Failed Payment Handling
Learn how Stripe handles failed subscription payments, including automatic retries, customer notifications, and customization options for membership management.
Introduction
Stripe provides built-in membership management for subscription-based services, including automatic payment processing, dunning (failed payment recovery), and customizable email notifications. This article outlines how Stripe manages failed payments, the follow-up process, and where you can edit settings to enhance recovery efforts. Since CoachIQ does not have a built-in failed payment management system, Stripe handles all related processes.
How Stripe Handles Failed Membership Payments
1. Automatic Smart Retries
Stripe uses Smart Retries, which leverage machine learning to determine the best time to attempt a failed payment again. The default retry schedule includes up to four attempts within 21-30 days:
1st Retry: 1 day after failure
2nd Retry: 3 days after failure
3rd Retry: 7 days after failure
4th Retry: 14 days after failure
Stripe may adjust these attempts based on the customer's historical payment behavior.
Customization
You can modify the retry rules in the Stripe Dashboard:
Go to Settings > Billing > Subscriptions and emails.
Adjust the dunning settings to change the retry frequency or disable automatic retries.
2. Stripe’s Dunning (Failed Payment) Emails
By default, Stripe sends automatic email notifications to customers for payment-related events. These include:
Invoice Issued: Sent when a subscription invoice is generated.
Payment Failure Notification: Sent immediately after a failed charge.
Upcoming Retry Reminder: Sent before Stripe retries the payment.
Final Payment Failure Notification: Sent after the last failed retry attempt.
Customization
To manage email settings:
Go to Settings > Billing > Subscriptions and emails in Stripe.
Toggle on/off specific email notifications.
Customize email content to include additional context (e.g., payment support options, next steps).
3. What Happens if All Payment Attempts Fail?
If a payment remains unsuccessful after the retry attempts, Stripe follows one of these default actions:
Cancel the Subscription (default setting).
Mark Invoice as Uncollectible (customer retains access, but payment remains unpaid).
Pause the Subscription until payment is resolved.
Customization
To modify the failed payment behavior:
Navigate to Settings > Billing > Subscriptions and emails in Stripe.
Under Manage failed payments, select the preferred action (Cancel, Pause, or Keep Active).
4. Customer Payment Updates & Self-Service Portal
Stripe provides a customer portal where customers can:
Update their payment method.
View past invoices and billing history.
Manage their subscriptions (if enabled).
Customization
To enable and configure the customer portal:
Go to Settings > Billing > Customer portal.
Choose the actions customers can take (e.g., update payment method, cancel subscription).
Customize branding to match your business.
5. Modifying Subscription Payment Methods
By default, Stripe will attempt charges using the default payment method linked to the customer. If the card fails, Stripe will try other available payment methods (if any exist in the customer’s profile).
Customization
To manage payment method settings:
Go to Customers > Select a customer > Payment methods.
Enable backup payment methods to reduce payment failures.
Where Can I Edit Stripe's Failed Payment Settings?
All subscription and failed payment settings can be adjusted in the Stripe Dashboard:
Retry attempts & dunning emails: Settings > Billing > Subscriptions and emails.
Subscription cancellation rules: Settings > Billing > Subscriptions and emails > Manage failed payments.
Customer portal access: Settings > Billing > Customer portal.
Payment method preferences: Customers > Select customer > Payment methods.
Conclusion
Stripe's built-in failed payment management automatically handles retries, notifications, and cancellations. While CoachIQ does not currently offer additional follow-up processes for failed memberships, all settings can be managed within Stripe's dashboard. If you want to improve customer recovery rates, consider enabling custom retry settings, personalized dunning emails, and backup payment methods.
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