Take advantage of Recharge’s smart retry technology through Failed Payment Recovery and engage your customers strategically, delivering tailored messages at the right times throughout the customer’s journey.

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

Before you start

• Failed Payment Recovery is included in the Retain package.
• Recharge created a standard Failed Payment Recovery strategy to optimize and simplify the recovery experience. 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.
• Stores using Failed Payment Recovery will not see the card decline email notification in the notification settings as the Failed Payment Recovery strategy handles this notification directly.

Overview

Failed Payment Recovery automatically retries customers' failed payments while notifying customers at the right points of the journey. Optimized for maximum recovery, Failed Payment Recovery reduces passive customer churn drastically.

Customers enter a Failed Payment Recovery strategy when an order fails with a payment error, and a recovery strategy begins. While Recharge initially provides the recommended copy based on where the order is in its recovery strategy, you have complete control over the email copy customers receive, ensuring the tone of any message matches your brand.

At the end of the recovery strategy, if the order is not recovered, the subscriptions associated with the order is automatically cancelled with the cancellation reason: “Failed Payment flow max retries”.

Recovery rate

Recharge tracks the recovery rate for your active Failed Payment Recovery strategy on the Performance tab so you can understand your strategy's impact on your customers.

The recovery rate is the percentage of orders with payment attempts that originally failed within a given month but were later recovered by any means. 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.

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 Retain in your merchant portal and select Failed Payment Recovery. 
2. Select Create from template.
3. Click Smart AI-powered recovery strategy and select Get started to create a recovery strategy.

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 recovery strategy name.
2. Update the Sender name and email under Settings. Customers see this information when they receive a notification related to the Failed Payment Recovery experience.
3. Click Display your logo on these emails to add a logo on all emails. You must host your logo (ie, through Shopify's file uploads or a website 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 if the logo should be displayed in the header or footer of your notifications and if it should be centered or left-aligned.
4. 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 based on an order's progress in 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 on the pencil icon next to any of the listed notifications to edit the notification.
2. 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.
3. Click Edit email body and enter your notification into the textbox. Click Done to save the updated notification.
4. Click Add an image to upload an image to the notification.
5. Click Done to save your changes.
6. 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.
7. Click Apply to save your changes.
8. Optional - Select a language from the language drop-down menu to translate your notification into different languages.

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.

Note: You can add both a logo and an image to your Failed Payment Recovery 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 an 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 retrying any failed payment orders currently in a dunning cycle. This includes charges actively being retried by Recharge or a third-party dunning provider. For instance, if a charge has been retried three times before you activated the strategy, the strategy takes over and continues the retry process from that point.

A/B testing your notifications

Perform A/B tests using the A/B test node to identify the most effective email for customers encountering a failed payment. With the A/B test node, you can test the following to determine how to best communicate with your customers:

• Subject lines
• Content
• Styling
• Call-to-actions

Build an A/B test for your Failed Payment Recovery strategy

Failed Payment Recovery Strategies use Recharge’s flow technology to automate the customer experience. While Recharge provides a strategy builder for Failed Payment Recovery Strategies to ensure a seamless user experience, flows typically use a canvas to build the subscription experience. To A/B test your notifications, you must add the A/B node to the canvas for your strategy.

You can access the Failed Payment Recovery canvas when building your strategy:

1. Follow the instructions listed above to configure your Failed Payment Recovery strategy.
2. On the Customize and review notifications (optional) page, select Go to the canvas under Looking to A/B test your emails.
3. Drag the A/B test node to a notification branch to auto-duplicate the branch and create the testing environment. You can add one A/B test node per branch.
4. Update the notification for each branch.
5. Save the canvas.
6. Click Activate strategy when you are ready to go live.

After activation, you can use your A/B tests to send out two different notifications, and then analyze your email analytics to determine the best notifications to fully optimize your recovery strategy. 

Implement your winning strategy

After reviewing your email analytics and determining which path leads to the best results, you can implement the winning strategy as your primary recovery strategy:

1. Click Retain in the merchant portal and select Failed Payment Recovery.
2. Find your A/B test strategy from the list of strategies.
3. Click the vertical dot menu and select Duplicate.
4. Open the duplicated strategy.
5. Click the vertical three-dot menu next to the path you want to remove, then select Delete.
6. Save and activate the strategy.
7. Navigate back to the list of Failed Payment Recovery Strategies. Click the vertical dot menu for the initial A/B testing strategy, and select Deactivate.

A/B test use cases

Testing various email notifications through A/B testing reveals how customers respond to different communication styles, allowing you to determine and implement the most effective messages for your Failed Payment Recovery strategy.

See the chart below for A/B test ideas, plus examples you can implement for each path.

Best practices

It is important to test one variable at a time. For example, start by running an A/B test with two different subject lines. Once you've identified the winning subject line, use it in a subsequent A/B test to evaluate different notification content. Use a tool like A/B Split Test Calculator to determine the efficacy of your tests.

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.

Listing line item for failed orders in notifications

As of August 2024, any strategies created automatically include a list of line items for failed orders in the notifications. To include a list of line items for existing strategies, you can either create a new Failed Payment Recovery strategy or duplicate the existing strategy and add the code block below to your email notifications:

<h3>Items in Shipment</h3>
<table cellpadding="8px" style="border-collapse: collapse;">
{% for item in charge.line_items %}
<tr style="border-bottom: 1pt solid #CCC;">
<td>
<img src="{{item.images['small']}}" width="60" height="60" style="border-radius: 8px"/>
</td>
<td>
<div><b>{{item.title}} x {{item.quantity}}</b></div>
{% if item.variant and item.variant not in ("Default Title", "None", None) %} <div style="font-size:0.9rem;color:#444;">{{item.variant_title}}</div> {% endif %}
</td>
</tr>
{% endfor %}
</table>

Displaying a customer’s credit balance

Remind customers of their earned credits and what they’d be leaving behind if they cancelled. Use the following code block to display a customer’s existing credit balance in your Failed 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 only displays in notifications if the customer has an existing credit balance.

Performance analytics

Recharge provides multiple dashboards and reports so that you can monitor the performance of your Failed Payment Recovery strategy:

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

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 Failed Payment Recovery 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.

You can access your Failed Payment Recovery strategy analytics in two spots:

Retain module

Click Failed Payment Recovery under Retain in the merchant portal to open the module. Select Performance to access all the data related to your recovery strategy.

On the strategy 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. 

Email analytics

In addition to performance analytics, Recharge provides analytical insights into emails sent throughout the Failed Payment Recovery strategy. These analytics 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 on the export icon to download your store data to review 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 Failed Payment Recovery 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.

Considerations

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