Stripe Smart Retries: How They Work & What They Miss (2026)

What are Stripe Smart Retries?

Stripe Smart Retries is Stripe's built-in system for automatically retrying failed subscription charges. When a payment fails, Stripe doesn't give up immediately — it uses machine learning to determine the optimal times to retry the charge over the next 4–8 days.

Smart Retries are enabled by default for all Stripe accounts using subscription billing. You don't need to configure anything to get them — they run automatically in the background whenever a payment fails on a subscription invoice.

How Stripe Smart Retries work

When a subscription invoice fails to charge, here's what happens:

1. Stripe detects the failure and fires the invoice.payment_failed webhook event.
2. The invoice status changes to open (was draft before charge attempt).
3. Stripe queues the invoice for retry based on its ML model, which considers: time of day, day of week, card issuer behaviour patterns, historical success rates for similar failures.
4. Stripe retries the charge at the optimised times — typically 3–4 attempts over 4–8 days.
5. If any retry succeeds, the invoice moves to paid and Stripe fires invoice.payment_succeeded.
6. If all retries fail, Stripe moves the subscription to past_due and eventually cancelled based on your Smart Retries settings.

What types of failures Smart Retries can recover

Smart Retries work best on failures where the underlying issue is temporary and self-resolving:

• Insufficient funds — Customer may have funds available later in the week or after payday. ML picks optimal retry timing.
• Do_not_honor (generic bank decline) — Often a fraud flag that clears after a few days. Retry at different time can succeed.
• Temporary network issues — Transient processor errors that succeed on immediate retry.
• Bank fraud holds — Some banks temporarily block unusual charges; this often clears within 24–48 hours.

What Smart Retries cannot recover

Here's the fundamental gap: Smart Retries work on the technical side — retrying the charge at better times. They cannot recover failures that require customer action:

• Expired cards — No amount of retrying works on an expired card. The customer must provide a new card number. Smart Retries will fail every time.
• Cancelled cards — Same as expired: the card is invalid, retrying doesn't help.
• Wrong card details — If the card was entered incorrectly, retries fail until the customer corrects it.
• Customer-cancelled subscriptions via bank — If a customer disputed and blocked the charge at their bank, retries will keep failing.

Expired and cancelled cards account for roughly 40–50% of all Stripe subscription failures. Smart Retries cannot recover any of them.

Smart Retries vs. email dunning: what each does

Smart Retries and email dunning are complementary, not alternatives. You should run both simultaneously. Smart Retries handle the technical side; email dunning handles the customer communication side.

The combined recovery rate

Here's what the math looks like for a typical SaaS with 200 subscribers and $50/month average subscription:

• Monthly failed payments: ~12 (6% failure rate is typical)
• Smart Retries alone: Recovers ~2 (15% recovery rate) = $100/month saved
• Smart Retries + email dunning: Recovers ~6–7 (50–55% recovery rate) = $300–350/month saved
• Annual difference: $2,400–3,000/year in revenue that would otherwise be lost

At higher MRR, the numbers compound significantly. At $20k MRR: the same math yields $24,000–30,000/year in recoverable revenue.

How to check if Smart Retries are enabled on your account

1. Go to Stripe Dashboard → Settings → Billing
2. Click Automatic collection
3. You'll see "Smart Retries" — confirm it's toggled on
4. Check the "Retry schedule" — you can customise how many retries over what period
5. Check "When all retries fail" — set this to "Cancel the subscription" (not "Leave as past_due") for cleaner state management

The right setup: Smart Retries + automated email dunning

The optimal setup listens to the same invoice.payment_failed webhook that Smart Retries is triggered by, then:

1. Immediately sends a D+1 email to the customer (within 2 hours)
2. Sends a D+3 reminder if the invoice is still unpaid
3. Sends a D+7 final notice with a specific cancellation date
4. Stops the email sequence when invoice.payment_succeeded fires (whether from Smart Retry or customer card update)

RecoverKit does exactly this — it connects to your Stripe account, listens for payment failure events, and runs the complete D+1/D+3/D+7 email sequence automatically while Smart Retries works in parallel on the technical side.

For more on how to write the actual emails, see our Stripe dunning email templates guide. For the broader recovery strategy, see how to recover failed Stripe payments.