There are three reasons main reasons for why your customers recurring orders fail.

In this article, we'll be discussing the first two issues in depth, but if you would like more information on Inventory Issues, you can this our article: How to Set up your Billing / Inventory Settings

Payment Method Failures occur when Shopify attempts to charge a customer's card, but a bank, payment processor, or card network declines the transaction. These declines typically occur due to insufficient funds, incorrect card information, card expiration, or generic declines that are recovered in subsequent retries.

Customers who placed orders through accelerated payment gateways, like PayPal and Shop Pay, can also "revoke" their cards within these platforms effectively canceling their subscriptions.

You may also encounter errors due to credit card fraud, for which we recommend using partners like NoFraud.

In general, payment failures are classified into two groups: Hard Declines and Soft Declines. A hard decline is a payment error in which a customer needs to update the payment method on their subscription in order for it to remain active. Examples of hard declines include incorrect card numbers or card expirations. Soft declines are temporary errors that can be recovered on subsequent retries. Examples of soft declines include generic errors or credit limits being exceeded.

Shopify Errors occur before the card can be charged. This can be due to Shopify Payments' internal fraud detection system, errors in shipping method configuration, or other data errors with the subscription or within Shopify.

These errors are labeled in our system with the Error Code contract_error and the Error Message Shopify Contract Error.

When a subscription fails to bill due to Payment Failures or Shopify Errors, a subscription will enter into the dunning process in which payment is reattempted at a set cadence, depending on your billing settings. We also send payment declined emails through our email system, Klaviyo, Attentive, and Postscript (if enabled) for each of these failures. Once a subscription has reached the maximum number of retries based on your settings, the subscription is automatically canceled.

When a subscription fails to bill due to inventory errors, Stay AI will retry the order based on the Stock / Inventory Level Settings set in your billing settings. This system uses logic separate from failed billing and will move the order to a later date to be attempted again once the set number of retries is reached.

When billing fails for a subscription, Stay AI provides both merchants and customers with indicators to update the failed payment method.

In the Merchant Portal under Customer > Failed Billing, you can find our Billing Failures report which shows each failed billing attempt made on recurring orders.

On the Subscription Detail page in the history tab, you can find information about current and previous failed billing attempts on a subscription.

If a subscription's last billing attempt failed, we highlight the payment method on the subscription and provide the reason for the last billing failure.

When billing fails in the customer portal, Stay AI will highlight any subscriptions with the associated a the payment method that failed.

On the Subscriptions Hub Page, customers will see the Update Payment Method button on each subscription associated with a payment method that had a payment failure on its last billing attempt.

By clicking the Update Payment Method button, the Update My Details modal where the failed Payment Method is highlighted (this can also be reached through the subscription tab). The customer can select another card if available or click the Update Payment Method button.

When a customer clicks the Update Payment Method button, Shopify sends them an email with a link to a secure page where they can update their payment method. If the customer used Shop Pay, the process can be a bit more confusing. We've outlined the process for updating a card in Shop Pay here.

You can edit your Shopify Payment Method Update email in the Shopify admin under Settings > Notifications > Customer notifications > Accounts and outreach > Customer payment method update request.

You can also send the payment method update email to a customer from the Shopify Customer Page:

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