How Automatic Recovery Works

When a subscription payment fails, LostChurn automatically begins a multi-stage recovery process designed to maximize the chance of getting paid while minimizing friction for the customer. Most recovered payments never require the customer to do anything at all.

The Recovery Pipeline

Every failed payment follows the same four-stage pipeline:

1. Webhook Received

Your payment processor (Stripe, Braintree, Paddle, etc.) sends a payment_intent.payment_failed or equivalent webhook to LostChurn. The edge worker validates the HMAC signature and forwards the event to the module for processing.

2. Classify

LostChurn maps the raw decline code (e.g., insufficient_funds, expired_card, fraudulent) to one of four decline categories:

3. Strategize

Based on the decline category and ML scoring, LostChurn determines the retry strategy:

• Soft Retry declines get Smart Retry Engine scheduling with ML-optimized timing
• Hard Customer declines skip retries and go straight to dunning campaigns
• Terminal declines are marked as unrecoverable immediately

4. Execute

The system carries out the strategy, transitioning through the recovery lifecycle until the payment is recovered or marked terminal.

Silent vs. Active Recovery

LostChurn separates recovery into two phases to avoid unnecessary customer contact.

Silent Recovery Phase

Silent retries happen entirely behind the scenes. The customer never knows their payment failed. LostChurn re-submits the charge to the payment processor at an optimized time, and if it succeeds, the subscription continues uninterrupted.

Silent recovery works best for Soft Retry declines like insufficient funds, processing errors, and rate limits. These are transient issues that often resolve on their own within hours or days.

Active Recovery Phase

When silent retries are exhausted or the decline requires customer action, LostChurn escalates to active recovery. This involves sending dunning messages through your configured campaigns -- email, SMS, push notifications, or WhatsApp -- asking the customer to update their payment method.

Active recovery is triggered when:

• All silent retry attempts have been exhausted
• The decline category is Hard Customer (e.g., expired card)
• The ML model scores the retry probability below 10%

Recovery Rate Benchmarks

Recovery rates vary significantly by decline type. Here are industry averages compared to what LostChurn customers typically see:

The biggest improvement comes from intelligent silent retries. By timing retries based on decline type, time of day, and day of week, LostChurn recovers a significant portion of payments before the customer ever notices.

What You Need to Get Started

1. Connect your payment processor -- see Integrations to connect Stripe, Braintree, or another supported PSP
2. Review default settings -- LostChurn ships with sensible defaults for retry timing and limits
3. Set up campaigns -- configure dunning campaigns for when silent retries are exhausted
4. Monitor recovery -- track performance in the dashboard

Next Steps

• Decline Categories -- understand how decline codes are classified
• Retry Strategies -- learn how retry timing is optimized
• Recovery States -- follow a payment through the recovery lifecycle
• Card Expiry Alerts -- proactive notifications before cards expire to prevent failures
• Multi-Gateway Cascading -- route retries through multiple PSPs for higher approval rates
• Failure Prediction -- predict and prevent payment failures with ML scoring