When it comes to failed payments, you have two approaches: prevent the failure before it happens, or recover after it does.
Pre-dunning prevents failures by alerting customers when their card is about to expire. Dunning recovers payments after they've failed.
Both work. But which is better? And how should you use them together?
This guide breaks down both approaches with real data so you can make the right choice.
Quick Comparison
| Factor | Pre-Dunning | Dunning |
|---|---|---|
| Timing | Before payment failure | After payment failure |
| Trigger | Card expiring soon | Payment declined |
| Customer status | Has full access | May lose access |
| Success rate | 80-90% | 60-80% |
| Customer experience | Positive (helpful) | Neutral to negative |
| Urgency required | Low | High |
| Messages needed | 3-4 over 30 days | 5-7 over 14 days |
| Effort to set up | Moderate | Moderate |
TL;DR: Pre-dunning has higher success rates and better customer experience, but you need both for complete coverage.
What is Pre-Dunning?
Pre-dunning is proactive outreach to customers whose payment method is about to fail—typically because their credit card is expiring.
How it works:
- Monitor for cards expiring in the next 30-60 days
- Send reminder sequence (30, 14, 7, 3 days before)
- Customer updates card before payment attempt
- Payment succeeds normally
Example pre-dunning message:
"Hi Sarah, your card ending in 4242 expires next month. Update it now to avoid any interruption to your subscription."
Learn more: Card Expiration Email Templates
What is Dunning?
Dunning is reactive outreach after a payment has already failed.
How it works:
- Payment attempt fails
- Send notification sequence over 7-14 days
- Smart retries attempt to recover automatically
- Customer updates card to restore access
- Payment succeeds on retry
Example dunning message:
"Hi Sarah, your payment of $49 didn't go through. Please update your payment method to restore access to your account."
Learn more: Failed Payment Email Templates
Success Rate Comparison
Pre-Dunning Success Rates
| Channel | Card Update Rate |
|---|---|
| Email only | 70-80% |
| Email + SMS | 80-90% |
Why so high?
- Customer still has full access
- No urgency or stress
- Feels helpful, not demanding
- More time to act (30 days vs 7-14)
Dunning Success Rates
| Channel | Recovery Rate |
|---|---|
| Email only | 40-50% |
| Email + SMS | 60-80% |
Why lower?
- Customer may have already lost access
- Situation feels urgent/stressful
- Less time to act
- Some customers interpret failure as end of relationship
Net Comparison
| Scenario | Cards/Payments at Risk | Success Rate | Net Recovered |
|---|---|---|---|
| Pre-dunning only | 100 expiring | 85% | 85 updated |
| Dunning only | 100 failed | 70% | 70 recovered |
| Both combined | 100 expiring | 85% + (15×70%) = 95.5% | 95 saved |
Using both approaches together captures 95%+ of potential failures.
Customer Experience Comparison
Pre-Dunning Experience
Customer perspective:
- "Oh thanks for the heads up"
- "Easy to update, took 30 seconds"
- "They're looking out for me"
- "No interruption to my service"
Emotional state: Neutral to positive
Brand impact: Positive (helpful, proactive)
Dunning Experience
Customer perspective:
- "Why did my payment fail?"
- "I can't access my account!"
- "This is annoying"
- "I need to deal with this now"
Emotional state: Negative (frustrated, urgent)
Brand impact: Neutral at best (depends on messaging)
The Experience Gap
Even with perfect dunning messaging, you can't avoid the fundamental problem: something went wrong. Pre-dunning avoids this entirely.
When Pre-Dunning Works
Pre-dunning is most effective for:
- Expiring credit cards — The #1 cause of failed payments
- End of trial conversions — Reminder before first charge
- Annual renewals — Advance notice of upcoming charge
- Customers with old cards — Cards 3+ years on file
Pre-dunning does NOT help with:
- Insufficient funds (can't predict)
- Fraud blocks (can't predict)
- Customer disputes
- Network errors
When Dunning is Required
You still need dunning for:
- Failures pre-dunning didn't prevent — Some customers don't update
- Non-card-expiration failures — Insufficient funds, fraud blocks
- Customers without expiring cards — Failures happen for other reasons
- As a backup — Pre-dunning isn't 100%
Cost Comparison
Pre-Dunning Costs
| Item | Cost |
|---|---|
| Emails (4 per customer) | $0.001-0.01 |
| SMS (2 per customer) | $0.02-0.05 |
| Total per customer | ~$0.05-0.10 |
Dunning Costs
| Item | Cost |
|---|---|
| Emails (6 per customer) | $0.002-0.02 |
| SMS (2 per customer) | $0.02-0.05 |
| Total per customer | ~$0.05-0.10 |
Costs are nearly identical. But pre-dunning prevents the failure, while dunning only attempts to recover it.
ROI Comparison
Scenario: 1,000 subscribers, $50/month average, 5% have expiring cards monthly = 50 cards
| Approach | Success | Customers Saved | Monthly Revenue Saved |
|---|---|---|---|
| No action | 20% natural | 10 | $500 |
| Dunning only | 70% | 35 | $1,750 |
| Pre-dunning only | 85% | 42.5 | $2,125 |
| Both combined | 95.5% | 47.75 | $2,387 |
Additional revenue from using both vs dunning only: $637/month = $7,644/year
Implementation Effort
Pre-Dunning Setup
- Query payment processor for expiring cards
- Build reminder sequence (4 messages)
- Set up triggers (30, 14, 7, 3 days)
- Create payment update flow
- Track conversions
Effort: Moderate (needs card expiration monitoring)
Dunning Setup
- Set up webhook for failed payments
- Build recovery sequence (6 messages)
- Configure smart retries
- Create payment update flow
- Track recovery rates
Effort: Moderate (needs failure detection)
Using Both
If you're doing one, adding the other is incremental effort:
- Same payment update flow
- Similar messaging system
- Same tracking infrastructure
The Optimal Strategy
Best practice: Use both pre-dunning AND dunning together.
┌─────────────────────────────────────────────┐
│ COMPLETE PAYMENT STRATEGY │
├─────────────────────────────────────────────┤
│ │
│ Day -30 to -3: PRE-DUNNING │
│ • Detect expiring cards │
│ • Send 4 reminder messages │
│ • 80-90% update their card │
│ │
├─────────────────────────────────────────────┤
│ │
│ Day 0: PAYMENT ATTEMPT │
│ • 10-20% haven't updated │
│ • Some payments fail │
│ │
├─────────────────────────────────────────────┤
│ │
│ Day 0 to 14: DUNNING │
│ • Detect failures │
│ • Send 6 recovery messages │
│ • Smart retries │
│ • 60-80% recover │
│ │
├─────────────────────────────────────────────┤
│ │
│ RESULT: 95%+ payment success │
│ │
└─────────────────────────────────────────────┘
Key Takeaways
- Pre-dunning beats dunning on success rate — 80-90% vs 60-80%
- Pre-dunning is better for customer experience — Helpful vs urgent
- Dunning is still necessary — Pre-dunning doesn't catch everything
- Costs are similar — Both require similar infrastructure
- ROI is highest with both — 95%+ combined success rate
- Prevention > Recovery — But you need both
Which to Implement First?
If you have to choose one:
- Start with dunning if you have lots of failures already happening
- Start with pre-dunning if you want to prevent failures from the start
Then add the other as soon as possible.
Related Resources
- What is Pre-Dunning? — Complete definition
- What is Dunning? — Complete definition
- Card Expiration Email Templates — Pre-dunning templates
- Failed Payment Email Templates — Dunning templates
- Prevent Failed Payments Guide — Complete strategy
Get Both with Rekko
Rekko includes both pre-dunning and dunning in one platform:
- Automatic card expiration detection — Monitors Stripe continuously
- Pre-dunning sequences — Email + SMS before failure
- Dunning sequences — Email + SMS after failure
- Smart retries — Optimal timing for each failure type
- Unified dashboard — Track prevention and recovery together
Start your free trial → — Full pre-dunning + dunning in minutes.