Email open rates are 20-25%. SMS open rates are 90%+. For payment recovery, that difference translates directly into dollars.
Here are 15 SMS templates for different stages of your dunning sequence, plus best practices for timing and compliance.
Why SMS works for dunning
People ignore emails. They don't ignore texts.
The average person checks their phone 96 times per day. Text messages get read within 3 minutes of delivery. For urgent matters like payment failures, this immediacy is invaluable.
Adding SMS to email-only dunning typically improves recovery rates by 15-25%. For a SaaS with $100K MRR and 5% monthly payment failures, that's $750-1,250/month in additional recovered revenue.
First notification (Day 0-1)
Use these when the payment first fails. Tone should be informational, not alarming.
Template 1: Simple notification
Hi [Name], your [Product] payment of [Amount] didn't go through. Update your card here: [Link]
Why it works: Direct, complete information, clear action.
Template 2: Soft approach
[Name], heads up – we couldn't process your [Product] payment. No worries, just update your card: [Link]
Why it works: "No worries" reduces anxiety. Friendly tone.
Template 3: With timeframe
Your [Product] subscription payment failed. Update your card in the next 7 days to keep your access: [Link]
Why it works: Gives a specific timeframe without panic.
Reminder (Day 3-5)
These add a bit more urgency. The customer has already been notified by email.
Template 4: Gentle reminder
Reminder: Your [Product] payment is still pending. Takes 30 seconds to fix: [Link]
Why it works: "30 seconds" makes it feel easy.
Template 5: Service-focused
[Name], we want to make sure you keep access to [Product]. Please update your payment method: [Link]
Why it works: Frames it as helping them, not collecting money.
Template 6: Question format
Hi [Name], did you see our email about your [Product] payment? Quick update needed: [Link]
Why it works: Acknowledges they might have missed the email.
Urgent reminder (Day 5-7)
Time to be more direct. Suspension is approaching.
Template 7: Clear deadline
[Name], your [Product] account will be suspended in 48 hours due to payment issues. Update now: [Link]
Why it works: Specific deadline creates real urgency.
Template 8: Loss aversion
Don't lose your [Product] data and settings. Your payment failed – fix it here: [Link]
Why it works: People fear losing things more than gaining things.
Template 9: Final reminder
Final reminder: Your [Product] subscription will be canceled tomorrow unless you update your card: [Link]
Why it works: "Final" signals this is serious.
After suspension (Day 8+)
The account has been suspended. Tone shifts to reactivation.
Template 10: Suspension notice
Your [Product] account has been suspended. Reactivate anytime by updating your payment: [Link]
Why it works: Clear about status, clear about solution.
Template 11: We miss you
[Name], your [Product] account is waiting for you. Ready to come back? [Link]
Why it works: Emotional, welcoming. Good for B2C.
Template 12: Easy return
Your [Product] account is on hold but your data is safe. Reactivate in 1 click: [Link]
Why it works: Reassures about data, emphasizes ease.
Special situations
Template 13: Card expiring (Pre-dunning)
Heads up [Name]: The card on your [Product] account expires this month. Update it to avoid interruption: [Link]
When to use: 2-3 weeks before expiration. Prevents the failure entirely.
Template 14: Retry succeeded
Great news! Your [Product] payment went through. You're all set for another month.
When to use: When automatic retry works. Optional but builds goodwill.
Template 15: High-value customer
[Name], this is [Your name] from [Product]. I noticed your payment didn't go through. Can I help? Reply or update here: [Link]
When to use: For VIP customers, high-ticket accounts. Personal touch matters.
SMS best practices
Keep it short
160 characters is the SMS limit before splitting into multiple messages. Aim to stay under. Every word should earn its place.
Include the link
Every dunning SMS should have a direct link to update payment. Don't make them search for it.
Use URL shorteners carefully
Shortened URLs can look spammy. Use branded short domains when possible.
Timing matters
- Best times: 10 AM - 12 PM, 2 PM - 5 PM local time
- Avoid: Before 9 AM, after 9 PM, weekends for B2B
- Consider time zones: Don't text someone at 3 AM
Frequency limits
- Maximum 1 SMS per dunning stage
- Don't send SMS same day as email on same topic
- Total dunning SMS: 3-4 maximum across entire sequence
Identify yourself
Always include your company/product name. "Your payment failed" from an unknown number looks like spam.
Compliance considerations
SMS marketing has legal requirements. For dunning:
Get consent. When customers sign up, include SMS notifications in your terms. Make it clear they may receive account-related texts.
Provide opt-out. Include "Reply STOP to opt out" or similar. Honor opt-outs immediately.
Transactional vs marketing. Payment failure notifications are transactional (not marketing), which has fewer restrictions, but still requires consent.
Country-specific rules. TCPA in the US, GDPR in EU, CASL in Canada. Know your markets.
Keep records. Document consent and opt-outs. You may need them.
When to use SMS vs email
SMS isn't a replacement for email. They work together.
| Situation | SMS | |
|---|---|---|
| First notification | ✅ | Optional |
| Detailed explanation | ✅ | ❌ |
| Mid-sequence reminder | ✅ | ✅ |
| Urgent/final warning | ✅ | ✅ |
| Post-suspension | ✅ | Optional |
| Card expiring soon | ✅ | ✅ |
Email handles details, multiple CTAs, longer explanations. SMS handles urgency, customers who don't read email, mobile-first moments.
The typical pattern:
- Day 0: Email
- Day 3: Email + SMS
- Day 6: Email (urgent)
- Day 7: SMS (final)
- Day 10: Email (post-suspension)
SMS is your ace card for moments that matter most.
Measuring SMS effectiveness
Track these metrics:
- Delivery rate: Are messages actually reaching phones?
- Click rate: Are people clicking the payment link?
- Recovery rate: Did SMS recipients update their card?
- Opt-out rate: Are you annoying people?
Compare recovery rates between email-only and email+SMS cohorts. The lift is usually obvious.
If opt-out rates spike, you're probably sending too many texts or at bad times. Adjust.
Quick start
- Add SMS to your most critical dunning moment (usually day 5-7)
- Use a simple template: "[Name], your [Product] payment failed. Update your card: [Link]"
- Measure recovery rate vs email-only
- Expand to other sequence stages based on results
SMS is the highest-impact addition you can make to email-only dunning. The templates above are proven starters — customize them for your brand voice and audience.