Failed subscription payments, and how to get them back

A renewal is a charge with no customer present, on a card you saved weeks or months ago. It fails for a few reasons, each with its own decline code and its own fix.

• The card expired or was reissued, after a lost card, a data breach, or a bank switch. The number or expiry you saved no longer works (code 54, or Mastercard 79 with advice code 01).
• The money isn't there today (code 51). It often will be in a few days.
• The issuer declined without a reason (code 05) or flagged the charge as unusual.
• The customer told their bank to stop paying you (R0, R1, R3, or Mastercard advice code 21). That's a cancellation, and it should be treated as one.

The full list, with which codes can be retried, is in the decline codes reference.

When a bank issues a new card or closes an account, it can send the new number, the new expiry date, or a closed-account notice to the card network. Visa Account Updater (VAU) and Mastercard's Automatic Billing Updater (ABU) pass those updates to merchants who keep cards on file, so the next renewal goes to the card that works.

You don't sign up with Visa directly. Merchants are enrolled through their acquirer or processor, and you only get updates if they participate. Visa runs it several ways: batch files, an API, a real-time version that applies the update before the authorization goes to the issuer, and a push service that sends updates as they happen.

Issuers can also block updates from reaching a particular merchant for a cardholder. If a customer asked their bank to stop you, the update won't arrive.

The question to ask your processor: are we enrolled in both VAU and ABU, and are we getting real-time updates or batch?

A network token replaces the card number you store with a token issued by Visa or Mastercard. When the bank reissues the card, the network updates what the token points to, so your saved token keeps working without a separate update. Most large processors support network tokens, but they aren't always switched on, so it's worth asking.

A fixed retry schedule treats every failure the same. Hard declines get retried when they never can be, which costs network fees, and soft declines get retried at times they're unlikely to work.

• Never retry Visa's category 1 codes or Mastercard hard declines. Ask for a new card instead.
• Retry insufficient funds when money is more likely to be there, such as a few days later or around common paydays.
• Retry issuer outages (91, 96) soon.
• Follow Mastercard's advice codes: wait 72 hours on MAC 02, and stop on MAC 03 and 21.
• Stay inside the limits: up to 20 retries in 30 days on Visa, 10 in 24 hours and 35 in 30 days on Mastercard. Stripe recommends no more than eight.

Updaters and retries recover the failures you can fix without the customer. The rest need the customer to do something, and the easier that is, the more of them do it.

• Warn them before a saved card expires, while the subscription is still active.
• Send a link that goes straight to updating the card, without a login.
• Use the channel they actually read. For a lot of brands that's SMS, not email.
• Offer a skip or a pause when the card fails, so a short-term cash problem doesn't become a cancellation.

This sequence is usually called dunning. Billing platforms and dedicated dunning tools can run it, but the logic is the part that matters: which decline it was, which message to send, and when to stop.

Failed renewals are one of four leaks in the Payments Leak Calculator, alongside declined checkouts, chargebacks, and processing fees. Put in how many renewals fail on the first try and how many you already recover, and it shows what the rest are worth to you each year.

Find your payments leak