How does the dunning process work for credit card and ACH transactions?

Problem Statement

You want to understand how the dunning process work for credit card and ach transactions.

Solution

The dunning process in Chargebee is designed to handle failed payments and help ensure successful collection of dues. This guide explains how the dunning process works for credit card and ACH debit transactions, including how failed payments are retried, associated fees, and how to configure the process.

Related Scenarios

• What happens when a credit card payment is declined?
• How are ACH debit transactions handled if they fail?
• What fees are associated with declined payments?

Credit Card Transactions

When a credit card payment fails, Chargebee uses a configurable dunning process to retry the payment and notify the customer.

1. Payment Attempt

   • If a credit card payment is declined, no funds are received by Chargebee.
   • No fees are charged for declined credit card payments.
   • You can configure the number of retry attempts through dunning settings.

2. Configure Dunning Settings To manage declined payments and recovery attempts:

   • Go to Settings > Configure Chargebee > Dunning Settings
   • Set up:
     • Retry schedules
     • Customer email notifications for payment failures

ACH Debit Transactions

The dunning flow for ACH payments differs due to how funds are handled.

1. Initial Credit

   • ACH funds are initially credited to your account.
   • If the transaction later fails, the credited amount is pulled back.

2. Decline Fee

   • A $7.50 fee is charged for each declined ACH transaction (if using Stripe).
   • This fee is automatically applied to your account.
   • Contact your payment gateway to confirm the exact fee.

3. Configure Dunning for ACH To enable and customize dunning for ACH transactions:

   • Go to Settings > Configure Chargebee > Dunning Settings
   • Set:
     • Retry logic for failed ACH payments
     • Customer notification templates and schedules

Additional Notes

Keep the following in mind when configuring your dunning settings:

• Dunning Status: Check when dunning was last enabled or disabled in your account settings.
• Best Practices: Review and update your dunning settings regularly to optimize recovery rates.
• Security Considerations: Ensure all payment data is handled in accordance with PCI standards.

By configuring the dunning process in Chargebee, you can automatically manage failed payments, reduce revenue leakage, and improve payment recovery outcomes.