Dunning Emails: 11 Best Practices To Follow

Dunning Emails: 11 Best Practices To Follow

No one likes to be the bearer of bad news, especially when money is involved. However, ignoring customers’ failed payments, incorrect billing details, or their exceeding of plan limits can negatively impact your business. That's where dunning emails come in.

When it comes to payment issues, it’s best to take control of the situation as soon as possible, or you may end up losing customers due to subscription lapses and lost profits. 

Sending well-crafted and well-timed dunning emails (or dunning letters sent by email) can help you keep things on track.

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What do you mean by dunning email?

You may be wondering what dunning emails are or, more specifically, “What does dunning mean?” and that’s quite understandable. After all, it’s an odd term and not one that we use in everyday speech—except when we talk about dunning emails.

However, back in the 17th century the word “dun” or “dunning” was more commonplace, and referred to businesses or persons making persistent demands to clients to pay their debt. This was often done by dunning letter and, if you were less lucky, by way of an ominous knock at your door. 

In 21st-century speech, it’s just the process of asking customers for money owed and, when it's done by email, it's known as a dunning email.

What is a dunning email?

Dunning emails are account-related messages that businesses send to their customers in order to remind them about credit card expirations, failed payments, outdated payment details, incorrect billing details, or overdue invoices. 

Dunning emails are also known as payment-failed emails. Their main purpose is to provide a resolution for payment defaults, such as the means to update billing information or manually complete a payment, so that the client can proceed to use the service or product.

 Dunning emails, usually sent in a dunning email sequence, are a powerful technique used to reduce customer churn and lost profits,  and increase retention.

Dunning email best practices

1. Write compelling dunning email subject lines

The first step to achieving a successful dunning email is writing compelling dunning email subject lines that will prompt customers to open their emails—because that is the only way you will get failed payments paid and billing information updated.

Rule one of dunning email writing is to use a straightforward subject line that informs recipients that an action is required. 

For example:

  • Action required: Update your payment information to keep using Mailer To Go.

  • Notice: Your credit card has been declined.

  • Hello <name>, we couldn't process your payment.

  • Urgent action required: amend your billing information to continue using MTG.

online purchase

2. Use clear from & reply-to addresses

Help customers verify the authenticity of your dunning email by including your brand’s name in your email address and sending your email from the same sender that is signed at the end of your message. 

In addition, don’t send your dunning email message from a no-reply address, as it may leave your customers frustrated in the event that they have questions or require further assistance.

3. Keep your dunning emails brief and straightforward

Your ultimate purpose in sending dunning letters by email is to have your customers update their payment information, correct their billing information, or manually complete failed payments, so don’t write a lengthy email that might confuse them. 

Your dunning emails should explain what the exact problem is that led you to send them, what actions are required in order to fix that problem, and what will happen if the problem persists.

For example:

  • We were unable to charge your Visa ending in 0000 for your ACME dynamite payment. Please update your payment information to complete your purchase.

Beep Beep, better update your billing information to avoid another dunning email or worse.

beep beep roadrunner

4. Add a deadline

To obtain customers’ updated payment information and for them to take action, you must establish a sense of urgency in your dunning email. 

The dunning email should include a deadline for them to meet. A dunning email should also let them know what will happen if they miss that deadline.

For example:

  • If we are unable to charge your credit card within a week (that is, before May 19), we may have to pause your account until you fix the issues.

5. Provide support team contact information

When dealing with incorrect billing information, failed payments, and other payment issues, it’s important to let your customers know that they have someone from the customer service team to reach out to. 

Your dunning emails should provide accessible support team contact information, or customer service contact details so that customers will easily be able to reach you in case of a dispute or if they need assistance.

6. Remind customers what they may lose

Use your dunning emails to motivate customers to act as soon as possible by reminding them what they will lose in the event that they fail to update their billing info, upgrade their plan, manually complete their payment, etc. 

For instance, each of your dunning emails, even if you send a sequence of dunning emails, should make a brief mention of the fact that, if payment is not made, the client risks losing account access, having service interruption, and so on.

7. Add a clear call to action

It’s not enough for dunning emails to solely inform your customers of an issue they might be having with their payment. 

Use your dunning email to explain to them how to fix it, such as clicking a payment link, then make it easy for them to do so by guiding them through the necessary steps. 

For example:

  • Please click the payment link below to begin the manual payment process.

  • Or: Click the billing and payment link below to update the billing information for your MTG customer's account.

Add a clear CTA button or a payment link at the bottom of your dunning email to help customers settle their payment issues with minimal effort, proving that you value their time.

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8. Send pre-dunning emails

One essential question is whether or not you should send a pre-dunning email. Our answer is, why not?!

Pre-dunning emails are sent before an actual payment default occurs, in the time leading up to the payment due date. If pre-dunning emails are effective, there will be no need to send dunning emails at all.

Like dunning emails, pre-dunning emails are easy to automate, so they can be sent out routinely with minimal effort on your part. What's more, since they can help you avoid the dunning emails process altogether, it makes sense to consider sending them as a clockwork monthly routine.

online shopping

Sending a pre-dunning email once each day for the three days leading up to the payment date is an excellent dunning strategy that can eliminate the need for dunning emails altogether. It allows customers to ensure they have money in their account, suitable payment methods added, and whatever else they need to avoid a failed payment.

Instead of relying solely on your dunning email recovery rate to retrieve lost revenue, you can rely on pre-dunning emails to make dunning emails less necessary.

9. Manage dunning email timing 

You may be wondering, “How many dunning emails should I send?” The fact is, one dunning email is usually not enough. 

It’s possible that your customer may have missed your first dunning email, or decided to “deal with it later” and simply forgot about it. 

The reason is not important, however, what’s important is making sure that the customer opens at least one of the dunning emails so that they can be aware of the billing address or payment issue. Of course, they must also be provided with the opportunity to make a payment, even if it means nagging them with a series of automated dunning emails. 

In order to prevent involuntary churn due to payment and billing issues, it can help to establish clear protocols for dunning email timing. A great way to manage the dunning process is to establish a properly timed automated dunning email sequence.

Explore our latest posts to discover other types of transactional emails and best practices.

10. Avoid these dunning email mistakes

Provided you follow our 10 best practices for writing dunning emails, you should be good to go. However, we should mention, one of the biggest dunning email mistakes you can make is to send just one dunning email and be done with it. 

Sure, there’s no need for a dunning email once a client has taken the necessary actions to finalize payment, but the chances of them taking action will increase exponentially with every dunning letter you send. 

If you’re wondering about dunning email timing, we suggest one to three dunning notices a day until the payment has been made, no more and no less. This is why you should automate the dunning process with a dunning email sequence.

11. Use a reliable email service provider

If you're looking for the most efficient route, ensure that your dunning emails reach your customer’s inbox with the help of our simple, secure, scalable, and automated email delivery service, Mailer To Go.

Click here to find out more and give it a try, or find out how Mailer To Go weighs in against other SendGrid alternatives.

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Mailer To Go lets you send dunning, transactional, and marketing emails from inside your applications using your own email addresses and domains.

Frequently asked questions

What is an example of a dunning email?

There are a wide variety of dunning email examples, as dunning emails vary according to the nature of the payment default. However, here follows a basic dunning email example:

Dear Sir/Madam,

Your <magazine name> subscription payment dated 10/10/23 has failed due to insufficient funds in your account. 

No immediate action is required on your part, as our system will automatically attempt the transaction twice daily for the next 72 hours.

However, should our attempts be unsuccessful, please log onto your account page here <link> to complete payment or update your payment details before 15/10/23, or your subscription will be revoked.

Kindest regards, 

The <magazine name> team.

Why are dunning emails so important?

The majority of payment defaults happen due to negligence, funds not being in the right account on the right date, and other honest mistakes. It follows that a friendly, automated notice of payment failure, along with a series of dunning emails, can effectively get clients to top up their accounts or do what needs to be done for the payment to clear. 

Thanks to their high success rate as a payment reminder, dunning emails save companies millions in legal fees and lost profits every year.

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