Dunning is the systematic process of communicating with customers when their payments fail. An effective dunning strategy can recover 20-70% of failed payments. Components of a dunning system: - Payment retries: Automatic retry attempts at optimal intervals - Email sequences: Escalating notifications about payment issues - SMS reminders: High-urgency payment update requests - In-app messaging: Notifications within your product - Account updater: Automatic card detail updates Best practices: - Start with soft reminders before hard warnings - Personalize messages based on customer value - Offer easy one-click payment update links - A/B test subject lines and messaging - Retry at optimal times (payday patterns, etc.) - Use multiple channels (email + SMS)