This article will describe payment failure reasons, ways to handle failed payments and what notifications to use.

There are various situations and reasons for why recurring payments can fail. For some payment methods they are easier to recognize and handle than for others. The following aims to provide a summary per case so you can be informed on how these work for your business.

A common reason why recurring payments fail is that there's insufficient funds on a card or bank account. Firmhouse treats these failures as "normal" failures in the sense that there's a good chance that when retrying the payment a couple of days later, the problem may be resolved.

It's also possible a payment fails because a credit card expired, the bank account was shut down or blocked. Or for example because the customer was deceased.

We'll talk about chargebacks next. But it's good to realize that sometimes even when your payment service provider (PSP) marks a payment as a chargeback, it is still because of insufficient funds on a bank account. This mostly happens with SEPA payments where chargebacks are sometimes needed to handle insufficient funds cases.

Firmhouse is smart about this and treats chargebacks within a certain set of failure reasons as a normal payment failure.

Chargebacks are a different kind of failure. It means something special is going on.

A chargeback can typically mean either two things:

Firmhouse understands the difference in potential chargeback reasons. And let's you handle them accordingly with its failed payment and dunning features.

According to the payment dunning settings in your Firmhouse project, your customers will automatically be marked with a non-paying status. Typically customers that fail a payment due to a chargeback will get marked as non-paying immediately. And if you have automatic retries enabled in your project, then customers will be marked as non-paying after 3 failed retry attempts.

This special non-paying status is used in several ways. Certain exports and overviews will expose this status so that you can easily get an overview of customers who are currently non-paying.

The non-paying status also has a special meaning in certain features. For example: recurring orders are not generated for customers that are currently in this status. And the outstanding invoices reminder email is only sent to customers with a non-paying status.

By default the payments that fail due to insufficient funds, will be retried up to three times. Alternatively it's possible to disable these retries and immediately mark the payment failed and subscriber as non-paying. This might make more sense if your subscription offer is more time sensitive.

If you want to send invoice reminders for overdue invoices, set the payment term and reminders in the Payment dunning menu.

This is useful when you want to send overdue invoices to a collection agency after a certain period and for instance 3 reminders.

In case of a failed payment, three email notifications can be set up.

For all these notifications a few Liquid tags can be used to show the invoice details and for instance payment links.

In some cases it's also recommended to add the "update payment method" link, to allow a subscriber to link a new payment method.

Will be sent right away after a payment is failed. This informs the subscriber of the failed payment and if a retry is scheduled or they can pay directly.

A weekly notification to the subscriber that is marked as non-paying. A list of all outstanding invoices is available in this email template.

This notification requires the payment terms and automatic reminders to be enabled in the Payment dunning menu.

Based on the Payment dunning settings, this invoice reminder will be send per overdue invoice. An example use case is to add a warning after the second reminder, that extra (collection) costs will be added and the invoice will be given to a collection agency.

For this notification, the liquid tags {{invoice_reminder.reminder_number}} and {{invoice_reminder.final_reminder}} are available.