Dunning (dun dun dunnnnn)
Sometimes payments are declined or for whatever reason cannot be processed. Here's how Cheddar handles this sad event:
1st, an automated email is sent to the customer letting them know something went wrong. You can customize this (as with all emails) to say anything you'd like. This hopefully prompts them to fix the error by adding a new payment method, or fixing their existing one. You may also set up a webhook for this event. When the customer updates their payment method, the outstanding invoice is transacted immediately.
2nd, Cheddar tries to bill them again. By default there are a total of 4 retries, over the course of 8 days: after the first declined attempt, Cheddar will retry every 2 days for 8 days. This dunning schedule may be customized. The same email notification as the initial declined payment event is sent upon each failed attempt. The email content can be changed based on how many attempts have been made and/or how close the subscription is to cancellation. After the last failed attempt, the subscription is auto-canceled at which time the cancellation email is sent. You may also set up a webhook for this event.
Expired Payment Method
The dunning process for expired payment methods is simpler. Since we know when a customer's payment method is going to expire, a notification email can be sent to the customer in advance. This email should prompt the customer to update their payment method. If the customer's payment method is expired prior to their next bill, the account will be auto-canceled and the cancellation email is sent. You may also set up a webhook for this event.
No Payment Method
Similar to expired payment method, we know in advance so a notification email can be sent to the customer in advance. This email should prompt the customer to add a payment method. If the customer doesn't have a payment method prior to their next bill, the account will be auto-canceled and the cancellation email is sent. You may also set up a webhook for this event.
What is Dunning?
This entire process is called "dunning", stemming from the 17th century verb dun, meaning to demand payment of a debt. Thanks wikipedia!
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