difference between good and bad dunning emails isn't just the copy - it's understanding that you're helping customers keep a service they want, not chasing them for money. This guide breaks down real dunning email examples, shows you what works, and gives you templates you can use today.

TL;DR: Dunning Email Best Practices

What makes dunning emails work:

• Clear subject lines that get opened ("Payment issue with your account")
• Simple explanation of the problem (which card, when it failed)
• One-click payment update button
• Reminder of what they'll lose without scaring them
• Multiple touchpoints (first notice, reminder, final warning)
• Personal support options for confused customers

Proven email sequence:

• Day 0: Soft heads-up before charging (pre-dunning)
• Day 1: Payment failed notification
• Day 3: Friendly reminder with benefits
• Day 7: Final notice before suspension
• Day 14: Account paused but recoverable

Common mistakes: Being too aggressive kills trust. Generic templates feel robotic. Waiting too long reduces recovery rates. Making the update process complicated loses customers.

For email design help, see our email design guide. For broader email tips, check transactional email best practices.

What Are Dunning Emails?

Dunning emails are automated messages sent when customer payments fail. The name comes from the old-fashioned term "dunning" for collecting debts, but modern dunning is about helping customers, not harassing them.

Think of dunning emails as payment problem-solvers. A credit card expires, abank flags a charge as suspicious, there aren't enough funds - instead of just cutting off service, you send emails that help customers fix the problem before they lose access.

Common payment failures that trigger dunning:

• Expired credit cards (happens to 25% of cards annually)
• Insufficient funds or credit limit reached
• Bank declining charges for fraud protection
• Outdated billing information after card reissue
• Technical errors during processing

Here's the thing most people miss: when payments fail, customers usually don't know and it is not because they're trying to avoid paying. If their card expired, they likely forgot. When bank blocks an international charge, they need time to fix it. These are managable problems if you handle them right.

Why Dunning Emails Matter

Failed payments are expensive. Really expensive.

The average subscription business loses 9% of revenue to payment failures. For a company doing $1 million annually, that's $90,000 vanishing. All of that not because customers want to leave, but because their payment didn't go through.

Good dunning emails recover most of that money. Studies show effective dunning recovers 50-70% of failed payments while poor dunning recovers less than 20%. The difference between good and bad dunning literally determines if some businesses survive.

But revenue is just the part of it. Failed payments also hurt customer relationships as nobody likes their service getting cut off unexpectedly, especially when they didn't know there was a problem. Handle payment failures poorly and customers remember; Handle them well and they barely notice.

Smart dunning emails will actually strengthen customer relationships. You're helping them keep a service they value and preventing an awkward service interruption. Therefore, for both you and the customer, you're solving a problem before it becomes a real issue.

Dunning Email Examples That Actually Work

Real examples beat theory every time. Here's what successful dunning sequences look like, with actual copy you can adapt.

Day 1: The Friendly Heads-Up

Subject line: "Quick heads-up about your payment"

What Spotify does well: Their first dunning email feels helpful, not demanding. "We couldn't process your payment for Spotify Premium. This sometimes happens when cards expire or banks flag international charges. Your music isn't going anywhere, but you'll need to update your payment to keep Premium features."

Key elements that work:

• Acknowledges this happens to everyone
• Explains common reasons without blame
• Reassures them nothing's lost yet
• Clear button: "Update Payment Info"

The best Day 1 emails assume the customer wants to pay, because they usually do. Your tone should be "Hey, small problem, easy fix" not "PAY US NOW." Include the last four digits of the failed card so they know which one to update.

Day 3: The Gentle Reminder

Subject line: "Your [Product] account needs attention"

What Netflix nails: "We're still having trouble with your payment. No worries, it happens. But we'd hate for you to lose access to your shows. Your account will stay active for 4 more days while you update your payment method."

Why this works:

• Still friendly, slightly more urgent
• Specific deadline creates action
• Mentions what they'll miss
• Doesn't sound desperate

Day 3 is where you balance friendliness with clarity about consequences. Customers who didn't act on Day 1 need a stronger nudge. Mentioning specific features or content they'll lose works better than generic warnings.

Day 7: The Final Notice

Subject line: "Last chance to save your [Product] account"

What works: "Your account will be paused tomorrow at midnight. You won't lose any of your data or settings, but you won't be able to access [specific features] until your payment is updated. Update now to avoid any interruption."

Critical elements:

• Clear deadline (tomorrow at midnight)
• Explains exactly what happens
• Reassures data is safe
• Still helpful tone
• Support option prominent

Even final notices should feel helpful, not threatening. You're trying to save a customer relationship, not burn it. Many customers update at this stage because the deadline finally feels real.

Day 30: Win-back Campaign

Subject line: “Still want to keep your account?”

What works: “Your account has been paused for a bit, so we wanted to check in. If you still want to use [Product], you can restore access anytime by updating your payment. You won’t be charged unless you choose to continue, and nothing has been deleted. If now’s not the right time, no action needed — you’re always welcome back.”

Why this works:

• Acknowledges inactivity without guilt or pressure
• Frames the decision as the customer’s choice
• Removes urgency but keeps the door open
• Reassures: no surprise charges
• One clear CTA, no clutter

Win-back campaign Different from dunning. By Day 30, we stop assuming intent and start offering a graceful return to your product. This reduces will resentment and increases trust that might win your customers back, and this campaign is all about that. Different psychology, different approach.

Keep in mind

Most companies only email on day 1 and day 7. This way they miss the pre-dunning opportunity and the grace period saves that might win customers back. Full sequences recover 70% of failures. Partial sequences barely hit 30%. Give your customers more opportunities to connect with you and remind them about why your products should get their trust.

Real Dunning Email Templates You Can Steal

Want templates you can copy today? Here are proven templates for each stage, based on what actually converts.

Pre-Dunning Email Template

Subject: Heads up: We'll charge your card on [Date]

Body: Hi [Name],

Quick reminder that we'll charge your [Card Type] ending in [Last4] on [Date] for your [Plan Name] subscription ($[Amount]).

If this card has expired or you'd like to use a different payment method, you can update it here:

[Update Payment Method Button]

Thanks for being a [Product] customer!

[Your Name]

Day 1 Failed Payment Template

Subject: Small hiccup with your [Product] payment

Body: Hi [Name],

We tried processing your [Plan] payment of $[Amount] but your [Card Type] ending in [Last4] was declined.

This happens sometimes when:

Cards expire (yours expires [MM/YY]) Banks flag recurring charges Credit limits are reached temporarily

Your account is still active. Fix this in 30 seconds:

[Update Payment Method - Big Button]

Questions? Just reply to this email.

[Your Name] P.S. Your [Product] data is safe. We just need to sort out the payment.

Day 3 Reminder Template

Subject: [Name], your [Product] account needs a quick fix

Body: Hi [Name],

Still having trouble with your payment. Your [Product] account stays active until [Day 7 Date], but after that you'll lose access to:

[Specific feature they use most] [Another valuable feature] [Data/content they care about]

The fix takes 30 seconds:

[Update Payment Method - Big Button]

Or if you're having trouble, just reply and I'll help personally.

[Your Name]

Day 7 Final Warning Template

Subject: Last chance to keep your [Product] account active

Body: [Name],

Your [Product] account will be paused tomorrow at midnight.

Here's what happens: ✓ Your data stays safe ✓ Your settings are preserved ✗ You can't access [Product] ✗ [Specific feature] stops working

Update your payment now to avoid any interruption:

[Update Payment Method - Big Urgent Button]

Need help? Reply right now and I'll assist personally. We really don't want to lose you.

[Your Name] [Product] Team

Grace Period Template

Subject: Your [Product] account is paused (but fixable)

Body: Hi [Name],

Your [Product] account is currently paused due to payment issues, but everything's still here waiting for you:

All your [data/content] Your custom settings Your [specific valuable data]

Reactivate instantly by updating your payment:

[Reactivate Account - Big Button]

We'll keep everything safe for 30 days. After that, we may need to remove some data to comply with our policies.

Miss us? We miss you too. Reply if you need any help.

[Your Name]

Day 30 Win-back Template

Subject: Want to keep your [Product] account?

Body: Hey [Name],

Your [Product] account has been paused since we couldn’t process your [Plan] payment of $[Amount] on your [Card Type] ending in [Last4].

That’s okay — things change. Nothing has been deleted, and you’re still welcome back anytime.

If you’d like to continue using [Product], you can restore access in under a minute:

[Restore Access – Big Button]

You won’t be charged unless you choose to continue. If now’s not the right time, no action needed.

Questions? Just reply to this email.

[Your Name] P.S. Your [Product] data and settings are still safe — they’ll be right where you left them when you come back.

Dunning Email Best Practices

After analyzing thousands of dunning campaigns, patterns emerge. The best performers share specific traits that you can copy.

Start before the payment fails. Pre-dunning emails sent 3 days before charging reduce failures by 25%. Consider something like: "Hi, we'll charge your card ending in 4242 on Friday for $49. If this card has expired or changed, update it here." Simple and effective.

Make the problem crystal clear. Vague messages kill recovery rates. Don't say "payment issue." Say "Your Visa ending in 4242 was declined due to insufficient funds." Customers can't fix problems they don't understand so you should include the decline reason when possible.

One-click fixes win. Every extra step loses 20% of customers. That means the update button should go straight to a pre-filled payment form with no login required and no hunting through account settings. Stripe, Paddle, and similar services offer hosted payment update pages that handle authentication seamlessly.

Personalization beats templates. Use their name, mention their plan, reference how long they've been a customer. "Hi Mark, you've been with us for 18 months..." performs 40% better than "Dear customer." It shows you're a real company that knows them, not a faceless corporation.

Support prevents angry customers. Some payment failures are complex: international cards can get flagged, corporate cards might need approval or customers might have complex bank problems that take time to fix. To make customers fix all of these issues easily, be sure to include a direct support email or chat link. "Reply to this email and I'll help personally" converts confused customers into saves.

The magic happens when you combine these practices. Send pre-dunning warnings, make problems clear and provide one-click solutions. Personalize everything and make sure to offer human help. Do all five and watch your recovery rate climb past 60%!

Common Dunning Mistakes That Kill Recovery Rates

Even smart companies mess up dunning. Here are the expensive mistakes we see constantly.

Waiting too long to send the first email. Some companies wait 24-48 hours before notifying customers. By then, the customer might have noticed the charge failed on their bank statement and assumed you'll cancel them. You should send within 2 hours of failure for best results. For even better results, remind them of incoming payemnt before the fail even happens.

Using scary subject lines. "URGENT: Account Termination Notice" might get opens but it destroys trust. You're not a debt collector - you're helping a customer fix a problem. Subject lines like "Quick fix needed for your account" work better.

Making payment updates complicated. Requiring login, navigation through account settings, then finding billing, then updating payment. Each step loses 20% of customers. Use magic links that go straight to payment update forms. No passwords needed.

Sending from no-reply addresses. Payment failures confuse people and they will likely have questions. When you send from no-reply@company.com, you're telling confused customers to figure it out themselves. Use a real email address and actually reply when they write back.

Being vague about the problem. "There was an issue with your payment" helps nobody. Tell them exactly what happened - "Your Visa ending in 4242 was declined with code 'insufficient funds'" gives them something to fix.

Not personalizing the message. Generic templates feel like spam. "Dear valued customer" screams automation. Use their name, reference their plan, and mention how long they've been with you - all of this will make it feel like a human wrote it, because humans respond better to humans.

Giving up after account suspension. The grace period after suspension recovers another 10-15% of accounts. Keep sending gentle reminders for 2-4 weeks even afterwards. "Your account is paused but we've saved everything. Reactivate anytime." Many customers just need more time to fix issue, but they also need gentle nudge.

Ignoring soft bounces. Email bouncing doesn't mean give up. It might be a full inbox or temporary server issue, so you should definitely retry failed dunning emails 2-3 times over a week. You'd be surprised how many eventually get through.

Avoid these mistakes and your recovery rate jumps 20-30% without changing anything else.

How to Measure Dunning Email Success

You can't improve what you don't measure. But most companies track the wrong metrics or misinterpret the right ones. Here's what actually matters.

Recovery Rate (The Only Metric That Matters) Payments recovered divided by total failures. If 100 payments fail and you recover 65, that's a 65% recovery rate. Industry average is 30-40%. This means good is 50-60% and anything over 70% is excellent.

Track recovery rate by cohort. January failures might recover differently than December failures (holiday credit card maxing). Day 1 recovery tells you if your first email works and Day 7 recovery shows if urgency helps. Day 30 shows grace period effectiveness. Follow all of these metrics.

Recovery by Failure Type. Different failures recover differently. Expired cards recover at 70-80% (customer just needs to update) while insufficient funds recover at 40-50% (depends when they have money). One of the lowest recoveries come from hard declines which stand at 20-30% as these are often fraud blocks. Track each separately to identify improvement opportunities.

Time to Recovery. You should follow how fast customers update payment after notification - and, of course, faster is better. If average recovery takes 5 days, customers are ignoring early emails. If it's under 24 hours, your first email nails it. Use this to optimize timing and messaging.

Customer Response Metrics. Email opens, clicks, and replies. Opens show if subject lines work, while clicks show if CTAs are clear. Replies will indicate confusion or problems with the update process. High replies might mean your process is broken. All of this will help you with bettering your campaign further and saving more revenue.

False Positive Rate. It's also important to see how often you email about payments that actually succeeded. This happens when payment processors retry successfully after you've already sent the failure email. This will erode trust, but also it is simply embarrassing. You certainly want to keep these emails under 5%.

Voluntary Churn After Dunning. There are some customers who will simply cancel instead of updating payment. If this spikes, it can indicate that your dunning is too aggressive and you're scaring customers away instead of helping them. This metric should stay under 10% of failures.

Revenue Impact. Ultimate measure of success. Calculate: (Recovered MRR / Total Failed MRR) x 100. If you recover $65,000 of $100,000 in failed payments, that's 65% revenue recovery. Multiply by 12 for annual impact. This number gets executive attention.

Track these metrics monthly and set up a simple dashboard. You should watch trends, not just snapshots. A declining recovery rate means something broke and an improving rate means your optimizations work. Let data guide your dunning strategy.

Where Bento Fits: Dunning Email Automation

Running dunning manually is a nightmare. You need payment webhooks, email triggers, retry logic, and template management. Most companies cobble together Stripe, SendGrid, and custom code, and this techinque works until it doesn't.

Bento handles the whole dunning flow. Payment fails in Stripe or Paddle, webhook fires, Bento triggers your dunning sequence - there is no code required. The automation builder lets you set delays, add conditions, personalize everything.

What makes Bento different for dunning:

Smart retry logic is built in Bento. Our platform knows not every failure should trigger emails immediately - Bento can wait for payment processor retries, check failure types, and only email when it makes sense. Prevents embarrassing "payment failed" emails when the retry succeeds five minutes later.

Meanwhile, deliverability infrastructure keeps dunning emails out of spam. Nothing is worse than payment recovery emails landing in junk folders. Bento includes authentication setup, reputation monitoring, and send rate controls, while also keeping high deliverability levels - your dunning emails actually reach inboxes.

Bento can also help you by providing templates that don't look like dunning emails. Generic "PAYMENT FAILED" templates scream automated system. Bento's templates, on the other hand, feel like helpful messages from real people: customizable but starting from proven designs.

When Bento makes sense:

• You're already using Bento for marketing emails and want dunning in the same system.
• You're setting up dunning for the first time and want something that works out of the box.
• You care about deliverability, as infrastructure comes included.
• You want templates that feel authentic and follow our guidelines.

The honest take

Bento does dunning well as part of a complete email platform. If you need dunning plus marketing automation plus transactional email, it's a great choice. If you only need hardcore payment recovery, specialized tools might serve you better.

Your Dunning Email Action Plan

Failed payments will happen. The question is whether you'll recover them or lose customers. What you need to focus on is building dunning that actually works.

Start with the basics. Don't overcomplicate your first version. Set up a simple 3-email sequence (day 1, 3, 7) with clear messaging and easy payment updates. You can optimize later. Getting something live beats perfecting something that never ships.

Audit your current situation. Check your payment failure rate, look at current recovery rates if you have dunning and identify which failure types happen most (expired cards, insufficient funds, bank declines). This baseline tells you what to improve.

Write like you're helping a friend. Your customer wants to pay but hit a snag. Help them fix it and skip the corporate speak. Write like you'd text a friend about their expired credit card: personal, direct and helpful.

Make payment updates stupid simple. Every click loses customers - your update button should lead directly to a payment form. Pre-fill everything possible and skip unnecessary steps. Stripe's Customer Portal or similar tools handle this perfectly.

Test one thing at a time. Start with subject lines, then test Day 1 messaging and only then timing. Don't change everything at once or you won't know what worked. Small improvements compound into big wins.

Measure what matters. Track payment recovery rate (payments recovered / total failures). Watch recovery by day to optimize timing. Monitor customer responses to improve messaging. Everything else is vanity metrics.

Get help when stuck. Payment recovery is specialized. If your recovery rate stays below 40%, something's wrong. Could be timing, messaging, or technical issues. Don't let pride cost you thousands in lost revenue.

Related resources: Design better emails with our email design guide. Master transactional email with transactional email best practices. Automate everything with email automation software.

Stop losing money to failed payments. Set up proper dunning this week. Start simple, measure results, improve continuously. Your future self (and your revenue) will thank you.