Credit cards are an extremely convenient way to pay for online purchases. However, subscription businesses can face challenges in successfully completing recurring payments via credit cards. This is because after the initial payment at signup, various factors can cause the recurring payments to fail. The most effective way to repair the transaction—and thereby “recover” this revenue which would have otherwise been lost—is to employ automated tools and processes.

An automated revenue recovery process minimizes revenue lost to failed transactions and bad debt. It can also alert businesses to potential collections problems early, providing an opportunity to remediate them. Data shows that past due invoices are more difficult to collect the older they become. An automated revenue recovery process also minimizes churn caused by payment declines.

Revenue Recovery Process Best Practices

An effective dunning process combined with Account Updater services and automatic retries are the key to minimizing involuntary churn resulting from payment declines.

Account Updater This is an automated service offered by MasterCard, Visa, and Discover cards. It monitors customers’ credit cards for changes and makes updates to the records whenever necessary so that recurring transactions can be processed successfully. In this way, a subscription business processing payments can avoid a potentially failed payment before it even occurs.

Dunning Dunning stands for Delinquent User Notification. Generally it refers to sending emails or other communications to your customers when their payment fails, on a predetermined schedule. Dunning is successful when the transaction is successfully processed, either because the customer updated their payment information or via some other event which caused the payment to go through.

Automatic Retries Concurrent with the dunning process, credit card transactions which have failed are automatically retried. The reason for the failure determines the frequency and timing of the retries. For example, if a customer has insufficient funds, this may take longer to rectify than other failure types. This kind of “intelligent” retry logic means that retry attempts are set at a schedule which will most likely lead to success.

Our goal is to maximize revenue gained through retry attempts, while also being mindful of the fees related to these transactions to make sure they stay within reason.

The more effective these automated processes are, the more likely that payments will ultimately be successful. This means more revenue recovered for your business and less staff time spent on contacting customers to update credit card information.

Additional Best Practices to Improve Revenue Recovery

  • Configure your system to leave an invoice open past its Dunning period, an option that Recurly offers. Leaving an invoice open rather than closing it out maximizes your opportunity to collect revenue even after dunning has completed. This way, if the customer returns, you can still collect on their unpaid invoice.

  • You also may want to be able to report on these invoices via an


    accounts receivable (A/R) aging report

    . An A/R aging report is used to keep track of all the invoices going through dunning and produce a clean report for auditors. The report shows invoices grouped by how many days overdue the payment is (for example, 1-30 days overdue, 31-60 days overdue, etc.) and can be configured to exclude current invoices. 

    To learn more about this functionality in Recurly,



Even if you collect cash, the entire amount may not settle to your bank account if your customers raise disputes to your payments, which will be communicated to you in the form of chargebacks. Consider creating a chargeback reserve for use when this occurs, particularly if your product or industry category is prone to experiencing frequent chargebacks.

Why Choose Recurly?

Recurly offers an Automated Account updater service at no additional charge to our customers. Our proprietary retry logic helps to recover as much revenue as possible for our customers—an average of 5-9% of credit card charges each month! Our extensive experience serving our broad base of over 2,000 customers has allowed us to create optimized dunning schedules for different businesses, which also supports successful revenue recovery.

To gain more insight into customer results from using Recurly, including metrics on credit card declines, recovered revenue, and churn, along with benchmarks, read our Subscription Snapshot report. And for more information on how Recurly supports Finance teams and functions, visit our website.