How to create a Failed Payment Recovery strategy

Take advantage of Recharge’s smart retry technology with a Failed Payment Recovery strategy to strategically engage your customers and deliver tailored messages at the right times throughout their journey.

This guide explains how Failed Payment Recovery works, and how you can update the notifications sent to your customers.

Before you start

• Work with your Recharge Implementations Engineer or your Account Executive if you have a unique business case and need to adjust the steps in your recovery strategy.

Overview

A Failed Payment Recovery strategy automatically retries failed payments and notifies customers at key points in the recovery journey. Optimized for maximum recovery, Failed Payment Recovery helps reduce passive customer churn.

When a payment fails, the order enters the recovery strategy, and retry attempts begin. Recharge provides recommended messaging based on the order’s stage, and you can customize the email copy to match your brand.

If all retry attempts fail, the associated subscriptions are automatically canceled with the reason Failed Payment flow max retries.

Retry timing

Recharge’s Failed Payment Recovery uses smart retry technology to determine the best times to retry failed payments.

Instead of retrying payments on a fixed schedule, Recharge dynamically adjusts retry timing based on factors such as payment error type, customer behavior, and historical performance across merchants.

This approach allows Recharge to:

• Retry payments more frequently when recovery is likely
• Space out retries when immediate success is less likely
• Adapt to patterns like pay cycles, card behavior, and regional differences

Because retry timing is optimized automatically, you don’t need to manually configure retry intervals. Instead, focus on customizing your customer notifications to support recovery.

Configuring your Failed Payment Recovery strategy

Follow the steps outlined to build a Failed Payment Recovery strategy:

Step 1 - Create a recovery strategy

1. Click Churn tools in your merchant portal and select Failed Payment Recovery. 
2. Select Create new.

Step 2 - Set your recovery strategy settings

Update the settings that apply to all emails sent to customers throughout the recovery strategy:

1. Add a strategy name.
2. Update the Sender name and email under Settings. Customers see this information when they receive a failed payment notification.
3. Click Display your logo on these emails to add a logo to all emails. Recharge automatically displays the logo at a max width of 100% and a max height of 100 pixels. You must host your logo (e.g., via Shopify's file uploads or a service like Imgur) and include the image URL when configuring your recovery strategy settings. Paste the logo URL in the Logo URL textbox.
   • Add alt text for your logo.
   • Confirm whether the logo should be displayed in the header or footer of your notifications, and whether it should be centered or left-aligned.
4. Confirm where your email Call-To-Action button directs customers:
   • A payment methods landing page: A customizable landing page where customers can update their payment method. You can edit this page anytime from the Failed Payment Recovery Settings page; note that changes apply to all Failed Payment Recovery strategies, not just a single email. This is often the best option when using a custom customer portal, as it reduces friction and supports frictionless payment updates.
   • Your standard customer portal payments method page: The standard payment page available through your standard customer portal.
   • A custom URL in your customer portal: A link to a custom URL where customers can edit their payment information.
5. Click Save and continue to set your recovery strategy settings.

These settings apply to all notifications automatically; however, you can adjust the sender name and email, as well as add specific logos for individual notifications in Step 3.

Step 3 - Customize and review the notifications 

Recharge provides preset notifications that increase in severity as an order progresses through the recovery strategy. You can keep these notifications as is, or you can personalize them to match your brand's tone and messaging:

1. Click the pencil icon next to any listed notification to edit it.
2. Optional - Select a language from the language drop-down menu to translate your notification into different languages.
3. Set the sender name and email for the specific notification if it should differ from what you set in Step 2. Add a subject line to the notification.
4. Click Edit email body and enter your notification into the textbox. Click Done to save the updated notification.
5. Optional - Select the option Display your logo on this template and paste your logo URL(hosted through Shopify's file uploads or a website like Imgur) in the Logo URL textbox to add a logo. Set the alt-text and alignment for the logo. 
6. Select if you use one of Recharge's standard customer portals or a custom customer portal.
7. Click Apply to save your changes.

Repeat these steps to update other notifications in the strategy. Click on the arrow icon next to a notification to preview it. Preview the notification from the customer's perspective and click Continue.

Optional - Add a logo and image

You can add a logo and an image to your notifications. While both images appear in the notification preview, adding an image using the Image Upload tool is the only way to view an email as HTML <img> tag in the email editor.

Step 4 - Activate your recovery strategy

Review the general information available to understand how your recovery strategy works. You cannot edit a recovery strategy after activating it, even if you deactivate it. You must create a new recovery strategy to make any changes.

Click Activate strategy to go live.

After activation, Recharge takes over and retries any failed payment orders currently in a dunning cycle. This includes charges that are being retried by a third-party dunning provider. For instance, if a charge has been retried three times before you activate the strategy, the strategy takes over and continues the retry process from that point.

A/B testing your notifications

See How to A/B test your Failed Payment Recovery strategy for detailed instructions.

Notification node variables

See Using the notification node for Subscription Experiences for a list of available variables you can use in the body of your notifications to personalize the customer experience.

Displaying a customer’s credit balance

Remind customers of the credits they've earned and what they’d be leaving behind if they cancel. Use the following code block to display a customer’s existing credit balance in your payment recovery notifications:

{%if customer.get('total_credit_balance') is not none and customer.total_credit_balance > 0 %}
<p>
You will lose {{ customer.total_credit_balance | amount_with_currency(credit_details.credit_currency) }} in store credits if your subscriptions are cancelled.
</p>
{% endif %}

This code block is dynamic and appears in notifications only if the customer has an existing credit balance.

Performance analytics

Recharge provides dashboards and reports to help you monitor your strategy's performance. Access the following to get insights into how your strategy is performing: 

• Performance tab: Track key performance indicators using high-level dashboards to understand how your Recovery strategy is performing.
• Activity tab: Display a detailed list of orders entering your recovery strategy and their current status.

Performance tab

The Performance tab provides an overview of failed payment recovery performance, including recovery rate and recovered revenue.

You can access Failed Payment Recovery performance analytics from the Failed Payment Recovery overview page, or from the flow canvas: 

• Failed Payment Recovery overview page: Click Failed Payment Recovery under Churn tools in the merchant portal to open the overview page. Select Performance to access all the data related to your recovery strategy.
• Flow canvas: Navigate to the specific recovery strategy you want to review reports for, click the More actions (three vertical dots) button, then select Reports within the merchant portal. 

Use the date filter to access data for a specific period: The filter uses the day an order enters a recovery strategy as the start date, and groups failed payments into monthly cohorts based on the month a customer starts their recovery strategy. Recharge always displays at least three months of data to provide high-level insights into your recovery strategy performance. If less than three months of data are available, Recharge populates all accessible data.

Analytics reporting for multiple active strategies: If you have multiple strategies active within a selected date range, such as two different strategies active during that timeframe, the analytics combine and display results from both strategies for that period.

Activity tab

The Activity tab lists customers who used your strategy, along with details on how they interacted with it. 

1. Click Failed Payment Recovery under Churn tools in the merchant portal to open the overview page. Select Activity to access the Activity report.
2. Click on the up arrow to export Activity data as a CSV.

Failed Payment Recovery (FPR) Activity excludes charges retried outside the normal subscription renewal cycle. These charges do not appear on the Activity tab or in exported data. 

Recovery rate

Recharge tracks the recovery rate for your active strategy on the Performance tab, so you can understand its impact on your customers.

The recovery rate is the percentage of orders with payment attempts that originally failed in a given month but were later recovered. Per industry standards, the recovery rate is expressed as a percentage. It is calculated by dividing the total number of recovered orders by the total number of orders with a payment failure.

If not all automatic retries have been attempted, you may notice a temporary drop in your recovery rate for the current and previous months.

Email analytics

Recharge provides email analytics to help you understand customer engagement with messages sent over the past six months.

The earliest start date available in the analytics date range is when Recharge first started recording analytics for your store. If you started using Failed Payment Recovery before August 2024, this start date will default to August 3rd, 2024. If you enabled a Failed Payment Recovery strategy after August 3rd, the start date aligns with the first email sent from your active strategy.

To access these insights, navigate to the Failed Payment Recovery page in the merchant portal and select Email analytics. You can also click the export icon to download your store data for a detailed analysis of individual customer insights.

On the Email analytics page, each row displays a unique email notification for a specific strategy. When you activate a new strategy, new rows appear for each email notification. These new email notifications do not combine with emails from the previous strategy.

The email analytics for a notification only appear after at least one customer receives the email.

Email open tracking filters

Recharge lets you filter email open data in the Failed Payment Recovery analytics to better understand customer engagement. You can choose how open rates are calculated using the following options:

• Includes all opens: Counts all tracked opens, including automated opens from bots or email privacy tools.
• Human-only, no bots: Attempts to exclude automated opens and only count human interactions.

Recharge includes all opens by default. You can adjust the filter to compare results based on your reporting preferences.

Recharge has backfilled historical data to support both filtering options, so you can apply this setting to past performance data.

Considerations

Consider the following when creating and maintaining a Failed Payment Recovery strategy: